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What Home Improvement Upgrades Are Available for Tax Credits in California?

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April 3, 2024

There are many reasons to upgrade your home to high-efficiency equipment in 2024, like energy savings, improved indoor air quality, and more. However, one of the most underrated benefits of investing in efficient HVAC equipment and home performance improvements is that they’re often eligible for tax credits and other incentives.

Brower Mechanical is a high-performance, whole-home contractor serving the Greater Sacramento area. We stay current on the available incentives throughout the area to help our customers maximize their savings on home upgrades that will improve comfort and lower energy costs. Here are the available energy efficiency tax credits available for 2024.

25C Tax Credit

Also known as the Energy Efficient Home Improvement Tax Credit, the 25C credit offers a federal tax credit of 30% the cost of qualifying energy efficient upgrades. While the 25C tax credit can be claimed year after year as you make upgrades to your home, there is an annual cap on how much can be claimed on eligible home improvements and any remaining balance will not roll over.

Energy Audits

An energy audit is an in-depth analysis of your home and its performance that allows an experienced technician to determine where your home is losing energy and diagnose efficiency issues.

Annual Cap: $150

Insulation & Air Sealing

By creating a protective barrier around your home, insulation and air sealing work together to make a healthier living environment, improve home comfort, and lower your energy bills.

Annual Cap: $1,200

Installation labor not included


When properly installed, ENERGY STAR-certified windows can help reduce noise pollution, improve comfort, and save energy. 

Annual Cap: $600

Heat Pumps & Heat Pump Water Heaters

Heat pumps use electricity to move heat rather than rely on combustion to create it, making them perfect for home electrification. Both ducted and ductless mini split air-source heat pumps are eligible for the 25C tax credit, along with heat pump water heaters.  

Annual Cap: $2,000

High-Efficiency Furnaces & Air Conditioners

Furnaces and air conditioners that meet the minimum efficiency requirements are also eligible for the home improvement tax credit. 

Annual Cap: $600 per item

Investment Tax Credit (ITC) for Solar and Geothermal

Also referred to as the Solar Tax Credit, the ITC covers 30% of the total cost of installing solar energy systems, battery storage, or a geothermal heating and cooling system. Unlike the 25C tax credit, there is no annual cap on the amount that can be claimed and any remaining balance from the Investment Tax Credit will roll over to the following year.   

Combine Tax Credits with Local Rebates for Maximum Savings

Home energy tax credits aren’t the only way to save on improving your comfort and efficiency. Many of the upgrades listed above are also eligible for rebates in Greater Sacramento through local utility companies, like SMUD and PG&E, or other entities like TECH Clean California. These rebate programs are often changing, so reach out to our team for the most accurate information. 

Brower Mechanical has been helping Elk Grove, Roseville, and Rocklin area homeowners with their HVAC and home performance needs since 1979. Whether you’re looking to electrify your home or just want to save on your heating and cooling costs, our qualified team of experts can help you.

Maximize your savings and comfort with Brower Mechanical. Call 916-624-0808 or contact us to get started with an in-home assessment.

Looking to save on home upgrades?

Find out what’s eligible for energy efficiency tax credits.


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