Federal tax credits have historically helped homeowners offset the cost of energy-efficient home improvements, including HVAC systems, heat pumps, insulation, windows, and solar. However, several major federal energy tax credits changed after 2025, making it important to understand which incentives still apply in 2026 and 2027. Below, we'll discuss which state and district tax credits still apply to homeowners in DC, MD, and VA.
Table of Contents
Federal Tax Credits for Energy-Efficient Home Improvements
Energy-Efficiency Incentives in Maryland, Virginia, and Washington, DC
Solar, Heat Pumps, and High-Performance Home Improvements
Incentives for New Energy-Efficient and Passive Homes
Planning Around Energy-Efficiency Rebates and Incentives
Build Energy Efficiency Into Your Home From the Beginning
Federal Tax Credits for Energy-Efficient Home Improvements
In 2026 and 2027, many of the federal incentives homeowners may remember from the Inflation Reduction Act are no longer available. At August Homes, we prioritize providing our clients with up-to-date information for both federal and state programs.
Are Federal Tax Credits Still Available for Energy-Efficient Home Improvements Going Into 2027?
The federal Energy Efficient Home Improvement Credit, also known as Section 25C, previously provided tax credits for qualifying heat pumps, heat pump water heaters, insulation, exterior doors, windows, home energy audits, and certain HVAC systems. This credit ended for property placed in service after December 31, 2025.
Outdated Credits
Similarly, the Residential Clean Energy Credit, or Section 25D, previously provided a 30% federal tax credit for qualifying solar panels, geothermal systems, battery storage, and other clean-energy property. This homeowner credit is no longer available for expenditures made after December 31, 2025.
That means if you're researching a heat pump tax credit, HVAC tax credit, insulation tax credit, solar panel tax credit, water heater tax credit, or federal energy tax credit for a 2027 project, you should pay close attention to the dates on the information you find. Many online resources still describe incentives that applied to projects completed through 2025.
Energy-Efficiency Incentives in Maryland, Virginia, and Washington, DC
As we head into 2027, state, local, and utility programs are becoming increasingly important for DMV homeowners seeking energy-efficiency rebates. Available programs vary significantly by jurisdiction and may include incentives for solar, heat pumps, electrification, battery storage, EV charging, and other energy-saving improvements.
What Energy-Efficiency Tax Credits and Incentives Are Available to Maryland Homeowners?
Maryland homeowners may have access to programs supporting energy efficiency, solar energy, battery storage, EV charging, and home electrification.
For example, Maryland's FY2027 programs include opportunities related to residential solar, energy storage, and EV charging. Some programs have income requirements, funding limits, application windows, or require homeowners to reserve an incentive before beginning installation.
Because these programs can change during the fiscal year, homeowners planning a project in 2027 should check current Maryland Energy Administration and utility offerings before purchasing equipment or beginning work.
What Energy-Efficiency Tax Credits and Incentives Are Available to Virginia Homeowners?
Virginia's incentive landscape continues to evolve as we head into 2027.
The Virginia Department of Energy has been developing Home Efficiency Rebates and High-Efficiency Appliance Rebates that could support qualifying improvements, such as heat pumps, heat pump water heaters, insulation, air sealing, ventilation, electrical wiring, electric panel upgrades, and electric cooking equipment.
Because program availability and implementation timelines can change, homeowners planning a 2027 energy-efficient home improvement should verify the latest information through the Virginia Department of Energy and Virginia Energy Connect.
What Energy-Efficiency Tax Credits and Incentives Are Available to Washington, DC Homeowners?
Washington, DC homeowners may have access to local energy-efficiency and electrification incentives through programs such as the DC Sustainable Energy Utility (DCSEU).
Programs have included rebates for qualifying heat pumps, heat pump water heaters, induction cooking equipment, smart thermostats, appliances, electrical improvements, and other energy-saving home improvements.
DC programs and rebate amounts can change from one program year to the next. Homeowners planning projects for 2027 should therefore confirm current DCSEU and Department of Energy and Environment incentives before making purchasing decisions.
Solar, Heat Pumps, and High-Performance Home Improvements
Solar, heat pumps, insulation, and high-performance HVAC can all contribute to a more efficient and comfortable home. Although several former federal incentives—including the homeowner solar tax credit and heat pump tax credit—ended after 2025, DMV homeowners planning projects for 2027 may still find state, local, and utility incentives.
Are There Incentives for Installing Solar Panels in the DMV?
Potentially. Available solar incentives now depend heavily on where the home is located.
The former Residential Clean Energy Credit offered homeowners a 30% federal tax credit for qualifying solar panel expenditures through 2025. Homeowners planning new solar installations in 2027 should therefore be cautious when encountering older information advertising a 30% federal solar tax credit.
State and local opportunities may still be available. Maryland, for example, has FY2027 programs supporting qualifying residential solar projects.
For a new high-performance home, solar can also be considered as part of the home's broader energy strategy rather than as an isolated upgrade.
Are Heat Pumps Eligible for Rebates or Incentives in the DMV?
They can be. Heat pumps provide efficient heating and cooling and can be an important component of a high-performance or all-electric home. Heat pump water heaters can similarly reduce the energy required for domestic hot water.
Although the previous federal heat pump tax credit ended after 2025, heat pump rebates may remain available through state, District, and utility programs going into 2027.
Because availability varies across Maryland, Virginia, and DC, homeowners should research programs based on their home's specific location.
Can You Receive Incentives for Insulation, Air Sealing, and High-Performance Windows?
Depending on location and program availability, homeowners may find incentives for insulation, air sealing, windows, and other building-envelope improvements.
Advanced insulation and air sealing help reduce unwanted heat transfer and air leakage. High-performance windows and exterior doors can further strengthen the building envelope, improving comfort while reducing demand on heating and cooling systems.
The previous federal Energy Efficient Home Improvement Credit covered qualifying insulation, ENERGY STAR windows, and exterior doors through 2025. For 2027 projects, homeowners should instead investigate current state, District, and utility programs for insulation rebates, attic insulation rebates, window incentives, home energy audits, and whole-home efficiency improvements.
Are EV Charger and Electrical Panel Upgrade Incentives Still Available?
Some state, local, and utility incentives may remain available for EV charging and related electrical improvements going into 2027.
Maryland, for example, has an FY2027 residential EV charging rebate program. Other DMV programs may support electrical improvements associated with home electrification.
For a new custom home, planning sufficient electrical capacity from the beginning can also make it easier to accommodate EV chargers, heat pumps, induction cooking, solar panels, battery storage, and other electric technologies.
Incentives for New Energy-Efficient and Passive Homes
If you're planning new construction in 2027, incentives work differently than they do for existing-home upgrades. Programs for energy-efficient homes may exclude new construction or have separate requirements, making it important to determine eligibility before including an incentive in the project budget.
Are There Incentives for Building a New Energy-Efficient Custom Home?
Possibly, but many homeowner rebate programs are designed for improvements to existing homes rather than new construction.
Builder incentives are also different from homeowner incentives. The federal 45L New Energy Efficient Home Credit, for example, previously provided eligible contractors with credits for qualifying ENERGY STAR and Zero Energy Ready homes.
For anyone planning a new custom home in 2027, the key is to determine which current programs actually apply to new construction rather than assuming that rebates advertised for energy-efficient home improvements will also apply to a new build.
Does Building a Passive House Qualify Your Home for Additional Tax Credits or Rebates?
Building a passive house does not automatically provide a homeowner with a federal tax credit or rebate.
However, passive design principles align closely with many energy-efficiency goals, including exceptional insulation, airtight construction, high-performance windows and doors, controlled ventilation, and highly efficient mechanical systems.
As a Certified Passive House Builder (CPHB) through Phius, August Homes approaches these elements as an integrated system rather than a collection of individual upgrades. The goal is a home designed for exceptional comfort, healthy indoor air, energy efficiency, and long-term performance.
Planning Around Energy-Efficiency Rebates and Incentives
As we look toward 2027, finding an available energy-efficiency rebate is only the first step. Eligibility requirements, application deadlines, income limits, equipment specifications, funding availability, and rules for combining incentives should all be considered before construction or installation begins.
Can You Combine State, Local, Utility, and Federal Energy Incentives?
Sometimes. Combining multiple rebates and incentives is commonly referred to as incentive stacking.
Rules vary by program. Receiving one rebate may affect the qualifying project cost for another rebate. Some programs may prohibit homeowners from receiving multiple incentives for the same expense.
You should confirm current requirements before purchasing equipment or beginning construction.
Do Energy-Efficiency Incentives Have Income Limits?
Some do, while others may be available regardless of household income.
Many home energy rebates use household income or area median income to determine eligibility. Requirements can also depend on location, property type, equipment, project scope, and available program funding.
When Should You Research Incentives When Planning a Custom Home?
Ideally, homeowners planning to build in 2027 should research incentives during the earliest stages of design and planning.
Some programs require an application, approval, or rebate reservation before equipment is purchased or installed. Others have specific product, contractor, efficiency, or documentation requirements.
Considering incentives early also allows energy-saving decisions to become part of the overall home design rather than individual upgrades added later.
Build Energy Efficiency Into Your Home From the Beginning
At August Homes, high-performance construction goes beyond selecting an efficient HVAC system or adding solar panels. We consider how the entire home works together—from advanced insulation and air sealing to healthy indoor air, high-performance HVAC, windows, solar and battery integration, and smart energy technology.
Working With August Homes
If you're planning a custom home in 2027 and beyond, considering energy performance from the outset can create a more comfortable, resilient, and efficient home—and help identify available incentives before key design and construction decisions are made.
As you're researching, explore our process to see what to expect from initial consultation through construction and final delivery. You can also browse our portfolio for inspiration, review our DMV Cost Guide to better understand the investment involved, and explore our service area to learn where August Homes builds throughout Washington, DC, Northern Virginia, and Maryland.
Contact Us
Ready to start planning? Contact August Homes to discuss your property, priorities, and vision for a high-performance custom home.
Disclaimer
Tax credits, rebates, eligibility requirements, and available funding can change. Homeowners should confirm current requirements with the applicable government agency, utility provider, and a qualified tax professional before making financial or tax decisions.