Federal Energy Credits Ended: NC Options in 2026

For a few years, a big part of the sales pitch for heat pumps, windows, insulation and solar was the federal tax credit. That's over. If a contractor is still quoting a federal credit for a project you'll complete in 2026, ask them to show you where it applies, because for most homeowner upgrades it doesn't.

What ended

Two federal credits covered most homeowner energy projects:

• Energy Efficient Home Improvement Credit (25C). It covered things like heat pumps, central AC, water heaters, insulation, windows, doors and home energy audits. The IRS says it applied to improvements made through December 31, 2025, for property placed in service from January 1, 2023 through the end of 2025.
• Residential Clean Energy Credit (25D). It covered solar panels, solar water heating, geothermal heat pumps, small wind and battery storage. The IRS says it is not available for any property placed in service after December 31, 2025.

If your project was completed and placed in service in 2025, you may still claim it on your 2025 return. Talk to a tax professional. For anything completed in 2026, plan your budget without these credits.

What's left to check in the Triangle

Programs vary by who supplies your electricity and your household income.

Duke Energy Smart $aver. If Duke supplies your power, its home improvement rebates cover HVAC, heat pump water heaters, insulation, air sealing and pool pumps. The participating contractor submits the rebate application for you, and Duke says payment usually takes four to six weeks. Only Smart $aver participating contractors' work qualifies. Read more in our Smart $aver guide.

Energy Saver North Carolina. Run by the NC Department of Environmental Quality, it helps income-eligible homeowners and renters with efficiency and electrification upgrades such as heat pumps, electrical panels and insulation, and starts with income qualification and a free home assessment. The U.S. Department of Energy issued updated guidance on May 29, 2026 that changed the program, so check current status.

Town electric utilities. Apex, Wake Forest, Clayton and some other towns sell their own electricity. Apex, for example, offers its electric customers a rebate for all-electric heat pumps with load-managed heat strips, which excludes dual-fuel systems and requires five years in the load management program. See Apex HVAC.

Manufacturer and contractor promotions. Seasonal rebates on equipment come and go. Get them in writing.

Rethinking the project math

Without a federal credit, the order of upgrades matters more:

1. Air sealing and attic insulation usually cost the least and are eligible for Duke rebates.
2. Duct sealing often fixes comfort problems before you replace equipment.
3. Heat pump replacement when the old system is near the end of its life, sized properly. See our HVAC guide.
4. Windows last, unless they're failing. They're expensive per unit of energy saved. See our windows guide.
5. Solar, if it still pencils out on electricity savings alone.

Watch for outdated sales pitches

Marketing materials, websites and even some proposals written in 2025 may still mention a "30% federal tax credit." When you see one:

• ask the contractor to confirm in writing whether any federal credit applies to your 2026 installation;
• compare quotes on the price before any incentive, so a big advertised discount doesn't hide a high base price;
• be cautious about financing offers built around a tax refund you won't receive.

Solar and battery companies were especially likely to advertise the credit, because the residential clean energy credit was worth 30% of the system cost. Without it, payback periods are longer, and the comparison between solar and other upgrades changes.

Questions to ask contractors

• Which rebates does this project qualify for, and who files the paperwork?
• Are you a participating contractor for my utility's program?
• What does the quote look like without any rebate?
• Is the rebate amount confirmed for the date I'll finish, or could it change?