IRA Residential Clean Energy Credit (25D)

IRS / Inflation Reduction Act

Closed Energy Assistance

About This Program

Note: Congress ended this federal tax credit for installations after December 31, 2025. Projects placed in service by that date can still be claimed on your 2025 federal return (IRS Form 5695).

The IRA's Residential Clean Energy Credit provides a 30% federal tax credit with no cap for qualifying solar panels, geothermal heat pumps, battery storage systems, and solar water heaters installed in a primary residence. The credit is nonrefundable but can be carried forward. Alabama homeowners can combine this credit with Alabama Power rebates for maximum savings.

30% of total project cost; no dollar cap; can combine with utility rebates.

Verified against IRS / Inflation Reduction Act's official page on 2026-06-17.

Data last verified 2026-04-03. How we verify our data.

In Birmingham, AL, you can combine this program with other local help to cut your cost:

Key Details

  • 30% tax credit on solar panels, geothermal, and battery storage
  • No annual dollar cap (unlike the 25C improvement credit)
  • Must have federal tax liability; nonrefundable but carryforward allowed
  • Can be combined with Alabama Power rebates
  • Active for installations completed by December 31, 2025; claim on IRS Form 5695

How to Apply

Get free help applying Visit Official Program Page Track this program

800-829-1040

A grant-savvy contractor in Birmingham, AL can handle the paperwork, inspections, and timelines so your funding releases on schedule. Getting matched is free.

You will likely need a contractor to apply

Projects like this almost always need a licensed contractor, and many grants ask for a written estimate as part of your application. Lining up a contractor in Birmingham early keeps your application moving.

Get matched with a contractor

Each program sets its own contractor rules. Check the official program page for exact requirements.

Your application paperwork

Form to file: IRS Form 5695

This is a federal tax credit, not a grant you apply for. You claim 30 percent of the cost of a qualifying solar or clean energy system on your federal tax return using Form 5695.

Steps to apply

  1. Have your solar or clean energy system installed and pay for it.
  2. Keep the itemized invoice and proof of payment.
  3. Complete IRS Form 5695 and file it with your Form 1040 for the year the system was placed in service.
  4. If the credit is larger than your tax bill, carry the unused amount forward to next year.
Get the official formDownload the fillable PDF

Documents you will likely need

  • Itemized invoice from your installer showing the system cost.
  • Proof of payment.
  • Manufacturer certification statement for the equipment.
  • Your federal tax return (Form 1040) for the year of installation.
Download this checklist (PDF)

Requirements vary by program and locality. Confirm the exact rules on the official program page. We can help you prepare your paperwork, but you submit it yourself.

Deadline: Ended December 31, 2025 (federal law change)

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