If you’ve been planning a heat pump or AC replacement around a federal tax credit, there’s an important update: the Section 25C Energy Efficient Home Improvement Credit ended for qualifying property placed in service after December 31, 2025. Equipment ordered or purchased in 2025 but installed in 2026 does not qualify. Here’s what actually changed, why, and what savings options are still available for Rock Hill-area homeowners this year.
Key Takeaways
• The Section 25C and 25D federal tax credits ended after December 31, 2025, following changes under the One Big Beautiful Bill Act, signed July 4, 2025, and addressed in IRS guidance.
• There is no Section 25C federal HVAC tax credit available for qualifying equipment placed in service in 2026, even if the equipment was ordered or purchased before the deadline.
• State and utility-level rebates may still offer savings, although availability varies by location. South Carolina’s federal Home Energy Rebate programs have not yet fully launched as of September 2026.
• Comparing utility rebates, manufacturer promotions, contractor pricing, equipment efficiency, financing, and proper system sizing can all help reduce the upfront or long-term cost of an HVAC replacement.
What Actually Changed
For several years, homeowners could claim 30% of eligible costs for qualifying heat pumps, air conditioners, furnaces, and certain other home energy improvements through the Section 25C Energy Efficient Home Improvement Credit, subject to annual and equipment-specific limits.
The One Big Beautiful Bill Act accelerated the termination of Section 25C, along with the related Section 25D Residential Clean Energy Credit. For Section 25C, qualifying property had to be placed in service by December 31, 2025. If your HVAC system was installed and placed in service on or after January 1, 2026, it does not qualify, regardless of when you ordered the equipment or signed a contract.
Is There Any Way to Still Claim It?
No, not for a qualifying Section 25C HVAC system placed in service in 2026.
This is worth being direct about because outdated information is still circulating online. There is no phase-out period or reduced Section 25C credit for HVAC equipment installed after December 31, 2025, and ordering or paying for equipment in 2025 does not preserve the credit if installation and placement in service occurred in 2026.
⚠ Confirm before publishing: Federal tax law can change. Confirm that no subsequent legislation has reinstated, extended, or replaced the Section 25C HVAC credit before publishing or updating this article.
What Savings Options Are Still Available
The federal Section 25C credit is gone, but it is not the only potential source of savings for an HVAC upgrade:
- South Carolina is developing its Home Efficiency Rebates and Home Electrification and Appliance Rebates programs. The HEAR program can provide up to $8,000 nationally toward a qualifying heat pump for certain income-eligible households, but South Carolina’s programs have not yet fully launched as of September 2026. Eligibility, rebate amounts, and availability will depend on the state’s final program requirements.
- Utility company rebates may still be available depending on your electric provider. Rock Hill residential electric customers, for example, may qualify for certain SmartChoice HVAC rebates, while York Electric Cooperative also offers incentives for qualifying heat pump systems. Always check current eligibility requirements before purchasing equipment.
- Manufacturer rebates and promotions may be available seasonally and vary by brand, model, and installation period.
- Financing options can spread the cost over time rather than requiring the full amount upfront. See Elite’s financing options for what’s currently available.
Where Homeowners Can Find Real Savings Now
With the Section 25C federal credit off the table, homeowners should look at the complete cost of an HVAC replacement rather than focusing on one incentive.
Contractor pricing, available utility rebates, manufacturer promotions, financing terms, equipment efficiency, and correct system sizing can all influence what you ultimately spend.
A proper load calculation is also important. Installing a system that is too large or too small for the home can affect comfort, efficiency, humidity control, equipment cycling, and long-term operating costs.
If you’re comparing repair versus replacement on an aging system, our guides on heat pump repair signs and furnace repair cost walk through when repair may still make sense versus when replacement could be the better long-term move.
Should This Change Your Replacement Timeline?
If you were planning a 2026 upgrade specifically to capture the federal credit, it’s worth re-running the numbers without it. The project may still make sense based on efficiency, comfort, repair costs, and reliability, but losing the credit can affect the overall payback calculation.
If your current system is still operating reliably and repairs remain reasonable, there may be less financial pressure to replace it simply because of a tax incentive. HVAC lifespan varies significantly based on system type, installation quality, maintenance, usage, and local conditions, so age should be considered alongside the actual condition of the equipment.
Frequently Asked Questions
When exactly did the federal HVAC tax credit end?
Section 25C ended for qualifying property placed in service after December 31, 2025, following changes made by the One Big Beautiful Bill Act signed July 4, 2025. A qualifying HVAC system placed in service January 1, 2026 or later does not qualify for the Section 25C credit.
I ordered my system in 2025 but it wasn’t installed until 2026 — do I still qualify?
No. For Section 25C, the relevant date is when the qualifying property is installed and placed in service, not simply when it was ordered, contracted, or paid for. A system placed in service after December 31, 2025 does not qualify.
Are there any state tax credits that replace the federal one?
Some states and utilities offer their own rebates and incentive programs separate from the former federal Section 25C credit. Availability varies significantly by state and utility provider.
South Carolina is also developing its federally funded Home Energy Rebate programs, including HEAR and Home Efficiency Rebates, but these programs have not yet fully launched as of September 2026. Homeowners should check the South Carolina Energy Office and their local utility for current programs before making a purchase decision.
Does this affect financing or only tax credits?
This change affects the federal tax credit. Financing options offered through contractors and lenders are separate and can remain available regardless of the Section 25C expiration.
Let’s Find the Real Savings for Your Upgrade
We’ll walk you through current utility rebates, financing options, equipment choices, and available promotions so you know what’s actually available before you commit to a system.
Call (803) 366-4663 or request service online to schedule.
Elite Air & Heat LLC | (803) 366-4663 | 2175 Mt Gallant Rd, Rock Hill, SC 29732
