FEDERAL RESIDENTIAL CLEAN ENERGY CREDIT (25D)
* EXPIRED *
Federal 25D battery storage tax credit
The deadline to make a credit-eligible upgrade has passed. If you purchased, installed and put to use a qualifying home battery storage system by December 31, 2025, read on for how to apply this credit when you file your taxes in 2026.
View other eligible projects under this tax credit:
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Introduction
Introduction
Disclaimer: The information presented here is for educational purposes only. It is not intended to provide specific tax guidance. For questions regarding your individual tax situation, we suggest consulting with your tax advisor.
Tax Credit
30%
Expired Dec. 31, 2025
Which battery storage options qualify?
Battery storage must have a capacity of 3 kilowatt-hours or greater. Labor costs associated with installation are also eligible for this tax credit.
In order to qualify for this tax credit, battery storage technology property must:
Be new and previously unused
Have a capacity of 3 kilowatt-hours or greater
Be installed and put to use in your home by Dec. 31, 2025.
Additionally, you can include labor costs associated with onsite preparation, assembly, or installation of your battery storage. Purchase and installation of piping and wiring required to connect new battery storage with your home may also qualify for this tax credit.
If you aren’t sure if your battery storage options qualify, talk to your contractor. They’ll clarify if your technology and associated equipment are eligible for the 25D tax credit.
Who qualifies for the 25D battery storage tax credit?
This tax credit applies to everyone who pays federal income taxes.
No income requirements
There are no income limitations for the 25D Tax Credit. However, like nearly all federal tax credits, you must pay federal income taxes to qualify.
All US residents who live in their homes
The 25D tax credit can be applied to a new or existing home that is located in the United States. This means that, unlike 25C tax credits, a home that is under construction when you apply for the battery storage tax credit can qualify.
Renters are also eligible.
Additionally, you must live in the property at least part of the year. Landlords can never claim this credit for homes they rent out but do not use as a residence themselves.
What is the 25D battery storage tax credit?
The federal government offers an uncapped tax credit to cover 30% of eligible costs of purchasing and installing a battery storage system for all households who pay federal income tax.
This incentive is available through the 25D Residential Clean Energy Property Credit, a US government program that covers 30% of the cost of eligible battery systems.
The 25D tax credit doesn’t just apply to home battery storage technology. It can also cover several other residential clean energy property upgrades, including solar panels and geothermal heating and cooling.
Here’s a complete list of residential projects that can qualify for the 25D tax credit:
| Project Type | How much funding can you receive from 25D for qualifying projects? |
|---|---|
| Project Type:Solar panels | How much funding can you receive from 25D for qualifying projects?:30% of qualified expenditures made for property installed by Dec. 31, 2025. |
| Project Type:Solar water heaters | How much funding can you receive from 25D for qualifying projects?: 30% of qualified expenditures made for property installed by Dec. 31, 2025.
|
| Project Type:Geothermal heat pumps | How much funding can you receive from 25D for qualifying projects?: 30% of qualified expenditures made for property installed by Dec. 31, 2025.
|
| Project Type:Battery storage technology | How much funding can you receive from 25D for qualifying projects?: 30% of qualified expenditures made for property installed by Dec. 31, 2025.
|
Source: Internal Revenue Service
Tax credit limitations
The 25D battery storage tax credit can cover 30% of your battery project’s cost. There’s no cap, or maximum dollar amount, for projects that qualify under this tax credit, as long as the project is completed by the end of the year.
Generally, you must subtract any price adjustments from the cost of the item. This can mean rebates, utility subsidies, financial incentives, and anything else that lowers the price point. This part can get a little tricky, so be sure to check the Frequently asked questions about energy efficient home improvements and residential clean energy property credits for more information.
The 25D tax credit is “non-refundable,” which means that you can't get back more than you pay in federal income taxes.
If 30% of your project’s cost is $3,000, but you only owe $1,000 in federal income taxes that year, you would receive a $1,000 credit.
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