Federal tax credit (25C)
The federal Energy Efficient Home Improvement Credit (25C) lets you claim a percentage of the cost of qualifying equipment on your taxes:
- Heat pumps: up to $2,000 per year for qualifying high-efficiency models.
- High-efficiency AC and furnaces: up to $600 each for qualifying equipment.
- It’s an annual credit, so larger projects can sometimes be staged across years.
California rebates
- TECH Clean California: point-of-sale rebates for qualifying heat pump systems, applied through participating contractors.
- HEEHRA (Home Electrification rebates): income-qualified rebates that can cover a large share of a heat pump install for eligible households.
- Utility rebates: local utilities periodically offer their own efficiency rebates — availability changes year to year.
Why heat pumps win: Because California is pushing home electrification, the largest incentives are reserved for heat pumps. A heat pump replaces both your AC and furnace, so you’re often comparing a partially-rebated heat pump against a full-price AC + furnace.
How to qualify and claim
- Choose qualifying equipment. Efficiency ratings matter — we’ll recommend models that meet the credit and rebate requirements.
- Keep your paperwork. Save the invoice and the equipment’s efficiency certification (AHRI certificate) for tax time.
- Let us handle the rebates we can. For programs like TECH, the rebate is often applied through the contractor — we’ll walk you through what you qualify for.
- Claim the 25C credit when you file your federal taxes (consult your tax professional).
Incentive amounts and eligibility rules change, so the best move is a free in-home estimate: we’ll match you with equipment that maximizes your available rebates and tax credits, and show you the net cost after incentives and financing.
Frequently Asked Questions
The federal 25C credit offers up to $2,000 for qualifying heat pumps and up to $600 each for qualifying high-efficiency ACs and furnaces. Consult your tax professional, and keep your invoice and AHRI certificate.
Yes. Programs like TECH Clean California provide point-of-sale rebates for qualifying heat pumps, and income-qualified households may access larger HEEHRA electrification rebates.
Yes — for contractor-applied programs we handle what we can and guide you on the rest, including which documents you’ll need for the federal tax credit.
High-efficiency ACs and furnaces can qualify for smaller credits, but the largest incentives are reserved for heat pumps as part of California’s electrification push.