You can still claim a federal tax credit for an electric panel upgrade only if the panel was placed in service on or before December 31, 2025, and only if it was installed alongside another qualifying energy improvement. The One Big Beautiful Bill, signed July 4, 2025, ended the Energy Efficient Home Improvement Credit under Internal Revenue Code Section 25C for any property placed in service after that date.1Internal Revenue Service. FAQs for Modification of Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D Under the One Big Beautiful Bill A panel finished in 2026 or later does not qualify, no matter when you signed the contract or paid a deposit. If yours was done in time, the credit is worth 30% of qualifying costs, capped at $600, claimed on IRS Form 5695 with your 2025 return.
What Had to Be True for the Panel to Qualify
A panel upgrade on its own never qualified. Several conditions had to line up, and this is where most homeowners who assumed they were covered got tripped up.
It Had to Enable Another Qualifying Improvement
The statute required the panel work to be done “in conjunction with” either a qualified energy efficiency improvement (such as insulation or new windows) or a qualified piece of energy equipment (such as a heat pump or central air conditioner), and the panel also had to “enable the installation and use” of that other improvement.2ENERGY STAR. Electric Panel Upgrade Tax Credit3Office of the Law Revision Counsel. 26 USC 25C – Energy Efficient Home Improvement Credit
Modernizing an old box, feeding a new workshop, or adding capacity for an EV charger did not count. The triggering improvement had to be something independently eligible under Section 25C.
At Least 200 Amps
The new panel had to have a load capacity of at least 200 amps.3Office of the Law Revision Counsel. 26 USC 25C – Energy Efficient Home Improvement Credit Replacing a 100-amp panel with a 150-amp panel did not qualify, even if everything else about the project did.
National Electric Code Compliance
The installation had to be consistent with the National Electric Code.3Office of the Law Revision Counsel. 26 USC 25C – Energy Efficient Home Improvement Credit A licensed electrician pulling permits meets this as a matter of course. Unpermitted work creates problems on both compliance and documentation.
Which Homes Counted
Panels got a broader residence rule than most Section 25C improvements. The upgrade could be installed in any home you used as a residence in the United States, including a second home, and renters who paid for their own panel work were eligible too.4Internal Revenue Service. Energy Efficient Home Improvement Credit – Qualifying Residence Condominiums, co-ops, mobile homes, and houseboats all counted.2ENERGY STAR. Electric Panel Upgrade Tax Credit Rentals you own but do not live in did not.
How Much the Credit Is Worth
The credit equals 30% of qualifying expenses, but two caps bite well before most homeowners reach the full 30%.
The per-item ceiling is $600. No single piece of qualified energy property can generate more than $600 in credit.5Office of the Law Revision Counsel. 26 U.S. Code 25C – Energy Efficient Home Improvement Credit A $4,500 panel generates a mathematical 30% of $1,350, but you receive $600. A $10,000 panel also yields $600.
That $600 also counts against a broader $1,200 annual limit covering the whole bucket of energy-efficient property (central air, furnaces, water heaters, insulation, windows, doors, and panels).6Internal Revenue Service. Energy Efficient Home Improvement Credit A separate $2,000 annual bucket exists for heat pumps, heat pump water heaters, and biomass stoves or boilers, so a homeowner who did both kinds of work in the same year could claim up to $3,200 across the two categories.
The credit is nonrefundable, and there is no carryforward. It can reduce your federal tax bill to zero but cannot generate a refund. If you owe $400 in federal income tax and qualify for a $600 credit, you receive $400 of benefit and lose the remaining $200 permanently.7Internal Revenue Service. Energy Efficient Home Improvement Credit – Timing of Credits
Which Costs Count
Eligible expenses include the new panel itself, sub-panels, branch circuits, feeders, and all associated wiring connecting the new energy equipment to the home’s electrical system. Installation labor counts.6Internal Revenue Service. Energy Efficient Home Improvement Credit Permit and inspection fees tied to the panel work are generally includable, though with a $600 ceiling the distinction rarely moves the number.
How to Claim It on Your 2025 Return
Use IRS Form 5695, Residential Energy Credits.8Internal Revenue Service. Instructions for Form 5695 (2025) Part II handles the Energy Efficient Home Improvement Credit. Calculate 30% of your qualifying expenses, apply the $600 per-item cap and the $1,200 overall limit, and carry the resulting credit to your Form 1040.
Keep the following in case the IRS asks:
- An itemized invoice from the contractor breaking out the panel, wiring, and labor separately from any unrelated work.
- Proof of payment: receipts, canceled checks, or credit card statements showing what you paid and when.
- Documentation of the placed-in-service date, meaning when the panel was completed and operational, not when you signed the contract.
- A Manufacturer Certification Statement for the primary piece of energy equipment that triggered eligibility.
If the Panel Was Tied to Solar, Check Section 25D Instead
A panel upgrade installed to support a solar array, battery storage, a wind turbine, or a geothermal heat pump may fall under the Residential Clean Energy Credit in Section 25D rather than 25C. Qualified costs under that credit include “labor costs for onsite preparation, assembly or original installation of the property and for piping or wiring to connect it to the home.”9Internal Revenue Service. Residential Clean Energy Credit
The 25D credit is also 30%, but it carries no per-item dollar cap. If an electrician upgraded your panel specifically to support new solar or storage, the panel and wiring may yield a better result under 25D than under 25C’s $600 ceiling. The One Big Beautiful Bill ended 25D on the same timeline: the IRS has indicated the Residential Clean Energy Credit is unavailable for property placed in service after December 31, 2025.9Internal Revenue Service. Residential Clean Energy Credit Pull your records and compare before you file.
What’s Available for Panel Upgrades Done in 2026 or Later
No federal income tax credit currently covers a panel upgrade placed in service after December 31, 2025. The remaining federal incentive is the High-Efficiency Electric Home Rebate Act (HEEHRA), a point-of-sale rebate program that is federally funded but administered by each state’s energy office. HEEHRA rebates are not tax credits; they reduce the purchase price directly or reimburse you, so they help even if you owe no federal tax. Income eligibility is tied to your household income relative to the area median, with larger rebates for lower-income households. Availability, application processes, and timing differ by state, and some state programs have not launched or are backed up with demand. Your state energy office is the place to check.