What Tax Credits Are Available for Upgrading Home Insulation?

Starting January 1, 2023, new federal tax credits became available, and they’ll be in place for 10 years—through December 31, 2032. Known officially as the Energy Efficiency Home Improvement Credit (often referred to as the 25C Tax Credit), this incentive allows homeowners to claim up to 30% of the project cost for qualified home efficiency upgrades.

The previous lifetime cap of $500 has been replaced by a generous annual cap:

• Up to $1,200 per year for insulation, air sealing, windows, doors, electric panel upgrades, and home energy audits.

• Up to $2,000 per year for qualifying heat pumps, heat pump water heaters, and biomass stoves/boilers.

This means homeowners can receive up to $3,200 annually in total federal tax credits, significantly reducing the cost of making energy-saving improvements over multiple years.

Qualifying products and upgrades include:

• Insulation

• Heat Pumps

• Heat Pump Water Heaters

• Biomass Stove/Boilers

• Windows/Skylights

• Exterior Doors

• Central Air Conditioners

• Natural Gas, Oil, or Propane Water Heaters

• Natural Gas, Oil, or Propane Furnaces/Boilers

• Electric Panel Upgrades

• Home Energy Audits

You can apply for these credits on your federal taxes by completing IRS Form 5695: Residential Energy Credits.

Unlock 2025 Savings with the Updated Insulation Tax Credit

The 2025 insulation tax credit is one of the most valuable incentives available to Oklahoma homeowners looking to enhance energy efficiency and reduce utility bills. By taking advantage of the 25C tax credit insulation incentive, you can significantly lower your upfront investment while boosting your home’s comfort and value.

Whether you’re considering spray foam insulation, blown-in cellulose insulation, or traditional rolled and batt insulation, 1907 Insulation ensures your project meets all necessary efficiency standards. Our team can help gather and prepare the documentation required to maximize your savings at tax time.

Local Utility Rebates for Oklahoma Homes

In addition to the federal 25C tax credit, you might qualify for local energy incentives from Oklahoma Gas and Electric (OG&E). OG&E provides energy efficiency rebates of up to $500 when upgrading attic insulation to an R-value of 38 or higher:

These rebates are available annually, but only while funding lasts—so don’t delay in scheduling your insulation upgrade.

FAQs About the 2025 Insulation Tax Credit

Who qualifies for the 25C tax credit?
Homeowners living in the residence where upgrades are installed qualify. Rental properties and new construction homes do not qualify.

What types of insulation are eligible?
Eligible products include spray foam, blown-in cellulose, batt insulation, and air sealing materials such as caulking and weatherstripping—provided they meet ENERGY STAR standards. Most of Oklahoma (Climate Zone 3) recommends an R-value of 38 or higher in attics.

Should I consult a tax professional?
We strongly recommend it. You’ll need IRS Form 5695 and detailed receipts, which we’ll help organize for you.

Let 1907 Insulation Help You Save

1907 Insulation makes taking advantage of the 2025 insulation tax credit and local utility rebates easy. We handle everything from installing high-quality insulation to providing organized documentation that simplifies your tax filing process.

Ready to enhance your home comfort and lower your energy bills?

👉 Schedule your free consultation online or call us at (405) 300-8745 today!

 

Starting January 1, 2023, new federal tax credits will be in place for 10 years – through 2032. Also, while the tax credit amount is mostly limited to 30% of the project cost, the previous lifetime cap of $500 has been changed to an annual cap of either $1,200 to $2,000 depending on the efficiency improvements you make. This means you will be able to claim credit for more projects, especially if they are spread out over multiple years. The Energy Efficiency Home Improvement credits will be for products such as:

• Insulation
• Water Heaters
• Heat Pumps
• Biomass Stove/Boilers
• Windows/Skylights
• Exterior Doors
• Central Air Conditioners
• Natural Gas, Oil, Propane Water Heaters
• Natural Gas, Oil, Propane Furnaces/Boilers
• Electric Panel Upgrades
• Home Energy Audits

Here’s the worksheet you’ll need to apply the tax credits when you file your tax return: IRS Form 5695: Residential Energy Credits. If you have questions, contact your tax preparer or the Internal Revenue Service (IRS) for more information.