Section 13302 of the IRA modifies the Residential Energy Efficient Property Credit established in section 25D of the IRC. The credit has been renamed the Residential Clean Energy Credit. The qualification requirements for, and amount of, the credit have also been changed.
Prior to enactment of the IRA, the credit was available to individual taxpayers who installed qualifying systems that use solar, wind, geothermal, biomass, or fuel cell technology to produce electricity or heat or regulate home temperatures. Section 13302 of the IRA adds battery storage technology to the list of qualifying systems and removes biomass furnace and water heating systems.
The tax credit is available to property placed in service before January 1, 2035. Prior to enactment of the IRA, the credit was set at 26% of the cost of the installed system. As a result of the amendments made via the IRA, the amount of the credit is increased to 30% from 2022 through 2032 and then falls to 26% in 2033 and 22% in 2034.
Eligible Entities:
Current Status:
Section 70506 of the One Big Beautiful Act of 2025 (Public Law 119-21) terminates the section 25D residential clean energy credit (IRA section 13302) by replacing the “placed in service after December 31, 2034” requirement with “with respect to any expenditures made after December 31, 2025.”
Trump Administration Actions:
- Congress Passes Budget Bill, Rescinding Funds and Repealing IRA Programs and Tax Credits [07/03/2025]
- Senate Parliamentarian Advises Several Provisions in Republicans’ “One Big, Beautiful Bill” Are Not Permissible, Subject to Byrd Rule [06/19/2025]
- Senate Finance Committee Releases Budget Reconciliation Draft Text [06/16/2025]
- OMB Orders Temporary Pause on Financial Assistance Programs, Later Rescinded [01/27/2025]
- OMB Clarifies Scope of the Order to Halt IRA Spending [01/21/2025]
- Trump Issues Executive Order to Halt All IRA Funding Disbursements [01/20/2025]
Implementation Status at End of Biden Administration:
The Biden administration issued guidance and launched an Energy Savings Hub to implement the section 25D Residential Clean Energy tax credit. Treasury analysis showed that taxpayers claimed over $6 billion in Residential Clean Energy credits from May 2023-2024.
Biden Administration Actions:
Program Stakes:
Congress’s Joint Committee on Taxation estimates taxpayers to claim $59 billion in credits by 2028.