The 25C heat pump tax credit expired. Here is what still works in 2026.

What expired: the 25C heat pump tax credit.

The 25C heat pump tax credit ended for property placed in service after December 31, 2025, so new installations are no longer eligible as of January 1, 2026. The Inflation Reduction Act had extended the credit through 2032, but P.L. 119-21, the federal budget law signed in July 2025, ended it early.

The Energy Efficient Home Improvement Credit (Internal Revenue Code Section 25C) provided up to 30% of project cost, capped at $2,000, on heat pumps meeting the highest Consortium for Energy Efficiency (CEE) efficiency tier, not counting CEE's advanced tier.

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. For a 2025 install, Form 5695 must list the heat pump's qualified manufacturer identification number (QMID), and the IRS allows no credit without it, so get it from your installer or the manufacturer. Keep the invoice and the manufacturer's certification statement with your records.

Section 25D geothermal credit (also ended December 31, 2025).

The geothermal heat pump credit, the Residential Clean Energy Credit (Section 25D), ended for expenditures made after December 31, 2025, the same date P.L. 119-21 (signed July 2025) ended 25C. Section 25D had covered 30% of a geothermal heat pump's total project cost, uncapped, and the Inflation Reduction Act had scheduled it to stay at 30% through 2032.

If your geothermal expenditures were made on or before December 31, 2025, you can still claim the credit on your 2025 return. A 2026 geothermal install gets no federal credit, so price it without one.

HVAC rebates that still work in 2026.

Four programs still pay in Clark County in 2026: Clark PUD rebates, Energy Trust of Oregon gas rebates for NW Natural customers, the state-funded HEAR program inside Vancouver city limits, and seasonal manufacturer promotions.

Clark PUD heat pump rebate program.

Clark PUD's heat pump rebates are unaffected by the federal change and continue across Vancouver and the rest of Clark County:

• Electric forced-air furnace to a central variable speed heat pump: $1,250
• Electric forced-air furnace to a central heat pump: $1,000
• Existing heat pump or electric zonal heat to a central variable speed heat pump: $500
• Ductless heat pump, single or multi-head: $900, limit one per home

In an existing home, every one of these needs electric heat today, and the $900 ductless rebate is only for homes heated by an electric furnace or electric zonal heat, not an existing heat pump. The three ducted amounts are paid only through an installer in Clark PUD's Contractor Network, which Pacific Peak has not joined. The $900 ductless rebate is the one we can file.

Our dedicated Clark PUD rebate guide covers who qualifies and what we can and cannot file.

NW Natural gas equipment rebates.

For homeowners staying on gas, Energy Trust of Oregon runs the rebates for NW Natural customers in Southwest Washington. As of October 2026, for an owner-occupied single-family home (Energy Trust heating incentives):

• Gas furnace of 95% AFUE or higher, used as the home's primary heat: $800. A furnace installed as backup for a heat pump does not qualify, and a carbon monoxide monitor is required on every floor with a bedroom
• Qualifying smart thermostat in a home heated by a gas furnace: $250 installed by a licensed contractor, $100 if you install it yourself (Energy Trust thermostat incentives)

Energy Trust needs the furnace application within 60 days of installation. These rebates are separate from Clark PUD's heat pump rebates, which are only for homes heated with electricity.

Washington HEAR rebates: one open in Vancouver, one not yet.

"HEAR" now refers to two different programs in Washington, and only one of them is open.

• State-funded HEAR, open now inside Vancouver city limits. The Washington State Department of Commerce funds local administrators through the state HEAR program, and the City of Vancouver received $500,000 in the current round. The Northwest Native Chamber runs it for low and moderate income households and small businesses within Vancouver city limits (nwnc.org/hear). You apply first; the program's own assessor recommends the upgrades, it connects you with an approved local contractor, and it pays that contractor directly, covering part or all of the cost depending on eligibility, funding and scope. Outside city limits, check Commerce's HEAR page for a local administrator.
• Federal heat pump rebate, not open yet. The Inflation Reduction Act rebate first called HEAR, which DOE renamed High-Efficiency Electric Home Rebates in 2026, offers up to $8,000 toward a heat pump for income-qualifying households. Commerce administers it, and as of October 2026 it has not launched in Washington. DOE's May 2026 program rules require states that have not launched to drop fuel switching, so the rebate will pay only to replace existing electric equipment with more efficient electric equipment, not to replace a gas, oil or propane furnace, and insulation and air sealing come first unless the home already meets the state's level.

Commerce says to apply and be approved before buying equipment or starting work. Because the Vancouver program assigns its own approved contractors, apply there before you sign a quote with anyone.

Manufacturer rebates.

American Standard runs seasonal instant rebates through participating dealers. Its fall 2026 offer, valid October 1 to November 15, 2026, is up to $900 on qualifying Platinum and Gold systems paired with an eligible furnace or air handler and an American Standard smart thermostat (americanstandardair.com). Mitsubishi Electric's U.S. rebate page lists utility rebates only, with no manufacturer rebate of its own as of October 2026.

Manufacturer rebates come and go on rolling schedules. We always check the current manufacturer programs at quote time and apply whatever is active.

What a heat pump costs after 2026 rebates.

A Clark County home pays $8,800–$27,200 in 2026 for a ducted heat pump installation that replaces a gas furnace, less any manufacturer promotion running when you buy:

• System cost: $8,800–$27,200 installed, by home size and tier (our 2026 prices)
• Clark PUD rebate (gas-to-electric ducted): $0. The program only pays to convert electric heat, and the ducted rebate also requires a Contractor Network installer
• Manufacturer rebate: only when a promotion is running for the model you choose, $0 otherwise
• Federal credit: $0 (25C expired)

In 2025, a system that met the 25C efficiency tier could also take up to $2,000 off.

The bottom line.

The federal 25C expiration took away up to $2,000 on a qualifying heat pump, but a project planned around the 2025 credit can still make sense in 2026; the financial picture is just less favorable than it was in 2025.

Want a written quote with all current rebates applied to your specific project? Request one here: we build the rebate analysis into every estimate.

Questions homeowners ask.