HVAC Rebates and Tax Credits in Central Texas (2026 Guide)

Quick answer: The federal 25C tax credit for heat pumps, central air conditioners and insulation ended for equipment placed in service after December 31, 2025. In 2026, the savings that remain are utility rebates (if your electric provider offers them), manufacturer promotions and financing. Each has its own rules, so check them before you sign a contract.

Is the federal HVAC tax credit still available in 2026?

No, not for new installations. The Energy Efficient Home Improvement Credit, often called the Section 25C credit, used to cover part of the cost of qualifying heat pumps, central air conditioners, insulation and other upgrades. Under the 2025 federal budget law commonly known as the One, Big, Beautiful Bill, the IRS states that the credit will not be allowed for any property placed in service after December 31, 2025.

Timing is about the install date, not the payment date. The IRS’s FAQs on the new law explain, for the closely related residential clean energy credit, that it’s based on when installation is completed. A deposit paid in 2025 doesn’t help if the system went in during 2026.

If qualifying equipment was installed and placed in service in 2025, you may be able to claim the credit on your 2025 tax return, subject to the IRS rules at the time. Talk to a tax professional about your situation; we’re HVAC people, and we can’t give tax advice.

What savings are still available for a new AC or heat pump?

With the federal credit gone, three kinds of help are left:

• Utility rebates. Some electric providers in Central Texas, including city utilities and electric cooperatives, offer rebates for high-efficiency AC and heat pump replacements, duct sealing, attic insulation or smart thermostats. Programs, amounts and deadlines differ from one provider to the next and change during the year. Look up your provider on your electric bill, then check its website for current efficiency programs.
• Manufacturer promotions. Equipment makers run seasonal rebates and extended warranty offers on certain product lines. These usually come through the installing contractor.
• Financing. Spreading the cost over time doesn’t lower the price, but it can make a higher-efficiency system affordable now, which pays back through lower bills. See our financing options.

Income-qualified households may also find free or low-cost weatherization help (insulation, duct sealing and similar repairs) through local utility or community programs.

What do utility rebates usually require?

Every program sets its own fine print, but these requirements are common:

• You must be a residential customer of that provider.
• Many programs only pay when a contractor on the program’s participating list does the work and submits the paperwork.
• The rebate is usually for replacing older equipment, not new construction.
• The new equipment has to meet minimum efficiency ratings (SEER2, EER2 and, for heat pumps, HSPF2), and all the matched parts are often replaced together.
• Some programs ask for proper load calculations (such as ACCA Manual J), city permits and an inspection after install.
• Applications often have to be filed within a set window after the work is done.

What should you ask before you sign a contract?

• Which rebates, if any, does this exact system qualify for, and at which efficiency tier?
• Is the contractor on the participating list for the program you’re counting on?
• Who files the paperwork, and what documents will you need?
• Can you get the equipment model numbers in writing, so you can check them against the program rules yourself?
• Are there manufacturer promotions or financing offers that can be combined with a utility rebate?

Read the current terms on the program’s official page before you commit, since amounts and eligibility can change during the year.

The bottom line

The federal tax credit is gone for systems installed in 2026, so local programs and manufacturer offers matter more than they used to. Check your electric provider’s current rebates, ask your contractor which ones your system qualifies for, and confirm the details before you buy. Final eligibility and rebate amounts are always up to the program.

Frequently asked questions

Can I get the federal tax credit for a heat pump installed in 2026?

No. The IRS says the Energy Efficient Home Improvement Credit is not allowed for property placed in service after December 31, 2025.

Are there still rebates for heat pumps in Central Texas?

Sometimes. It depends on your electric provider. Some utilities and cooperatives offer rebates on qualifying high-efficiency heat pumps, often through participating contractors. Check your provider’s website for current programs.

Do I need a specific contractor to get a utility rebate?

Often, yes. Many utility programs only pay when a contractor on their participating list does the work and files the application. Ask before you sign.

Are there rebates for duct sealing and attic insulation?

Some utility programs have included duct sealing, air sealing and attic insulation, and income-qualified households may get these at no cost through weatherization programs. Availability depends on your provider.

Heat pump upgrades are where rebates most often come into play; learn about our heat pump installation services. To compare efficiency tiers before you call, build your system online, then ask us which current offers may apply.

Related guides: Should You Replace Your AC to Get a SEER2 System?, The Benefits of an Energy-Efficient HVAC System and Can a Heat Pump Keep Up With a Texas Freeze?.

About Gold Eagle Services: This guide comes from the team at Gold Eagle Services, a family-run Austin HVAC, indoor air quality and mold remediation company founded in 2017. We’re licensed (TACLA119235 and RCO1783), insured and bonded, and we serve homes across the greater Austin area.

Need help with this in your home? Learn about our air conditioning repair and installation, or call 512-489-4653 to schedule a visit.

Related Gold Eagle service: AC repair in Austin