Upgrading older windows can improve your home’s energy efficiency, enhance its curb appeal, improve its security, and create a more comfortable living environment. These benefits come at a cost, of course, but did you know that there are actually several tax credits and rebate programs you can use to offset that initial investment? Homeowners in California have access to a range of financial support when it comes to purchasing new windows. Let’s explore current rebates and tax credits for new windows.
How to Save Money on New Windows
Federal Tax Credits
If you’re upgrading to ENERGY STAR energy-efficient windows, you can take advantage of federal income tax credits through the Inflation Reduction Act (IRA) until 2032. Credits are available for 30 percent of the total cost and installation of the windows, up to $600 per year. The U.S. Internal Revenue Service (IRS) manages these credits, and you can claim them with your federal income taxes (using IRS Form 5695) for the year in which you make the upgrades. To qualify, your home must be located in the U.S. and be used as your principal residence. The credit cannot be applied to a newly built home. You may claim the maximum annual credit every year that eligible improvements are made, which means you may want to spread out your home improvements over a few years to maximize your federal tax savings. We encourage you to consult a tax professional to confirm your eligibility for tax credits on specific products and applications.
Please note that this information is current as of June 9, 2025, but keep in mind that it could change in the future. The One Big Beautiful Bill could repeal this credit if approved by the Senate.
California & Utility Rebates
As a resident of the Sunshine State, you can also make use of some other rebates and savings programs. For example, you may qualify for the following:
- SoCalGas offers an Energy Savings Assistance Program. Renters and homeowners can qualify based on either their income or their participation in specific assistance programs. The program assists with weatherization repairs, which help keep cool air indoors during summer and warm air inside during winter. These might include insulation updates, weather stripping, caulking, and minor window and door repairs. According to SoCalGas, customers could save up to 20 percent on their natural gas bill depending on the energy-efficient upgrades provided.
- Southern California Edison (SCE) also offers an Energy Savings Assistance Program that provides energy-savings home improvements and services to income-qualified renters and homeowners with homes that are at least five years old. Services may include weather-stripping, caulking, sealing of air leakage points, minor window repairs, and other weatherization services.
- The HERO program under the Property Assessed Clean Energy (PACE) program can help Southern Californians hoping to upgrade to energy-efficient windows. It’s a financing program that helps homeowners spread out the cost of window payments over time, providing 100% financing with repayments made through their property tax bill. However, it’s essential to do your due diligence, as PACE involves several risky issues. It adds a lien to your home, which can complicate refinancing or selling. Contractors are also known to mark up prices if they know you’re using PACE. In addition, some homeowners are surprised by the sharp increase in their property tax bills.
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In the future, homeowners in California can also explore the High-Efficiency Electric Home Rebate Act (HEEHRA), which is expected to launch soon. It covers weatherization measures up to $1,600 but does not include full window replacements.
If you’re planning to upgrade your windows, you can trust the experts at American Window Company. Since 1999, we have offered an extensive collection of high-quality windows, doors, shutters, blinds, and more. We are a small, family-owned business that is committed to providing excellent quality and on-time installation. In addition, we are properly licensed and insured to protect our employees and provide our customers with peace of mind. For a free estimate or more information about our products and services, please contact us today.
