The Inflation Reduction Act (IRA) introduced the largest set of clean-energy incentives in U.S. history — and HVAC upgrades were one of the biggest winners. But with recent legislative changes rolling back some federal tax credits, many homeowners are asking:
“Will HVAC incentives still be available in 2026?”
“How can I still save money on a new system?”
Even with certain programs phasing out, there are still strategic ways to benefit from energy-efficient HVAC upgrades in 2026. Here’s everything homeowners need to know.
Understanding What Changed: Federal HVAC Tax Credits Ending After 2025
The IRA originally provided generous federal tax credits for new HVAC systems through the Energy Efficient Home Improvement Credit (25C). These included:
- 30% tax credit on qualifying HVAC equipment
- Up to $2,000 for heat pumps
- Up to $600 for central A/C or furnaces
- Credits for insulation, electrical upgrades, and home envelope improvements
However, a 2025 legislative rollback means:
Most federal HVAC tax credits expire for equipment placed in service after December 31, 2025.
This means homeowners installing in 2026 will NOT qualify for the 25C federal tax credit unless future legislation reinstates them.
But that doesn’t mean all incentives disappear.
THERE’S NEVER BEEN A BETTER TIME TO BUY OUR HIGHEST EFFICIENCY SYSTEMS.
Our highest-efficiency heating and cooling systems offer several homeowner benefits. From energy savings, to comfort-enhancing Evolution™ System technologies, to longer component-specific warranties, there’s a lot to like. And now there’s another potential benefit, thanks to Uncle Sam: the Inflation Reduction Act of 2022.
Effective Jan 1, 2023: Provides a tax credit to homeowners equal to 30% of installation costs for the highest efficiency tier products, up to a maximum of $600 for qualified air conditioners and furnaces, and a maximum of $2,000 for qualified heat pumps.
Learn more: https://www.bryant.com/en/us/before-you-buy/federal-tax-credits/
What Savings Homeowners Can Still Access in 2026
1. State and Utility HVAC Rebates Continue
Many states — including Illinois — still offer rebates such as:
- Heat pump installation rebates
- Energy-efficient air conditioner incentives
- Gas-to-electric fuel-switching rebates
- Smart thermostat rebates
These programs often renew annually and can save homeowners $300–$2,500 or more, depending on equipment type and utility company.
2. IRA-Funded Rebate Programs May Still Be Active
Two major programs authorized by the IRA are rolling out through state energy offices:
- HOMES Rebate Program
- High-Efficiency Electric Home Rebate (HEEHR) Program
These rebates are not tax credits — they are point-of-sale or post-installation discounts. Depending on household income, rebates may cover:
- Up to 50–100% of a heat pump installation
- Electrical panel upgrades
- Weatherization improvements
Illinois’ rollout timing determines availability in 2026, but many states expect active programs through 2028–2030.
3. Energy Savings Still Create Long-Term Value
Even without federal credits, high-efficiency HVAC systems offer:
- Lower monthly energy bills
- Reduced repair costs
- Better year-round comfort
- Increased home value
Heat pumps, in particular, can reduce heating costs by 30–60% depending on regional climate and fuel prices.
Which HVAC Systems Offer the Best 2026 Savings Potential?
If homeowners want to maximize value in 2026, these technologies stand out:
✔ High-Efficiency Heat Pumps
Still eligible for many state and utility rebates.
Offer both heating and cooling with exceptional efficiency.
✔ Variable-Speed Air Conditioners
Use less energy, reduce noise, and lower monthly bills.
✔ Smart Thermostats
Many utilities offer instant rebates of $50–$100.
✔ Ductless Mini-Splits
Ideal for additions, older homes, or high-efficiency upgrades.
How Homeowners Should Plan Their HVAC Projects for 2026
1. Check Local Utility Rebates First
Programs change yearly — ComEd, Nicor, and other Illinois utilities typically offer generous incentives.
2. Ask Your HVAC Contractor About Upcoming Changes
Many contractors stay updated on:
- State energy rebates
- Heat pump incentives
- Dealer or manufacturer promotions
- Utility-approved system lists
3. Consider Financing + Rebate Stacking
Even without federal tax credits, combining:
- State rebates
- Utility rebates
- Manufacturer financing
…can significantly lower upfront costs.
4. Move Quickly if You Want Federal Tax Credits
If installation occurs before December 31, 2025, homeowners may still qualify for the 25C credit — but the clock is ticking.
Final Thoughts
Although federal tax credits may expire in 2026, homeowners can still benefit from:
- State and utility HVAC rebates
- Upcoming IRA rebate programs
- Energy savings from modern systems
- Heat pump incentives that remain robust at the local level
For homeowners looking to save money, reduce energy bills, and modernize their home comfort, 2026 is still a strong year for HVAC upgrades — but planning is key.
Will federal HVAC tax credits still be available after 2025?
No, most federal HVAC tax credits are set to expire for equipment placed in service after December 31, 2025, unless future legislation reinstates them.
- Federal HVAC Tax Credits Ending After 2025: Most federal tax incentives for HVAC equipment will expire after December 31, 2025, unless future legislation changes this, affecting the ability to claim credits in 2026.
- Alternative Incentives Remain Available in 2026: Homeowners can still take advantage of state and utility rebates, IRA-funded rebate programs, and the long-term energy savings from modern systems, despite the expiration of federal credits.
- Best HVAC Systems for 2026 Savings: High-efficiency heat pumps, variable-speed air conditioners, smart thermostats, and ductless mini-splits offer significant savings potential and are supported by rebates and incentives.
- Planning Your HVAC Projects for 2026: Homeowners should check local utility rebates, consult with HVAC contractors on upcoming incentive changes, consider financing options, and act before the end of 2025 to qualify for federal credits.
- Why 2026 Still Offers Opportunities for HVAC Upgrades: Despite the federal tax credits ending, homeowners can benefit from state and utility rebates, upcoming IRA programs, and ongoing energy savings, making it an advantageous time for HVAC upgrades.
What incentives are still accessible in 2026 for HVAC upgrades?
Homeowners can still access state and utility rebates, IRA-funded rebate programs, long-term energy savings, and local incentives for energy-efficient systems.
What types of HVAC systems offer the best savings potential in 2026?
High-efficiency heat pumps, variable-speed air conditioners, smart thermostats, and ductless mini-splits are among the systems that provide significant savings and rebates.
How should homeowners plan their HVAC upgrades for 2026?
Homeowners should check local utility rebates, consult with HVAC contractors about upcoming changes, consider financing options, and act quickly before the end-of-year deadline for federal credits.
Why is 2026 still a good year for HVAC upgrades despite federal tax credits ending?
Because homeowners can benefit from state and utility rebates, upcoming IRA rebate programs, ongoing energy savings, and local incentives, making it a favorable time for HVAC modernization.
