Insulation, HVAC, and Home Energy Performance Businesses Urge Lawmakers to Keep Home Improvement Tax Credit

Nearly 1000 contractors, distributors, and manufacturers from the U.S. insulation, heating, ventilation, air conditioning, and home performance industries have joined in strong support for the 25C Energy Efficient Home Improvement Tax Credit. Collectively, these businesses make up the backbone of the energy efficiency industry, a sector that currently employs nearly 2.3 million workers across the United States.

In a letter addressed to the leadership of the Congressional tax-writing committees, businesses operating in all 50 states emphasize the importance of the fuel agnostic 25C tax credit in driving energy efficiency upgrades while reducing  tax burdens. The tax credit plays a pivotal role in helping homeowners reduce utility bills and improve home comfort while supporting a thriving domestic workforce.

“American insulation contractors rely on the 25C tax credit to promote energy efficiency retrofits to homeowners. By showcasing the benefits of lower energy costs and enhanced home comfort, the tax credit often serves as the deciding factor for many homeowners considering investments in air sealing and insulation for drafty houses,” said Michael Kwart, Executive Director of the Insulation Contractors Association of America.

“As an HVAC business owner, I see the 25C tax credit as an important tool for helping homeowners choose energy-efficient heating and cooling systems that best fit their needs—whether they rely on electricity, natural gas, or other fuels. It’s about providing options that save money and improve comfort,” said Hal Smith, Chief Executive Officer of Halco, a home energy services business based in New York State.

The 25C tax credit, a nonrefundable personal tax credit, allows homeowners to claim incentives for qualifying energy efficiency improvements made to their primary residence. Key details of the program include:

• A yearly maximum tax credit of $1,200 for insulation and air sealing.
• Separate annual credit limits of $2,000 for electric or natural gas heat pump water heaters, electric or natural gas heat pumps, and biomass stoves and boilers.

Originally enacted in 2005 and signed into law by President George W. Bush, the 25C tax credit has been instrumental in encouraging energy-efficient home upgrades. The current iteration of the tax credit is authorized through 2032, ensuring a decade of continued benefits for homeowners and the energy efficiency industry alike. To read the letter in support of the 25C tax credit, visit: https://insulationinstitute.org/wp-content/uploads/2025/01/01-27-25-Industry-25C-Support-Letter.pdf

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The Building Performance Association (BPA) is a 501(c)(6) nonprofit industry association that serves as the hub for businesses, nonprofits, and government agencies working to make America’s homes more comfortable, healthy, and energy efficient. BPA supports policies that advance the expansion of home and building performance, energy efficiency businesses, and industries.