The Expiration of Tax Credit 25C: What Homeowners Need to Know

Federal tax incentives have played a significant role in making energy-efficient home improvements more attainable. One of the most widely used—Section 25C Energy Efficient Home Improvement Tax Credit—is ending for projects installed after December 31, 2025. If you’re considering a new HVAC system, updated insulation, or more efficient windows, it’s important to understand how this change could affect your plans and what alternative tax credits might still be available for Richmond homeowners.

What Is the 25C Energy Efficient Home Improvement Tax Credit?

Section 25C is a federal tax benefit that has helped homeowners afford a range of energy-saving upgrades.

With this credit, you could claim a percentage of the cost for qualifying projects, such as:

Installing new HVAC systems (efficient furnaces, central air conditioners, heat pumps)
Upgrading insulation, exterior windows, skylights, and doors
Adding high-efficiency water heaters or advanced circuit breaker panels

This incentive has made energy-saving projects more affordable and helped many families lower their utility bills.

Section 25C Is Ending: What’s Changing?

Legislation passed under the One Big Beautiful Bill Act (OBBBA) moves up the sunset date for several federal energy tax credits, including Section 25C.

This means:

Section 25C ends for home improvements placed in service after December 31, 2025.
Projects completed after this date, even if work began or deposits were made earlier, will not qualify for the tax credit.

What Does This Mean for Richmond Homeowners?

The expiration of Section 25C has major implications for anyone planning home upgrades:

Last chance for savings – Qualifying improvements must be installed and operational by the end of 2025 to get the federal tax benefit.
No credit for 2026 installations – Projects wrapped up after the deadline miss out, no matter when you started or paid.
Potential impact on home upgrades – Without this incentive, some homeowners may pause or scale back on energy-saving improvements, impacting long-term comfort and cost savings.
Check for other rebates – State and utility rebates may still be available, so research local programs if you’re planning upgrades.

State Rebates and Incentives That Remain Available

Although Section 25C is expiring, several other federal tax benefits continue for homeowners—some without an immediate sunset date.

Even as federal incentives shift, Richmond, VA, homeowners continue to have access to strong local and state rebates that support energy-efficient home upgrades. Many of these rebates offer benefits similar to (or, in some cases, even more substantial than) the Section 25C tax credit.

Virginia Home Energy Rebates (Launching Late 2025)

Through the Home Efficiency Rebate Program, qualifying Richmond households can receive up to $8,000 for retrofit projects that achieve at least 15% energy savings.

Additionally, the High Efficiency and Appliance Rebate Program will soon provide up to $14,000 per household for high-efficiency electric appliances, including up to:

$1,750 for ENERGY STAR® heat pump water heaters
$8,000 for ENERGY STAR® heat pumps for space heating and cooling
$840 for ENERGY STAR® electric stoves, cooktops, or ovens
$840 for ENERGY STAR® heat pump clothes dryers
$4,000 for electrical load service center upgrades
$1,600 for insulation, air sealing, and ventilation
$2,500 for electric wiring upgrades

Eligibility and rebate amounts may vary depending on your household income and project type, so it’s a good idea to consult the Virginia Energy Sense website or the Virginia Department of Energy for the latest updates.

Utility Rebates in Richmond

Dominion Energy and other local utilities provide additional rebates for installing energy-efficient appliances and systems, such as:

High-efficiency heat pumps and mini splits (rebates typically range from $50 to as high as $1,625, depending on efficiency and system size)
Rebates and discounts for ENERGY STAR® certified appliances
Other incentives for insulation, weatherization, and energy-saving measures

For current offers, instructions, and eligibility criteria, check Dominion Energy’s Efficiency Programs page and the TakeCharge VA portal.

DOE Energy Rebates

Alongside Virginia-specific programs, homeowners may also apply for federal DOE home energy rebates.

These can cover:

80% of project costs (up to $4,000) for home energy retrofit projects with at least 20% predicted energy savings
Up to $8,000 for projects yielding 35% or greater predicted savings
Reduced rebates (up to 50% of costs) for those above the area’s median income

How to Make the Most of Local Incentives

Because programs can change and may have limited windows for application, Richmond homeowners should:

Review Virginia Energy Sense and Dominion Energy’s online resources for updated rebate lists and application steps
Keep receipts and detailed documentation for any qualifying home improvements made
Consult with a licensed professional to ensure projects qualify for maximum available incentives

With these local and state programs in place—some of which offer direct rebates instead of tax credits—Richmond area homeowners can continue to invest in comfort, lower energy bills, and boost home value, even as federal tax credits like Section 25C expire.

Blazer Heating, Air, and Plumbing: Local Experts for Richmond Home Upgrades

Blazer Heating, Air, and Plumbing works with homeowners across Richmond, VA, and nearby communities to help maximize available tax credits and incentives. Whether you’re looking to upgrade before Section 25C expires or interested in clean energy solutions that will continue beyond 2025, their knowledgeable team can guide you through your options.

Contact Blazer Heating, Air, and Plumbing for personalized help with energy-efficient HVAC, insulation, or other improvements. We stand ready for clients throughout the Richmond area.