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

When it comes to delivering savings to Americans while bolstering domestic jobs, the federal Energy Efficient Home Improvement Tax Credit (also known as the 25C tax credit) punches well above its weight.

The 25C tax credit helps Americans invest in energy-efficient insulation, doors, windows, water heaters, and heating/cooling equipment — upgrades that can collectively cut energy bills by enough¹ to wipe out the 30 percent surge in home energy bills since 2020.² This incentive is broadly popular: more than 2.3 million homeowners used 25C in 2023, receiving an average of $880 in tax relief.³

But household savings aren’t the only benefit: as Congress begins work on a tax package, a new analysis by Rewiring America has found that every dollar Americans receive in tax savings through 25C supports ten dollars in consumer demand for efficient appliances and homes. In turn, that consumer demand supports some 240,000 domestic jobs, specifically:

• 37,000 domestic manufacturing jobs, such as insulation and heating and cooling equipment manufacturing
• 21,000 domestic distribution jobs, such as truck transportation and wholesale and retail distribution jobs
• 41,000 local installation jobs, such as residential HVAC and contract and electrical workers who install insulation, electrical panel upgrades, heat pump water heaters, heat pumps, and conventional water heaters and heating systems
• 143,000 jobs supporting the above sectors, including local small businesses