As energy costs show no signs of falling, and temperatures will start plummeting for the winter, homeowners are looking for smart ways to improve comfort and cut heating bills. Upgrading the insulation in your home to high-performance materials like spray foam insulation is a guaranteed way to improve comfort, as well as efficiency.
Until now, many homeowners have been able to combine state rebates with the federal 25C tax credit to offset the cost of insulation and air sealing, but change is coming at the end of 2025.
The federal Energy Efficient Home Improvement Credit (25C), which has provided 30% back on insulation material costs, up to $1,200 per year, is set to expire at the end of 2025.
Fortunately, there will still be great insulation rebates available in 2026! In the mean time, here’s a look at what’s going away, what you can still take advantage of, and how you can save big on making your home warmer, healthier, and more energy efficient.
The Federal 25C Tax Credit Is Ending After 2025
The 25C tax credit, officially called the Energy Efficient Home Improvement Credit, was expanded under the Inflation Reduction Act to help homeowners offset the cost of energy-efficient upgrades. For insulation and air sealing projects, the credit allows for a deduction of up to $1,200 on your federal taxes in the year the upgrades were installed.
We saw the benefit of this program firsthand – this tax credit has helped thousands of homeowners across Vermont make insulation upgrades more affordable.
However, it’s now confirmed that this federal credit will expire after 2025 and will not be renewed in 2026. That means your insulation work has to be completed in 2025 to qualify for the 25C tax savings.
What Incentives Will Still Be Available for Insulation in 2026?
While the federal tax credit is going away, Vermont still has great cash rebate programs that are active, well-funded, and expected to continue beyond 2025.
Efficiency Vermont Rebates
Vermont Foam Insulation partners with Efficiency Vermont through the Home Performance with ENERGY STAR® program to help homeowners access some of the most robust insulation rebates in the country.
Here’s what is available through this program:
- 75% off project costs, up to $4,000 for most homeowners
- 75% off project costs, up to $9500 for moderate income homeowners
- 90% off project costs, up to $9,500 for income-eligible households
- 0% interest loans for energy efficiency projects, up to $20,000
These rebates cover comprehensive energy-saving and weatherization upgrades, including:
- Old insulation removal
- Attic insulation
- Basement and crawl space insulation
- Spray foam and cellulose insulation
- Professional air sealing, like attic hatches and basement bulkheads
Bonus: These Rebates Are Not Going Away!
According to Efficiency Vermont and local energy partners, these rebate programs are secured through 2025, and many components are expected to continue or evolve into 2026 and beyond. That makes them one of, if not, the most reliable source of insulation savings moving forward.
How to Qualify (and Maximize Your Savings)
At Vermont Foam Insulation, we make the rebate and tax credit process simple and stress-free. We’re not just insulation experts, we’re your partner in energy efficiency savings. Here’s how it works:
- On Site Free Assessment: Our team visits your home to assess insulation needs and identify energy-loss trouble spots.
- Custom Insulation Plan: We design a solution focused on key areas like the attic and basement, where energy loss is most common.
- Installation: Our certified team installs high-performance insulation and professional air sealing.
- Rebate + Credit Guidance: We ensure you have all the correct rebate paperwork and that you have everything needed to claim your tax credit before it expires.
