By Jeffrey A. Redband, Staff Accountant
The One Big Beautiful Bill (OBBB) brought sweeping changes to the U.S. tax code, which included a significant overhaul to the energy-related tax incentives that were enacted as part of the Inflation Reduction Act of 2022. The bill curbs many energy incentives available to both individuals and businesses by accelerating expiration dates. Below are some of the affected energy incentive changes:
Energy-Efficient Home Improvement & Residential Energy Property Credits
Both energy efficient home improvement and residential energy property credits for qualifying property have been terminated after December 31, 2025. However, for the remainder of 2025 taxpayers may be eligible for credits on certain improvements to their primary residence that meet Energy Star or high efficiency code requirements including exterior doors; exterior windows and skylights; insulation or air sealing material or systems; home energy audits; central air conditioners; natural gas, propane, or oil water heaters, furnaces and hot water boilers; electric or natural gas heat pumps and water heaters; biomass stoves and boilers; and certain electric panelboards, circuits and feeders.
Residential Clean Energy Credits
The residential clean energy credit is equal to 30 percent of expenditures on qualifying clean energy equipment, which includes solar electric and solar water heating property; fuel cell property; small wind energy property; geothermal heat pump property; and battery storage technology. This credit has also been terminated after December 31, 2025.
New Energy-Efficient Home Credit
The new energy-efficient home credit is available for qualified energy-efficient newly constructed homes that are Energy Star certified or meet the Zero Energy Ready Home standard. These credits have been terminated with an effective date of June 30, 2026.
Energy-Efficient Commercial Buildings Deduction
The energy efficient commercial buildings deduction will be terminated for property with construction beginning after June 30, 2026. Taxpayers are eligible for a deduction for an amount equal to the cost of energy-efficient commercial building property placed in service before that date with some limitations based on square footage and other specified criteria.
Clean Vehicle Credit & Qualified Commercial Clean Vehicle Credit
The clean vehicle and qualified commercial clean vehicle credits have been terminated for vehicles acquired after September 30, 2025. The credit amounts vary and are subject to a host of requirements and limitations.
Previously Owned Clean Vehicle Credit
The previously owned clean vehicle credit has also been terminated for vehicles acquired after September 30, 2025. This allowed for a credit of the lesser of $4,000 or 30 percent of the vehicle sale price with strict limitations on vehicle model year, sale price, dealer transfer rules, and the vehicle had to be purchased for personal use and not for resale.
Alternative Fuel Vehicle Refueling Credit
The alternative fuel vehicle refueling credit is available for the installation of qualified refueling or recharging property such as EV chargers in qualified locations and is now terminated for property acquired after June 30, 2026.