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: Federal IRA programs offer up to $8,000 (HEEHRA, income-based) or a $2,000 tax credit (25C, no income limit) for qualifying heat pumps. Stack those with state programs: Massachusetts up to $8,500, New Hampshire up to $6,250, Georgia up to $16,000, plus utility rebates from Duke Energy, Dominion, and FPL. Check your state at DSIRE.org for the full picture. Use our HVAC cost estimator to see your net cost after rebates.
What Are the Federal HVAC Rebate Programs in 2026?
Two federal programs apply to HVAC replacements in 2026: the 25C tax credit (available to any homeowner, up to $2,000 for heat pumps) and the HEEHRA instant rebate (income-based, up to $8,000 for qualifying heat pumps, per the U.S. Department of Energy). They work differently, have different eligibility rules, and can be used together.
The 25C Tax Credit — Available to Everyone
Section 25C of the tax code covers 30% of qualified HVAC expenses up to an annual dollar cap per equipment category. It resets every year through 2032, so you can claim it again if you do additional upgrades in future tax years. There’s no income requirement. You claim it by filing IRS Form 5695 with your tax return for the year the equipment was installed.
The caps matter here. Heat pumps (air-source) get the most generous cap: up to $2,000 per year. Central air conditioners and qualifying gas furnaces are capped at $600 each. A heat pump water heater has its own $600 cap, separate from the HVAC limit. So a homeowner replacing their central AC with an air-source heat pump can claim up to $2,000. If they also add a heat pump water heater, that’s another $600 on top.
One thing to remember: this is a tax credit, not a check. It reduces what you owe the IRS. If you owe $1,800 in federal taxes and claim a $2,000 heat pump credit, you owe nothing, but you don’t get the extra $200 back. Keep your AHRI certification number (from your contractor) and your purchase receipts; you’ll need both when filing Form 5695.
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 | Who Qualifies | Max Amount (Heat Pump) | How Paid | Income Limit |
|---|---|---|---|---|
| 25C Tax Credit | Any homeowner | $2,000/year | Reduces tax bill; IRS Form 5695 | None |
| HEEHRA | Income-qualified homeowners | $8,000 (low-income); $4,000 (moderate) | Instant rebate at point of sale | 150% AMI maximum |
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 can stack Mass Save rebates of up to $8,500 for a whole-home heat pump replacement (or $1,125 per ton for partial replacements) with federal HEEHRA and 25C credits. Combined savings for a qualifying homeowner can exceed $12,000 on a single heat pump installation in 2026 (Mass Save / Endless Energy, 2026). The Mass Save program is administered by Eversource, National Grid, Unitil, and Cape Light Compact.
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?
Yes, you can stack all three layers in most cases, and the total savings can be substantial. The 25C federal tax credit and HEEHRA rebates are independent programs and can be combined. State rebate programs are generally stackable with both federal programs. Utility rebates sit on top of all of them. A well-stacked rebate package in states like Massachusetts or Georgia can recover 60%–100% of a heat pump installation’s cost.
Here’s a concrete example. A Georgia homeowner with household income between 80% and 150% AMI replaces a central AC system with a qualifying air-source heat pump costing $14,000 installed. The rebate stack looks like this:
- 25C federal tax credit: $2,000 (claimed on next year’s tax return)
- HEEHRA instant rebate (moderate income tier): up to $4,000 (applied at point of sale)
- Georgia GEFA Home Efficiency Rebate: $4,000–$8,000 depending on projected energy savings
- Georgia Power utility rebate: $300–$750
Total rebate stack: $10,300–$14,750. A $14,000 installation could cost as little as a few hundred dollars net, depending on where the Georgia HER amount lands based on energy savings verification. Even at the lower end, the homeowner recovers more than 70% of the project cost through combined incentives.
One rule to understand: HEEHRA is an instant rebate applied before you leave the contractor’s invoice. The 25C credit comes later when you file taxes. State and utility rebates may come as a check or bill credit weeks after installation. You don’t receive all three at once. Plan your cash flow accordingly, 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 the 25C Federal Tax Credit
The 25C credit is filed with your annual federal tax return for the year the equipment was installed. Get the AHRI certificate number for your specific equipment model from your contractor before they leave the job site. Keep the purchase receipt showing the full installed cost. When you file taxes, complete IRS Form 5695 and attach it to your return. Your tax software will guide you through the fields.
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 get the most generous treatment across all three rebate layers: up to $2,000 under 25C, up to $8,000 under HEEHRA, and the highest utility rebates in most programs. Central air conditioners and gas furnaces qualify for 25C at a lower cap ($600 each) but do not qualify for HEEHRA, which covers electric heat pumps only.
The 25C credit has specific efficiency thresholds beyond ENERGY STAR certification. Your equipment must meet all minimums for its category to qualify:
- 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 (a type of heat pump) qualify for both 25C and HEEHRA if they meet the efficiency thresholds. Geothermal heat pump systems qualify for the separate 25D Residential Clean Energy Credit (30% of total installed cost, no dollar cap through 2032) rather than 25C. See our heat pump vs. AC cost comparison for a breakdown of system types and their respective rebate eligibility.
Frequently Asked Questions About HVAC Rebates by State
Can I get rebates if I replace my AC with a new gas furnace?
The 25C tax credit allows up to $600 for qualifying high-efficiency gas furnaces (AFUE 97% or higher). HEEHRA covers only electric heat pumps, not gas systems. Most utility rebate programs favor heat pumps, though some include high-efficiency gas furnaces at lower amounts. Check your utility’s 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?
Yes. The 25C federal tax credit and most state rebate programs are independent and can be stacked. HEEHRA rebates can also be combined with 25C in most cases, though some states reduce the HEEHRA amount if state rebates are also received. Utility rebates sit on top of all of them. Verify the specific stacking rules with your state’s program administrator and your contractor before purchase.
Which states have not launched HEEHRA rebates as of 2026?
As of March 2026, Texas, Florida, and several other states have not launched state-run HEEHRA programs. Homeowners in those states can still access the 25C federal tax credit and any utility rebates their provider offers. The DOE’s Home Upgrades page (energy.gov/save/home-upgrades) 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.
Three layers of savings are available to most homeowners replacing HVAC equipment in 2026: the 25C federal tax credit (up to $2,000 for heat pumps, no income limit), HEEHRA instant rebates (up to $8,000 for qualifying low-income households), and utility or state program rebates that can add thousands more on top. The stacking potential is real: well-positioned homeowners in states like Massachusetts and Georgia can recover the majority of a heat pump installation’s cost through combined programs.
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.