Energy Tax Credits and Incentives
The Inflation Reduction Act (IRA) is a federal law that is the largest investment in domestic energy production and promotion of clean energy in United States history. Passed by the Senate on August 7, 2022 and signed into law on August 16, 2022, this legislation aims to tackle climate change by creating clean energy jobs and striving towards a net-zero economy by 2050. The IRA developed rebate programs and tax incentives for homeowners to invest in energy efficient technologies. The rebate program will be managed by each state's energy office with DOE approval.
Clean Energy Tax Incentive Phaseouts
The OBBBA (One Big Beautiful Bill Act) significantly rolls back many clean energy tax credits. Read more information on the terminated or modified credits.
Terminated or Phased-Out Credits
| Tax Credit Type |
Tax Code Section |
Status under OBBBA |
| Clean Vehicles |
30D, 25E, 45W |
Terminated for vehicles acquired after 9/30/25 |
| Home Energy Efficiency |
25C |
Terminated for property placed in service after 12/31/25 |
| Residential Clean Energy |
25D |
Terminated for expenditures after 12/31/25 |
| Charging/Alt. Fuel Property |
30C |
Terminated after 6/30/26 |
| New Energy Efficient Homes |
45L |
Terminated after 6/30/26 |
| Energy Efficient Commercial Buildings |
179D |
Terminated after 6/30/26 |
What is the Difference Between a Tax Credit and a Rebate?
Tax Credits
A tax credit is a dollar-for-dollar amount taxpayers claim on their tax return to reduce the income tax they owe. If a tax refund is issued, the tax credits can increase the amount in the refund. If taxes are owed, the credits can lower the amount in dollars owed. To claim the benefit of tax credits outlined in the Inflation Reduction Act, taxpayers must file the specific IRS form for which they are claiming credits.
Rebates
A rebate is an upfront discount provided by a retailer or contractor for the purchase of an eligible product or service.
Incentives
Visit DSIRE for the latest state and federal incentives and rebates. This information may change. Use the filter to see the latest Virginia and Federal incentives and rebates that may be applicable to you.
Disclaimer: The above is not advice and is for informational purposes only. Residents are responsible for consulting their own advisor.