The federal government, state agencies, and utility companies are together offering homeowners thousands of dollars to upgrade their heating and cooling systems. Most homeowners either don’t know the money exists, or they tried to figure out the details, hit a wall of confusing government websites, and gave up. That’s understandable. The rebate landscape in 2026 is genuinely complicated: three separate layers, each with its own rules, timelines, and eligibility requirements. This guide maps all three layers, shows you specific dollar amounts by state, and explains exactly how to combine them.
TL;DR: The federal Section 25C credit expired for equipment placed in service after December 31, 2025. In 2026, savings may come from state-administered IRA rebate programs and utility or state incentives, subject to local availability and eligibility. For one state example, review the current program sources in our New Hampshire HVAC replacement cost guide. Check DSIRE.org, your state energy office, and your utility before signing. Use our HVAC cost estimator only after confirming each rebate.
What Are the Federal HVAC Rebate Programs in 2026?
The federal Section 25C tax credit does not apply to equipment placed in service in 2026. The current federal funding path is through state-administered home energy rebate programs where a state has launched and funded them. Utility and state incentives are separate and vary by service territory.
The 25C Tax Credit Expired for New Installations
Section 25C applied to qualifying property placed in service from January 1, 2023 through December 31, 2025. It is not available for new 2026 installations. Homeowners with qualifying 2025 equipment can still review IRS Form 5695 and claim the credit on their 2025 return.
For qualifying 2025 installations, air-source heat pumps were capped at $2,000 and central air conditioners or qualifying gas furnaces at $600 per item, subject to the IRS annual limits. Those historical caps should not be subtracted from a 2026 quote.
If your qualifying equipment was placed in service in 2025, keep the required manufacturer identification information and purchase records for Form 5695. The former credit was nonrefundable, so it could not exceed your tax liability.
HEEHRA — Income-Based Instant Rebates
HEEHRA (the High-Efficiency Electric Home Rebate Act) is the other major IRA program. Unlike the 25C credit, HEEHRA is an instant rebate applied at point of sale by a certified contractor; you don’t file anything with the IRS. The amount depends on your household income relative to the Area Median Income (AMI) for your county.
Income tiers for heat pump rebates: households below 80% AMI qualify for 100% of eligible costs, up to $8,000. Households between 80% and 150% AMI qualify for 50% of eligible costs, up to $4,000. Above 150% AMI, HEEHRA doesn’t apply. To find your county’s AMI, search HUD’s income limits tool or ask the contractor administering the rebate.
HEEHRA is state-administered. The federal government allocates funds to each state, and each state runs its own program. As of early 2026, more than a dozen states have launched HEEHRA programs, with additional states expected to launch through 2026 (U.S. Department of Energy / Sears Home Services, 2025). Check energy.gov/save/home-upgrades for the current launch status in your state.
| Program | 2026 Status | Potential Heat Pump Amount | How Paid | Income Limit |
|---|---|---|---|---|
| 25C Tax Credit | Expired for property placed in service after Dec. 31, 2025 | None for 2026 installs | Qualifying 2025 claims use IRS Form 5695 | Historical credit had no income limit |
| State-administered home electrification rebate | Varies by state and funding availability | Program-specific | Follow the state administrator’s process | Program-specific |
Which States Have the Strongest HVAC Rebate Programs?
Massachusetts, Georgia, New York, North Carolina, and Virginia have the most layered programs in 2026, meaning homeowners there can combine multiple sources of savings into a genuinely large total. California had one of the richest programs until February 2026, when its HEEHRA single-family program fully reserved all available funding. Here’s what’s currently active in the top states.
Massachusetts homeowners should compare current Mass Save heat pump rebates with any state-administered federal rebate program for which they qualify. Section 25C is not part of a 2026 stack. Confirm the current Mass Save amount and whether programs can be combined before signing, because funding and stacking rules can change.
Georgia offers one of the largest state-level programs through the Georgia Environmental Finance Authority (GEFA): up to $16,000 in total savings depending on household income and projected energy savings (energyrebates.georgia.gov, 2026). The program has two tracks: the Home Efficiency Rebates (HER) program, which covers whole-home improvements including HVAC, and the Home Electrification and Appliance Rebates (HEAR) program, which focuses on heat pump appliances specifically. Georgia Power also runs its own utility rebate program with additional incentives for qualifying customers.
California ran one of the richest HEEHRA programs in the country, offering up to $8,000 for low-income single-family homeowners. As of February 24, 2026, the program is fully reserved statewide and is no longer accepting new income verification applications (TECH Clean California / California Energy Commission, 2026). Homeowners can join the waitlist, but no new rebates are being issued. This is a useful reminder to act when programs are open: HEEHRA funds are finite and allocations run out.
New York operates through NYSERDA’s Clean Heat program plus utility rebates from Con Edison, National Grid, NYSEG, and RG&E. Income-qualified households can access the EmPower+ program for additional support. New York launched its HEEHRA program and is actively issuing rebates through certified contractors.
North Carolina and South Carolina homeowners served by Duke Energy Progress or Duke Energy Carolinas can access heat pump rebates ranging from $300 to $1,200 depending on equipment type and efficiency level. North Carolina has also launched its HEEHRA program. South Carolina homeowners should check Dominion Energy’s HVAC rebate program in addition to Duke, depending on which utility serves their address.
Virginia, Michigan, Indiana, Colorado, and Rhode Island all have active HEEHRA programs as of early 2026. Dominion Energy administers its own utility rebate program in Virginia. Consumers Energy and DTE cover utility rebates in Michigan. Xcel Energy covers Colorado and Minnesota.
Texas and Florida have not launched state-run HEEHRA programs as of March 2026. Texas homeowners can still access utility rebates from CenterPoint Energy, Oncor, and Austin Energy (typically $300–$750 for qualifying heat pumps). Florida homeowners should check Duke Energy Florida and FPL’s rebate programs directly.
| State | HEEHRA Status | Max State/Utility Rebate | Key Program |
|---|---|---|---|
| Massachusetts | Active | Up to $8,500 | Mass Save (Eversource/National Grid) |
| Georgia | Active | Up to $16,000 | Georgia GEFA (HER + HEAR) |
| California | Waitlist only | Up to $8,000 | TECH Clean California |
| New York | Active | Varies by utility | NYSERDA Clean Heat + Con Ed / National Grid |
| North Carolina | Active | $300–$1,200 (Duke) | Duke Energy Progress |
| Virginia | Active | Varies by equipment | Dominion Energy Virginia |
| Michigan | Active | Varies | Consumers Energy / DTE |
| Colorado | Active | Varies | HEAR program / Xcel Energy |
| Indiana | Active | Varies | Duke Energy Indiana |
| Rhode Island | Active | Varies | National Grid |
| Texas | Not launched | $300–$750 (utility only) | CenterPoint / Oncor / Austin Energy |
| Florida | Not launched | Varies (utility only) | Duke Energy Florida / FPL |
How Do Utility HVAC Rebates Work?
Utility rebates run independently from federal and state programs, and they stack with both. Duke Energy alone offers heat pump rebates across six states ranging from $300 to $1,200 per installation, depending on the territory and equipment type (rebatebeacon.com, November 2025). The key requirement: you have to be a customer of that specific utility, and rebates apply only within their electric service territory.
Most utility rebates follow a post-installation reimbursement model. You or your contractor installs the qualifying equipment, submits an application form with proof of purchase and AHRI certification numbers, and the utility processes the rebate within four to eight weeks. Some programs allow the contractor to submit on your behalf. A few utilities run instant rebates at point of sale, but that’s the exception rather than the rule.
Major utility programs in 2026 include: Duke Energy (NC, SC, OH, IN, KY, FL), Dominion Energy (VA, SC), Georgia Power, FPL (Florida), Eversource and National Grid (Northeast via Mass Save), CenterPoint Energy (TX), Oncor (TX), Xcel Energy (CO, MN), Con Edison (NY), and NYSEG/RG&E (NY).
The fastest way to find your utility’s current program: go to your utility’s website, navigate to “Energy Efficiency” or “Rebates,” and look for residential HVAC or heat pump incentives. The ENERGY STAR Rebate Finder (energystar.gov/rebate-finder) lets you enter your zip code and filter by equipment type to find both utility and state programs in one search.
Can You Stack Federal, State, and Utility HVAC Rebates?
Some current state and utility programs can be combined, but there is no universal stacking rule. Section 25C is not available for 2026 installations. Verify eligibility, funding reservation, and cost-basis rules with every administrator before treating multiple incentives as a single discount.
For example, a Georgia homeowner considering a $14,000 heat pump should ask which GEFA program track applies, whether a Georgia Power incentive is available, and whether those programs can be combined. Do not add every published maximum together.
- Federal Section 25C credit: $0 for equipment placed in service in 2026
- GEFA state-administered rebate: confirm the open program, income tier, eligible cost, and reserved amount
- Georgia Power utility incentive: confirm the current qualifying model and amount
Use only the amounts each administrator approves for the same project. Published maximums may apply to different income tiers or program tracks and may not be cumulative.
State-administered and utility rebates may be paid at different times, including an invoice discount, check, or bill credit. Confirm the payment method and timing for each approved program, especially if financing the installation.
Some states reduce the HEEHRA rebate by the amount of state program rebates received, so verify with your contractor and the program administrators before purchase. For a full breakdown of the federal tax credit rules, see our heat pump tax credit guide for 2026.
Where Can You Find HVAC Rebates Available in Your State?
The DSIRE database (dsireusa.org), maintained by North Carolina State University and funded by the U.S. Department of Energy, is the most comprehensive source of state energy incentive data in the country, covering rebate programs, tax credits, and loans for all 50 states and U.S. territories (DSIRE / NCSU). It’s updated regularly and links directly to administering agencies.
Here’s how to use it: go to dsireusa.org, click your state on the map, then filter results by “Rebate Program” and “Residential.” Each listing shows the program administrator, current rebate amounts, eligibility requirements, and a link to the application. Note the last-updated date on each entry and verify directly with the administering agency before making a purchase, since program details change and funds can run out.
The ENERGY STAR Rebate Finder offers a complementary approach: enter your zip code and select equipment type to see active programs in your area. It’s particularly good for finding utility rebates that DSIRE may not capture in real time.
Your HVAC contractor is also a useful resource. Contractors who work with these programs regularly know which local utility rebates are active, which equipment qualifies, and whether they’re certified to administer HEEHRA rebates at point of sale. An experienced installer can often handle the rebate paperwork on your behalf, saving you hours of form-filing.
How Do You Claim HVAC Rebates After Installation?
The claim process depends on which rebate type you’re pursuing. Each of the three layers follows a different procedure, and confusing them is the most common reason homeowners miss out on money they qualified for.
Claiming Section 25C for a 2025 Installation
If qualifying equipment was placed in service in 2025, claim the former 25C credit on the 2025 federal return using IRS Form 5695. Keep the required manufacturer identification information and the purchase receipt showing eligible cost. New 2026 installations do not qualify.
Claiming HEEHRA Rebates
HEEHRA works through certified contractors. Before hiring anyone for a heat pump installation, confirm they’re HEEHRA-certified in your state’s program. The contractor will verify your income eligibility, reserve the rebate funds before starting work, and apply the rebate as an instant discount on your invoice. You don’t file separately. Using a non-certified contractor means you lose access to the rebate entirely, since HEEHRA isn’t claimable after the fact.
Claiming Utility Rebates
Most utility rebates are post-installation reimbursements. After installation is complete, submit an application to your utility’s rebate program online or by mail. Processing takes four to eight weeks in most programs, and some utilities allow the contractor to submit on your behalf. Required documents typically include:
- Proof of purchase (contractor invoice showing full installed cost)
- AHRI certification number for the specific equipment model installed
- Contractor’s license number
- Your utility account number
The biggest mistake homeowners make: buying equipment before confirming it qualifies. Each program has specific efficiency thresholds (SEER2, HSPF2, AFUE) that the equipment must meet. Your contractor should verify the model against the program’s qualifying product list before ordering. See our HVAC efficiency ratings guide to understand what SEER2 and HSPF2 ratings mean for rebate eligibility.
What HVAC Equipment Qualifies for Rebates?
Air-source heat pumps often receive the largest current utility and state-administered incentives. The former Section 25C amounts apply only to qualifying equipment placed in service through December 31, 2025. For a 2026 project, use the qualifying product list for each current program.
For historical 2025 claims, Section 25C had equipment-specific efficiency thresholds. Current utility and state programs may use different thresholds:
- Air-source heat pumps: minimum HSPF2 of 7.8 and SEER2 of 16.0
- Central air conditioners: minimum SEER2 of 16.0
- Gas furnaces: minimum AFUE of 97%
- Heat pump water heaters: UEF of 2.0 or higher
Check the AHRI directory (ahridirectory.org) to verify that your specific model meets current program requirements before purchase. Your contractor should confirm the model qualifies before ordering equipment.
Ductless mini-split systems may qualify for current state-administered or utility heat pump rebates if they meet that program’s requirements. Section 25C is not available for a mini-split placed in service in 2026. Geothermal systems use separate federal rules, so verify their current status directly with the IRS. See our heat pump vs. AC cost comparison for system cost differences.
Frequently Asked Questions About HVAC Rebates by State
Can I get rebates if I replace my AC with a new gas furnace?
The federal Section 25C credit is not available for a gas furnace placed in service in 2026. Most state-administered electrification rebate programs focus on electric heat pumps, though some utilities still offer gas-furnace incentives. Check your utility’s current qualifying product list before deciding on equipment type.
How do I know if my household income qualifies for HEEHRA?
HEEHRA uses HUD’s Area Median Income (AMI) as the benchmark, and it varies by county. Households below 80% AMI qualify for the full rebate (100% of eligible costs, up to $8,000 for a heat pump). Households between 80% and 150% AMI qualify for 50% of eligible costs, up to $4,000. Households above 150% AMI don’t qualify for HEEHRA. Your state’s HEEHRA administrator or a certified contractor can verify your income tier before you commit to a purchase.
Can I receive a federal tax credit and a state rebate for the same installation?
Not for a new 2026 installation because Section 25C expired after December 31, 2025. Current state and utility rebates may be combined only when each administrator allows it. Verify the specific stacking and cost-basis rules before purchase.
Which states have not launched HEEHRA rebates as of 2026?
As of March 2026, Texas, Florida, and several other states had not launched state-run home electrification rebate programs. Homeowners in those states should check current utility and state incentives. The expired Section 25C credit is not an alternative for a 2026 installation. The DOE’s Home Upgrades page maintains a current map of state program launch status.
What is the DSIRE database and how do I use it to find rebates?
DSIRE (dsireusa.org) is a database maintained by North Carolina State University and funded by the U.S. DOE. It’s the most comprehensive source of state energy incentive information in the country, covering all 50 states. To find HVAC rebates: visit the site, click your state, filter by “Rebate Program” and “Residential,” and review the current listings. Always verify amounts directly with the administering agency since programs change.
For 2026 installations, potential savings come from state-administered home energy rebate programs where available plus utility or state incentives. Section 25C expired after December 31, 2025. Do not add published maximums together until every administrator confirms that your project qualifies and the programs can be combined.
Programs change and funds run out. California’s HEEHRA program filled up in February 2026. The time to check what’s available in your state is before you buy equipment, not after. Use DSIRE to find your state’s programs, confirm with a HEEHRA-certified contractor if you’re income-eligible, and use our HVAC cost estimator to run the numbers on your net cost after rebates are applied. For a deeper look at how federal incentives work alongside our complete HVAC tax credits and rebates guide.