The clock is ticking for Oregonians to take advantage of stacked savings on home energy upgrades. Federal tax credits created through the Inflation Reduction Act (IRA) are going away at the end of 2025 – but projects in these last couple months, as well as any done earlier in 2025 are eligible to be claimed when doing your taxes in early 2026. 

These tax credits available for homeowners who invest in energy-efficient improvements, are many of the same upgrades that Energy Trust of Oregon offers cash incentives for. This means through the rest of the year, homeowners can combine both offers for the most savings on home improvements.  

Upgrades that qualify for tax credits through the rest of this year include: 

• Insulation: Adding or updating insulation on your attic, walls, and floors can keep your heated or cooled air inside, meaning your system doesn’t have to work as hard. 
• High-efficiency windows and doors: Replacing older windows and doors with efficient ones can keep your home more comfortable, while keeping the air in and preventing drafts. 
• Heating and cooling: Heating and cooling your home is likely one of your biggest home energy expenses, so upgrading to modern, efficient units like heat pumps are a great way to keep energy costs low. 
• Water heating: Switching from a traditional water heater to a more efficient heat pump water heater uses much less energy to heat your water (often the second largest energy expense after heating and cooling). 
• Home energy audit: Credits can cover the cost of a professional energy “check-up” for your home, where an energy auditor can use tools to monitor for temperature and moisture and advise on best upgrades to make, as well as where your home is using energy efficiently and where energy may be wasted. 
• Solar and storage systems: Installing solar panels can help you generate and use your own renewable energy at home, while adding battery storage can allow energy to be served and used during power outages to keep critical needs powered up. Time is tight to complete bigger projects like these before the end of the year, but you can still get credit for projects done earlier in the year. 

How to claim federal tax credits and understand savings caps
There is a cap on federal home energy tax credits of $1,200, with some sub-caps on individual items, applying toward upgrades like insulation, windows, and home energy audits. 

These do not apply to a separate $2,000 tax credit cap for a heat pump or heat pump water heater. This means that if you upgraded to a heat pump and made other upgrades like insulation in 2025, you could receive up to $3,200 in federal tax credits, in addition to any incentives through Energy Trust of Oregon. 

When filing your 2025 tax return, you will need any receipts and manufacturer’s certification statements when claiming these credits. 

1. Fill out Form 5695:?This is the tax form?used to claim credits and is available through the?IRS website?or tax preparation software.? 
2. Fill in the details: Enter the costs of the energy-efficient improvements in the corresponding sections.? 
3. Attach to your tax return: Once completed, attach Form 5695.? 
4. Consult a professional: Consider consulting a tax professional to help maximize your benefit.? 

For more information about federal tax credits, Energy Trust incentives, and where to start saving energy and money at home, visit Energy Trust’s website. 

Energy Trust does not give tax advice. Consult your tax professional for current information on credits available and how to apply.