HVAC Rebates After the Tax Credit Ended: What They Are Worth

The kinds of HVAC rebates you will see

Offers differ by place, but they tend to come in a few shapes:

Utility equipment rebates. A set amount for a qualifying air conditioner, heat pump or thermostat, paid to you or applied by the installer.
Tune-up or maintenance offers. A discount on a service visit to keep older equipment efficient.
State and local programs. Run by a state energy office or a city, sometimes with higher amounts for lower income households.
Federal home energy rebates. Run by states under a Department of Energy program. See HOMES and HEEHR, which changed in May 2026.

The federal home improvement tax credit is gone for new installs: the IRS says it does not apply to property placed in service after December 31, 2025. Many web pages still describe it.

What cooling costs at your electric price

We use the same assumptions as our central air conditioner page: 3,500 watts, 8 hours of compressor time a day and 4 months of cooling, which comes to about 3,405 kWh a year. At each state's 2025 average price, a year of cooling costs about:

Yearly cost of a typical central air conditioner at the lowest and highest state electric prices in 2025
Place	Cents per kWh	Cooling cost a year	Each 10 percent saved
North Dakota	11.82	$402	$40
Idaho	11.83	$403	$40
Nebraska	12.05	$410	$41
US average	17.23	$587	$59
Hawaii	40.40	$1,375	$138
California	31.35	$1,067	$107
Massachusetts	30.41	$1,035	$104

Source: U.S. Energy Information Administration, Form EIA-861 (final 2025 data), average residential price. A real system runs more or fewer hours than this example, so use it to compare places, not to predict your bill. Run your own numbers in the electricity cost calculator.

How long a rebate takes to matter

A rebate and lower running costs both pay you back. The table shows how many years of savings a $500 rebate equals at the US average price, for three assumed efficiency gains. The percentages are assumptions you replace with the saving your equipment rating promises, not claims about any product.

Years of cooling savings that a 500 dollar rebate equals at the US average price
Assumed saving on cooling use	Saved a year	Years of savings a $500 rebate equals
10 percent	$59	8.5
20 percent	$117	4.3
30 percent	$176	2.8

Read it this way: if a new system saves 20 percent on cooling in a home like this one, a $500 rebate is worth about as much as the savings from several summers. Add the purchase price of the system, and the rebate becomes one piece of a longer decision. A rebate that is easy to claim is useful. A rebate that pushes you to buy equipment you do not need is not.

Steps before you sign a contract

Find the offers first. Enter your ZIP code on the ENERGY STAR rebate finder, then check your electric company's site.
Read the qualifying rules. Many rebates apply only to listed models and need a licensed installer.
Reserve the rebate if the program lets you, and ask whether it is paid to you or credited by the contractor.
Get at least three written quotes that name the model, the size and the efficiency rating, and compare them on total cost after rebates.
Ask for a load calculation. An oversized system cycles on and off, which wears it out and leaves the air damp.
Keep every receipt and the model plate photo for the rebate application.

If you are looking at a heat pump

A heat pump heats and cools with one system, so rebates for it often differ from those for an air conditioner. Read heat pump rebates for what the federal program covers now, and compare running costs with the heat pump vs furnace calculator.

Source: Federal dates and program rules were read on October 10, 2026 from the sources at the end of the page. Rebate programs open, change and close often, so confirm every offer with the program before you buy. This is not tax or financial advice.

Sources and further reading

Frequently asked questions

Is there a federal tax credit for a new air conditioner?

The IRS says the home improvement credit does not apply to property placed in service after December 31, 2025. Utility, state and federal rebate programs may still apply.

How do I find HVAC rebates in my area?

Enter your ZIP code on the ENERGY STAR rebate finder, check your electric company, and look at your state energy office.

Should I wait for a rebate before replacing a broken system?

Check the rules first, because many programs need pre-approval. If the system has failed in summer or winter, ask the program whether an emergency replacement still qualifies, and do not delay safety.

How much does central air cost to run?

A typical house on our central air page uses about 3,405 kWh a year, about $587 at the 2025 US average price. Your use will differ.