Texas Home Energy Tax Credits in 2026: What Ended and What's Left

By the TexasPowerCost Editorial Team — independent Texas electricity analysis · Last reviewed October 18, 2026 · how we analyze plans

Last updated: October 18, 2026  ·  6 min read

If you've been planning a heat pump, new windows, or rooftop solar partly for the tax credit, there's an important update: the main federal home energy tax credits ended at the close of 2025. Plenty of websites haven't caught up. Here's the accurate 2026 picture for Texas homeowners — and what still helps.

What Ended

These two credits were the backbone of federal home-energy incentives, and both were cut short. They had been scheduled to run through 2032, but the One Big Beautiful Bill Act (signed in July 2025) moved their expiration to December 31, 2025.

• Section 25C — Energy Efficient Home Improvement Credit: covered up to 30% of the cost of qualifying heat pumps, central AC, water heaters, furnaces, insulation, exterior doors and windows, and home energy audits, with annual caps. Gone for property placed in service after 2025.
• Section 25D — Residential Clean Energy Credit: the 30% credit for rooftop solar, battery storage, solar water heating, and geothermal. Gone for systems installed after 2025.

If your project was purchased, installed, and operational by December 31, 2025, you may still be able to claim it on your 2025 tax return — confirm with a tax professional.

What's Still Available in Texas

The credits ending doesn't mean there's no help. Several paths still lower the cost of an efficient home — and your monthly bill — in 2026:

• Utility and co-op rebates. Many Texas utilities and electric cooperatives offer their own rebates on smart thermostats, AC tune-ups, attic insulation, and heat pumps. These are separate from federal tax law and vary by provider — check your utility's website.
• Weatherization Assistance Program (WAP). Federally funded and run through local community action agencies, WAP can add insulation and seal air leaks at no cost for income-eligible households. Call 2-1-1 to find your agency.
• CEAP bill assistance. Help paying the electricity bill itself for eligible households, with priority for seniors and people with disabilities — see our guide to assistance for Texas seniors.
• Texas solar/wind property-tax exemption. Texas has no income tax, but it does exempt the added home value from a solar or wind device from your property taxes. Check with your local appraisal district.

The Lever That Needs No Paperwork

Tax credits come and go, but the biggest year-round saving for most Texans isn't an upgrade at all — it's being on the right electricity plan. Switching to the genuinely cheapest plan at your real usage takes minutes, costs nothing, and lowers every kilowatt-hour you buy. It's the one move that's always available, credit or no credit.

This guide is general information, not tax advice. Tax law changes and individual situations differ — confirm current rules and your eligibility with the IRS or a qualified tax professional before relying on them.

Common Questions

What appliances qualify for energy tax credits in 2026?

For improvements placed in service after December 31, 2025, the main federal home energy tax credits no longer apply. The Energy Efficient Home Improvement Credit (Section 25C) — which covered efficient heat pumps, HVAC, water heaters, insulation, windows and doors — and the Residential Clean Energy Credit (Section 25D) for solar and batteries both ended at the close of 2025 under the 2025 budget law. Equipment installed and operational by December 31, 2025 may still qualify on your 2025 return.

Can you write off new appliances on taxes in Texas?

Generally no, not for a personal residence. The federal energy-efficiency credits that let homeowners claim qualifying HVAC, water heaters and similar equipment ended after 2025, and ordinary appliances like refrigerators or washers were never deductible for personal use. Texas has no state income tax, so there is no state-level appliance write-off either. Business or rental-property equipment is a separate matter — ask a tax professional.

Did the energy tax credits really end?

Yes. The One Big Beautiful Bill Act, signed July 2025, moved the expiration of the Section 25C and 25D residential energy credits to December 31, 2025 (they had previously been scheduled to run through 2032). A lot of older online guides still describe them as available — that information is out of date for anything installed in 2026 or later. Always confirm current rules with the IRS or a tax professional.

What help is still available to lower my energy costs in Texas?

Even without the federal credits, several things still help: utility and electric-cooperative efficiency rebates (many TDUs and co-ops offer rebates on smart thermostats, AC tune-ups, insulation and heat pumps), the federally funded Weatherization Assistance Program for income-eligible households, and bill assistance through CEAP. And the lever that needs no paperwork at all — switching to the cheapest electricity plan at your real usage.

Does Texas have its own energy tax credit?

No. Because Texas has no state personal income tax, there is no state income-tax credit for home energy upgrades. What Texas does offer is a property-tax exemption for the added home value from solar and wind devices, plus utility-level rebate programs that vary by provider. Check your utility's website and your appraisal district for current specifics.

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