How do you actually pay for this?
The federal tax credit is gone. State and utility programs, low-interest energy loans, and a handful of borrowing routes are what is left. This page puts them in order, cheapest money first, and points you at the detail for your project.
Free money, then cheap money, then fast money
Almost every article about paying for a home energy project starts with a loan. That is the wrong end of the problem. The order that saves the most money is boring and it does not change: take everything you do not have to repay, then borrow at the lowest rate available to you, and only then reach for the fast, expensive credit that is easiest to get.
What changed in 2026 is the first rung. The federal 25C credit, which covered 30% of many upgrades up to annual caps, was terminated for property placed in service after December 31, 2025 under the One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025). 25D went with it on the same date. Plenty of pages online still describe both as live through 2032. They are not, and a homeowner who plans around them will be short several thousand dollars at tax time.
What replaced them is more scattered and, in some states, more generous: utility rebates, state efficiency programs, federal rebate money passed through state agencies, and energy-specific loans at rates a bank will not offer. The catch is that all of it is local. There is no single national answer any more, which is exactly why the first move is checking your own state.
Six ways to pay, in order of what they cost you
Work down this list, not up it. Each rung is more expensive than the one above it.
Rebates and incentives
Money you never pay back. State and utility programs are now the largest single source of help for most households, and in program states they can cover a large share of envelope work. Find yours before you price anything else.
0% and low-interest state energy loans
Roughly a dozen states and green banks run energy-specific lending at rates a bank will not match. Massachusetts runs a 0% HEAT Loan up to $25,000 (a lifetime maximum per customer, not per project, verified July 15, 2026). Others sit between 2% and 8%.
Utility on-bill financing
Some utilities lend directly and collect on your monthly bill. Tacoma Power in Washington finances a heat pump up to $20,000 at 0% over 7 years, with pre-approval and a participating contractor required (verified July 11, 2026).
Home equity
A HELOC or a home equity loan is usually the cheapest large sum available to a homeowner with equity, and the interest is secured by the house. That security is the whole trade: the rate is lower because the stakes are higher.
Contractor or dealer financing
Offered at the kitchen table, approved in minutes, and priced accordingly. Some of it is genuine low-APR lending. Some of it is deferred interest, which is a different product wearing the same clothes. Read the promotional terms before you sign.
Personal loan or credit card
Unsecured, fast, and the most expensive money on this list. It has a real place when a system fails in January and nothing else can move fast enough, but it should be the path you take last, not first.
Start with what you are replacing
Each of these goes deep on one project: what it costs, which programs pay for it, and how people usually cover the rest.
Heat pump
Seven ways to pay for a whole-home or ductless system, the state loan programs that beat a bank, and what changed in 2026.
Furnace or boiler replacement
The urgent one. Six payment paths, plus the honest comparison against a heat pump once rebates are counted.
Insulation and air sealing
The most heavily subsidized work in home energy, and the reason federal rules now put it first in line.
Water heater
What a replacement costs, why the heat pump model changes the math, and how to pay for it when the tank fails.
Or start with the thing you are stuck on
The money questions homeowners actually ask, each with its own answer page.
Is the federal tax credit gone?
Yes. 25C ended for equipment placed in service after December 31, 2025. Here is what you can still claim and what replaced it.
What do the 2026 federal rebate rules say?
HEAR and HOMES in plain English: what DOE Program Notices 26-1 and 26-2 changed, who still qualifies, and which states are live.
Which states have 0% energy loans?
Every state and utility energy loan program we have verified at the administrator, with rates, caps, and the conditions attached.
Can I combine rebates and incentives?
The order of operations for stacking rebates, loans, and utility incentives without disqualifying yourself from one of them.
HELOC, home equity loan, or personal loan?
A neutral comparison of the three borrowing routes homeowners actually use for energy work, and who each one fits.
How does contractor financing work?
Dealer financing explained: true 0% APR versus deferred interest, where the cost hides, and the questions to ask before signing.
What if I cannot afford any of it?
The Weatherization Assistance Program and state low-income programs that replace heating systems at no or reduced cost.
Is a heat pump still worth it?
The payback question without the federal credit, using current installed costs and current fuel prices.
What we would tell a friend
Rebates first, always
Every other source of money on this page costs you something. Rebates do not. Work out what your state and utility pay before you decide how much you need to borrow, because the answer often changes the size of the loan.
A federal allocation is not a rebate
Federal money assigned to your state does not mean a program is open to you. Each state has to file a blueprint, get approval, and launch its own program with its own rules. Check the state, not the headline.
Every figure has a constraint
A rebate cap is attached to an income tier, a measure, a deadline, or a contractor list. When a number appears on this site without its condition attached, that is our mistake. When it appears that way anywhere else, treat it as marketing.
The cheapest upgrade is the one you do not oversize
Air sealing and insulation shrink the equipment you need. Doing them first often saves more than any financing rate you could negotiate.
Money questions
How do most people pay for home energy upgrades in 2026?
A mix: state and utility rebates first, then borrowing for the rest. The federal 25C tax credit ended for equipment placed in service after December 31, 2025, so the federal share of a typical project is smaller than it was, and state programs now carry most of the weight.
Is there still a federal tax credit for home energy upgrades?
No. Both 25C and 25D were terminated by the One Big Beautiful Bill Act (Public Law 119-21) for property placed in service after December 31, 2025. If your work was placed in service on or before that date, you claim it on your 2025 return, filed in 2026, on IRS Form 5695.
What is the cheapest way to finance a home energy project?
Rebates, because you do not repay them. After that, a state or utility energy loan is usually the cheapest borrowed money, and several run at 0%. Home equity comes next, then contractor financing, then unsecured personal credit.
Do I have to pay for the whole project up front?
Most rebates are claimed after the work is done and paid for, which is why financing and rebates are usually used together. Some programs are point-of-sale and come off the invoice directly. Which one applies depends on your state's program design, so check your state page before you plan the cash flow.
Should I borrow for an energy upgrade at all?
It depends on what the upgrade replaces. Financing a system that is failing is usually cheaper than emergency-replacing it twice. Financing an optional upgrade at a high rate can cost more than the energy it saves. Run your own numbers before you decide.
Before you borrow anything
Match your rebates
Every federal, state, and utility program you qualify for, in one pass. It changes how much you need to borrow.
Get the order right
Envelope first, equipment second. Sequencing shrinks the equipment you buy, which shrinks the loan.
Check the quote
What belongs on a fair quote, typical installed prices, and the red flags that mean keep shopping.
Find the free money first.
Rebates are the only money on this page you never pay back, and they are entirely local. Check what your state and utility pay before you price a single loan.
Match my rebates