If you are mulling installing solar panels on your roof or making other energy-efficient improvements to your home, you may want to act quickly to take advantage of one of two federal income tax credits. First, is the residential clean energy property credit for homeowners who install a power system that uses solar or other renewable energy. Second, is the energy-efficient home improvement credit for homeowners who make smaller energy-saving purchases for their homes.
How long these two credits — which reduce the taxes you owe dollar for dollar — will remain on the books, and what, if any, changes will be made, are currently open questions. On May 22, the House passed its One Big Beautiful Bill that would extend the tax changes in the 2017 Tax Cuts and Jobs Act that automatically expire at the end of 2025. The bill also provides lots of other tax breaks.
