It’s no secret that energy bills are rising for the American homeowner. According to the Federal Reserve, energy prices have surged 30 percent since 2020. American households are now spending about $1 billion a day to heat, cool, and power their homes. And with prices expected to keep rising, families need real solutions to protect themselves from escalating costs.¹ 

Two key tax credits — the Energy Efficient Home Improvement Tax Credit (25C) and the Residential Clean Energy Tax Credit (25D) — are helping millions of families cut energy costs by making their homes more efficient and enabling them to generate their own energy. In 2023 alone, these tax credits helped more than 3.4 million American households — across every state — invest in energy efficiency upgrades like insulation, water heaters, and HVAC equipment, and in geothermal, solar, and battery installations.

New analysis from Rewiring America shows that by installing technologies supported by 25C and 25D, American households could effectively roll back the clock on their energy costs. Just using one of those tax breaks could help a household pay the equivalent of 2020 prices today. These savings would only continue into the future, protecting families against price increases. 

Without efficiency upgrades, the average American household is paying $3,080 per year for energy — 32 percent more than in 2020. But the average home that leverages 25C can cut up to $990 from their annual energy costs, completely wiping out the last four years of energy price spikes.² The average home that leverages both 25C and 25D can cut their annual energy bills by more than 70 percent, or $2,240 per year.³

Investing in energy-efficient insulation, doors, windows, water heaters, and HVAC systems means using less energy to keep your home humming and comfortable — and lower bills every month. Installing geothermal or rooftop solar creates a long-term hedge against rising prices, producing abundant, low-cost energy for decades. And these upgrades aren't just about saving money today. They're an investment in long-term financial security.

If energy costs keep rising at their current rates, the average household’s annual energy bill will climb to $3,550 by the end of 2026.⁴ But the savings from 25C and 25D will grow by $350, to $2,590 per year.

This much-needed relief from rising prices is available to American households in every part of the country — so long as the 25C and 25D tax credits remain intact.

All 433 congressional districts in the contiguous U.S. would see average household energy bill savings of at least $1,500 per year in 2026. In 173 congressional districts, the average household bill savings would be over $2,600 per year.

“These tax credits empower the American household to make money-saving decisions,” said David Friedman, Rewiring America senior director, federal policy. “The best insurance against rising energy prices is through the upgrades supported by these two tax credits. More Americans should be made aware of these options. And the credits should be protected — if not expanded — by Congress, which has been tasked by the American people to address the energy affordability crisis.” 

The methodology and assumptions used in this analysis are available here. 

See also: The small but mighty federal tax credit that supports 240,000 jobs nationwide

1.  See EIA, January 2025; Dallas Fed Energy Survey, March 2025; Natural Gas Intelligence, December 2024; Kiplinger, February 2025. 

2. Savings based on adoption of a set of qualifying energy-efficient technologies (insulation, windows and doors, heat pumps, and heat pump water heaters).

3. Savings assumes rooftop solar is included in addition to the energy-efficient technologies.

4. Based on the state-specific price increases for natural gas, electricity, propane, and heating oil, from the EIA, from 2020-2024.