Time Is Running Out for Solar and Heat Pump Tax Credits

As the global push for clean energy continues to gain momentum, political ideology on clean energy incentives are going in the opposite directions. For the past few years, property owners in Cook County have been benefiting from U.S. federal tax credits to make the switch to renewable energy and high-efficiency systems, saving homeowners thousands of dollars annually. But now, time is running out for solar and heat pump tax credits! If you’ve been thinking about installing solar panels or upgrading to a heat pump, now is the time to act.

Why the Rush? The Clock Is Ticking...

The current federal tax credits became available under the Inflation Reduction Act (IRA). These include the 30% credit for solar energy systems and up to $2,000 for heat pumps. They are among the most generous incentives ever offered in the U.S. for residential energy upgrades. However, these credits are going away thanks to changes being made by the current administration. 

Even more urgently: To claim the 2025 tax credits, your system must be installed AND operational by December 31, 2025. Simply signing a contract or scheduling an install is not enough. The solar installation process could take several months to complete, so as we move further into 2025 the window of time to take advantage of the current tax credits is closing quickly.

Savings Gone: What You Could Lose by Waiting

• Solar Installations: A 30% tax credit could mean $6,000 back on a $20,000 system.

• Heat Pumps: Upgrading to an electric heat pump now can bring a $2,000 federal credit. 

• Personal Savings: The lifetime savings of solar at a residential property can range from $30,000 to upwards of $90,000 depending on the size of the system and your current usage. For many, the 30% tax credit is the only way to make a solar installation affordable. No solar, no savings overtime. Furthermore, upgrading your home heating system to an electric heat pump could save as much as 50% on your electric bill. A significant savings for those living in a cold climate like Northern Minnesota.

Act Now: What You Need to Do

1. Get Quotes and Schedule Site Visits This Summer: Installers are already seeing a surge in demand as the deadline approaches. If you do not act soon, you may miss out simply because the limited number of solar installers in the area will not be able to keep up with demand.

2. Confirm Timelines: Make sure your contractor can deliver, install, and activate your system before December 31, 2025. Again, this can take several months from the initial site visitation to the system being activated. Do not wait any longer!

3. Don’t Forget to File for Tax Credits Promptly: You’ll claim the credit when filing your 2025 federal taxes in 2026. 

Don’t Wait for 2026: It Will Be Too Late

Energy independence, long-term personal savings, and environmental friendliness and sustainability are all good reasons to install solar or upgrade your heating system. Financially, this could a now-or-never moment. Or, rather, a now-and-maybe-wait-another-three-years-and-wish-for-the-best moment. It’s best to play it safe. If you’ve already been considering installing solar, acting in 2025 may be your last chance to claim thousands in savings.

Get started today and beat the year-end rush!