Section 25C heat pump tax credit ended Dec 31, 2025 — systems installed in 2026 are not eligible. If your install was completed in 2025, you can still claim it on your 2025 return (filed in 2026). What still works: Clark PUD rebates up to $2,500, NW Natural rebates for gas furnaces, Section 25D geothermal credit at 30% through 2032, and state-level Inflation Reduction Act rebates that have not started yet but are coming.
If you had been planning a 2026 heat pump install partly to capture the federal tax credit, the math just changed. Here is what is actually available right now in Clark County, what is gone, and what is still on the horizon.
What expired: the 25C credit.
The Energy Efficient Home Improvement Credit (Internal Revenue Code Section 25C) provided up to 30% of project cost, capped at $2,000, on qualifying heat pump installations. It applied to systems meeting the highest Consortium for Energy Efficiency (CEE) efficiency tier — which most premium Mitsubishi and American Standard heat pumps did.
The credit was authorized by the Inflation Reduction Act with a sunset of December 31, 2025. Congress did not renew it. As of January 1, 2026, new installations are no longer eligible.
One exception: 2025 installs filed in 2026.
If your heat pump was installed and placed in service on or before December 31, 2025 — even if you have not filed taxes yet — you can still claim the credit on your 2025 federal return when you file it during 2026 tax season. Keep the manufacturer's certification statement and the invoice. You will need both for Form 5695.
What still works in 2026.
Clark PUD heat pump rebate program.
Unaffected by the federal change. For Vancouver, Camas, Battle Ground, Ridgefield, Washougal, Brush Prairie, and the rest of Clark County, the utility rebate continues:
- Ducted heat pump replacing electric resistance heat: up to $2,500
- Ducted heat pump replacing gas furnace: up to $1,200
- Ductless heat pump (first head): up to $1,500
- Additional ductless heads: $250 each, up to four heads
We covered the full Clark PUD program in our dedicated rebate guide — paperwork requirements, contractor eligibility, the 90-day filing deadline. Worth reading if a heat pump is in your near-term plans.
Section 25D geothermal credit (still active through 2032).
If you are considering a geothermal heat pump — which uses underground heat exchange instead of outdoor air — the Residential Clean Energy Credit (Section 25D) is still very much alive. It covers 30% of total project cost, uncapped, through 2032.
For a typical Clark County geothermal install in the $35,000–$60,000 range, that is an $10,500–$18,000 federal credit. Geothermal is not the right answer for every home — it requires either a large yard for horizontal loops or a deep well for vertical — but where it fits, the math is extraordinary.
NW Natural gas equipment rebates.
For homeowners staying on gas (high-efficiency furnaces, gas water heaters), NW Natural's rebate program runs on a seasonal schedule. As of early 2026:
- 95% AFUE+ gas furnace: up to $500
- 97% AFUE+ condensing gas furnace: up to $700
- Smart thermostat (Nest, Ecobee, Honeywell T-series): $50
Stackable with manufacturer rebates from American Standard. Not stackable with Clark PUD heat pump rebates (different fuel, different utility).
IRA state rebate programs (coming, not yet live).
The Inflation Reduction Act funded two large state-administered rebate programs that have been slowly rolling out:
- HEAR (Home Electrification and Appliance Rebates) — up to $8,000 for low-and-moderate-income households on heat pump installs
- HER (Home Efficiency Rebates) — performance-based rebates tied to whole-home energy savings
Washington State Department of Commerce is the administering agency in WA. Oregon Department of Energy in OR. Both programs have funding allocated; both have been slow to launch. Best guess: HEAR opens broadly in WA in mid-to-late 2026. We track this monthly and will update existing clients when programs go live.
Manufacturer rebates.
Mitsubishi runs seasonal manufacturer rebates — typically $200–$500 off select hyper-heat ductless installs in spring and fall. American Standard runs similar programs through Authorized Dealers, often $500–$1,000 off premium Platinum and Gold installs.
These come and go on rolling schedules. We always check the current manufacturer programs at quote time and apply whatever is active.
The honest math for 2026.
For a typical Clark County homeowner replacing a gas furnace with a ducted heat pump in 2026:
- System cost: $12,000–$22,000 (installed, including permit and warranty)
- Clark PUD rebate (gas-to-electric ducted): up to $1,200
- Manufacturer rebate (varies): $300–$700 typical
- Federal credit: $0 (25C expired)
Net out-of-pocket: roughly $10,100–$20,500. For the same system in 2025, the federal 25C credit added another $2,000 — meaningful but not massive in the context of the total project. The heat pump is still the right call in most cases; the math just shifted slightly.
Watch for legislative changes
Congress can re-authorize 25C at any time. In recent years, multiple energy-related tax credits have been extended retroactively — sometimes with weeks of notice. We track federal HVAC tax policy closely and notify existing clients of any changes that affect their warranty period.
The bottom line.
The federal 25C expiration removed roughly $2,000 from the typical heat pump conversion. Everything else — Clark PUD, manufacturer rebates, geothermal credits, gas-side rebates — is unchanged. If you were planning a project to maximize the 2025 credit and missed the deadline, the project still makes sense; the financial picture is just a touch less favorable than it was four months ago.
Want a written quote with all current rebates and credits applied to your specific project? Request one here — we build the rebate analysis into every estimate, no extra step required.