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Philadelphia Area HVAC
Rebates & Incentives Guide 2026
What every Greater Philadelphia homeowner needs to know about saving money on a new central AC or heat pump this year — from PECO rebates to York and Amana manufacturer offers.
1 What Changed in 2026 — The Big Picture
The landscape for HVAC incentives shifted significantly on January 1, 2026. Federal tax credits that once put thousands of dollars back in homeowners' pockets have expired, but meaningful savings are still available through PECO's utility rebate program and manufacturer promotions from York and Amana.
Through December 31, 2025, homeowners could claim federal tax credits under Section 25C of the tax code (part of the Inflation Reduction Act):
- Up to $2,000 for qualifying heat pumps (30% of cost)
- Up to $600 for qualifying central air conditioners (30% of cost)
- Up to $600 for qualifying electrical panel upgrades
Congress passed the One Big Beautiful Bill Act in July 2025, which sunset both the 25C and 25D credits effective January 1, 2026. As a result:
- There are no federal tax credits for central AC or air-source heat pump installations in 2026
- Geothermal heat pumps remain eligible for a 30% federal tax credit through 2032
- Pennsylvania has not yet activated a state HEAR program
Note on Future Federal Incentives
The HEAR (Home Electrification and Appliance Rebates) program — funded through the Inflation Reduction Act — could eventually bring additional point-of-sale rebates to Pennsylvania homeowners. However, federal funding has faced political uncertainty, including a brief freeze in early 2025 and ongoing Congressional efforts to repeal the program. Pennsylvania has not yet activated HEAR. If and when it does, income-qualified homeowners could see rebates of up to $8,000 for heat pumps. Check with your installer for the latest updates as this situation continues to evolve.
What this means practically: savings available to Greater Philadelphia homeowners in 2026 come from PECO's Act 129 utility rebates and manufacturer promotions from brands like York and Amana.
2 Already Installed Before January 1, 2026?
If your qualifying system was installed and fully operational by December 31, 2025, you are still eligible to claim the federal tax credit on your 2025 tax return — filed in spring 2026. Do not miss this opportunity.
What you need to file:
- IRS Form 5695 (Residential Energy Credits), filed with your federal return
- Your installation invoice showing total cost (equipment + labor)
- Documentation of the system's efficiency rating (SEER2 / HSPF2 specs)
- The Qualified Manufacturer Identification Number (QMID) — required for 2025 installations. Your installer should have provided this at purchase. York's and Amana's QMIDs are available through their dealer networks.
Credit amounts for qualifying 2025 installations:
| System Type | Credit Amount | Efficiency Minimum (2025) |
|---|---|---|
| Air-source heat pump | 30% of cost, up to $2,000 | CEE Highest Tier (SEER2 ≥17.0 / HSPF2 ≥9.5 for split systems) |
| Central air conditioner | 30% of cost, up to $600 | CEE Highest Tier (SEER2 ≥17.0 for split systems) |
| Electrical panel upgrade | 30% of cost, up to $600 | 200 amp capacity, meets National Electric Code |
| Home energy audit | 30% of cost, up to $150 | Performed by a certified auditor |
Important: The credit is nonrefundable
You cannot receive more back than you owe in federal taxes, and unused credit cannot be carried forward to future tax years. The $3,200 annual cap applies across all 25C improvements claimed in the same tax year. Consult a tax professional to ensure you maximize what you can claim.
3 PECO Rebates — Available to All Customers
PECO administers rebates for qualifying HVAC equipment under Pennsylvania's Act 129 energy efficiency program. These are available to all residential PECO electric customers in the five-county Philadelphia area — Bucks, Chester, Delaware, Montgomery, and Philadelphia counties — regardless of income.
How PECO Rebates Work
PECO rebates are applied after installation by submitting a rebate application directly to PECO. You do not wait until tax season — but you must submit within 90 days of installation.
- Have your system installed by a HICRA-registered contractor
- Submit your rebate application at peco.com/ways-to-save within 90 days of purchase
- Include your proof of purchase, installation invoice, and the AHRI system certificate number for the matched system
- Allow 6–8 weeks for rebate processing
PECO Rebate Amounts — 2026
| Equipment Type | Rebate Amount | Key Requirements |
|---|---|---|
| Air-source heat pump (central ducted) | $200–$300 | ENERGY STAR certified; full matched system installed |
| Heat pump mini-split (ductless) | $200–$300 | ENERGY STAR certified; both outdoor and indoor units required |
| Central air conditioner | $100–$200 | ENERGY STAR certified; meets AHRI efficiency minimums |
| Smart thermostat | $50 | ENERGY STAR certified |
| Heat pump tune-up | $25 | Performed by a qualified HVAC professional |
Rebate amounts are tiered by the matched system's SEER2 and HSPF2 ratings as certified for the specific combination of outdoor unit, indoor coil, and air handler installed. Your contractor should pull the AHRI certificate for the exact system being installed to confirm the rebate tier.
Eligibility Rules
- Equipment must be new and replace an existing system — new construction does not qualify
- The full matched system must be installed (add-on coils alone do not qualify)
- An air source heat pump cannot be claimed as a central air conditioner, even with a gas backup
- Customers who have switched to an alternate electric supplier are still eligible
- Application must be received within 90 days of the purchase/installation date
4 York & Amana Manufacturer Rebates
About Manufacturer Rebates
York and Amana manufacturer rebates are seasonal promotions run through certified local dealers. Specific dollar amounts change quarterly and are not permanently published. Always confirm current offers with your installing contractor before making a purchase decision.
York
York (a Johnson Controls brand) offers promotions through its network of Certified Comfort Expert (CCE) dealers. Recent offer structures have included:
- $150–$480 in instant rebates on qualifying high-efficiency AC and heat pump models
- Extended warranty promotions — York's YORKCare Protection Plan offers 10 years parts/compressor and 5 years labor at no cost on qualifying purchases
- 0% interest financing for 18 months through the York Synchrony Project Card at participating contractors
York's current rebate center: york.com/residential-equipment/rebates-and-savings
Amana
Amana (a Daikin/Goodman brand) is known for its industry-leading warranty — including a Lifetime Unit Replacement warranty on qualifying registered products. Promotional structures have included:
- Seasonal instant rebates of $150–$400+ depending on efficiency tier and model
- The ALXT7C air conditioner achieves 17.2 SEER2 and the AZV7S heat pump delivers 16.2 SEER2 — both qualifying for enhanced PECO rebates
- The AMVM97 gas furnace achieves 98% AFUE, the highest efficiency tier available
Current Amana promotions: amana-hac.com/resources/amana-rebates-center
5 Maximizing Your Savings — What Can Stack
Here is a realistic picture of what a Greater Philadelphia homeowner can access in 2026. PECO rebates and manufacturer rebates can be combined.
Scenario A: Heat Pump Installation
| Incentive Source | Amount | Applied How |
|---|---|---|
| PECO Act 129 rebate | $200–$300 | Mail-in rebate after installation |
| York or Amana manufacturer rebate | $150–$480 | Instant discount on invoice |
| Total Potential Savings | Up to ~$780 | Combined |
Scenario B: Central AC Replacement
| Incentive Source | Amount | Applied How |
|---|---|---|
| PECO Act 129 rebate | $100–$200 | Mail-in rebate after installation |
| York or Amana manufacturer rebate | $150–$480 | Instant discount on invoice |
| Total Potential Savings | Up to ~$680 | Combined |
Context: What 2025 Buyers Had
Homeowners who installed in 2025 could additionally claim the federal tax credit — up to $2,000 for heat pumps and $600 for central AC — on top of PECO and manufacturer rebates. That window has now closed for new installations, making the decision to act sooner rather than later more meaningful going forward, as future restoration of those credits remains uncertain.
6 Understanding Efficiency Ratings
Efficiency ratings determine which incentive tiers your system qualifies for. Since 2023, the industry uses updated SEER2 and HSPF2 ratings that reflect more realistic operating conditions — these numbers are somewhat lower than the legacy SEER ratings you may have seen in the past.
| Rating | What It Measures | Minimum for Incentives | Recommended Target |
|---|---|---|---|
| SEER2 | Seasonal cooling efficiency (higher = better) | 15.2 for ENERGY STAR / PECO | 17.0+ for enhanced rebate tiers |
| HSPF2 | Heat pump heating efficiency (higher = better) | 7.8+ for heat pump programs | 9.5+ for top-tier systems |
| AFUE | Furnace efficiency (% of fuel converted to heat) | N/A for AC/heat pump programs | 95%+ if replacing a gas furnace |
Critical: Matched System Ratings
Efficiency ratings are assigned to the complete matched system — not to individual components. A high-efficiency outdoor unit paired with a mismatched coil or air handler may not achieve the rated efficiency. Always ask your contractor for the AHRI certificate for the specific combination of equipment being installed. This is your proof of the system's rated efficiency and is required for PECO rebate applications.
7 Heat Pump vs. Central AC — Which Makes Sense in Philadelphia?
Many homeowners in the Philadelphia area currently have a separate gas furnace and central air conditioner. If the AC needs replacing, it's worth understanding your options before you decide.
What a heat pump does differently
A heat pump provides both heating and cooling from a single system. In cooling mode it functions identically to a central AC. In heating mode it moves heat from outside air into your home rather than burning fuel — making it highly efficient down to moderate temperatures. Cold-climate heat pumps rated for operation at or below 5°F perform reliably through Philadelphia winters.
The incentive case for heat pumps in 2026
- PECO's rebate for heat pumps ($200–$300) is higher than for AC ($100–$200)
- Manufacturer rebates on heat pumps are generally equivalent or higher than AC rebates
- If Pennsylvania activates HEAR in the future, heat pumps will be the primary qualifying system
- If federal incentives are restored by Congress, heat pumps will again receive the larger credit ($2,000 vs. $600 for AC)
When straight AC replacement still makes sense
A simple AC replacement may be the right choice if your gas furnace is newer and efficient, if the upfront cost difference is a constraint, or if your home's duct configuration makes a full heat pump conversion complex. In those cases, a high-SEER2 AC system with manufacturer rebate support can still represent strong value.
8 Homeowner Action Checklist
If you installed a system in 2025:
- Locate your installation invoice, AHRI certificate, and system specs
- Confirm your system meets the CEE highest efficiency tier for its product category
- Obtain the Qualified Manufacturer Identification Number (QMID) from your installer
- File IRS Form 5695 with your 2025 federal tax return
- Verify your federal tax liability is sufficient to absorb the credit (up to $2,000 for heat pumps, $600 for AC)
If you are planning a new installation in 2026:
- Confirm you are in the PECO service territory (Bucks, Chester, Delaware, Montgomery, or Philadelphia County)
- Ask your contractor to quote systems meeting SEER2 ≥17.0 to maximize PECO rebate tiers
- Request the AHRI certificate for the matched system before purchase
- Confirm your contractor is HICRA-registered (required for PECO rebate eligibility)
- Ask your contractor about the current York or Amana manufacturer promotion and have it applied as an invoice discount
- Submit your PECO rebate at peco.com/smart-energy within 90 days of installation
- Keep all documentation: invoices, AHRI certificate, installation records, and rebate confirmation numbers
Have questions about your specific home?
Our team can walk you through which systems qualify and which rebates apply to your situation — at no charge.
9 Key Resources
AHRI Directory
Look up matched system efficiency certificates for your specific install
ahridirectory.org →Disclaimer: This guide is provided for informational purposes only and reflects program information as of March 2026. Rebate amounts, eligibility requirements, and program availability are subject to change without notice. Always verify current offers with your utility provider, installing contractor, and a qualified tax professional before making a purchase decision. This content does not constitute tax or financial advice.
