25C Heat Pump and HVAC Tax Credits Ended in 2025: What NH Homeowners Can Do Now

The federal 25C Energy Efficient Home Improvement Credit for heat pumps, high-efficiency HVAC equipment, and qualifying weatherization expired on December 31, 2025. Equipment installed and placed in service before that date could claim the credit on 2025 federal taxes. Equipment installed after that date is not eligible. For New Hampshire homeowners who missed the 25C deadline, several incentives remain available, including utility rebates through NHSaves, manufacturer promotions, and financing options.

Here is what the 25C ending actually means in practice and where the remaining incentives are.

What the 25C credit covered

While it was active, the 25C credit allowed homeowners to claim 30 percent of qualifying project costs on their federal taxes, capped per equipment type:

• Heat pumps and heat pump water heaters: up to $2,000 per year
• High-efficiency furnaces, boilers, and central AC: up to $600 per year per item
• Insulation, air sealing, doors, and windows: combined cap of $1,200 per year
• Home energy audits: up to $150

The credit had to be claimed in the year the equipment was placed in service. Carryover to future tax years was not allowed.

What happened at the end of 2025

The credit, expanded by the Inflation Reduction Act of 2022 and originally scheduled to run through 2032, was terminated early by the federal budget law passed in July 2025, with a final eligibility date of December 31, 2025. Equipment installed on or before December 31, 2025 was eligible; equipment installed January 1, 2026 or later is not eligible under the 25C provision.

The same legislation also ended the 25D Residential Clean Energy Credit, the 30 percent federal credit that covered solar photovoltaic systems, solar water heating, battery storage, and small wind energy systems. Property placed in service after December 31, 2025 does not qualify for 25D. Neither federal credit is available for new installations in 2026.

Federal energy efficiency policy continues to evolve. Congress periodically revisits residential energy incentive programs, and new credits may emerge over the coming years. For the most current federal incentive status, the IRS website and Energy Star website both publish updated guidance.

Incentives still available for NH homeowners

NHSaves utility rebates

NHSaves continues to offer substantial incentives for energy efficiency improvements in NH homes:

• Heat pump installations: rebates that vary by equipment efficiency, household income, and program path
• Heat pump water heaters: rebates available for qualifying units
• Weatherization (air sealing, insulation): rebates and low-interest financing through the Home Energy Performance program
• Income-eligible enhanced incentives: qualifying households may receive significantly higher support
• Home energy assessments: typically heavily subsidized

The NHSaves Home Energy Performance program offers incentives up to $6,000 and low or no-interest loans up to $15,000 for qualifying projects. Income-eligible programs can cover an even higher percentage of project costs.

Manufacturer rebates

Several HVAC manufacturers (Bosch, Mitsubishi, Daikin, and others) periodically offer their own promotional rebates on qualifying equipment. These vary by season and brand; our team tracks current offers as part of the consultation.

Utility time-of-use rates

Some NH utilities offer EV time-of-use rates that also benefit homes with heat pumps and electric water heaters. Shifting heating and water heating load to off-peak hours can meaningfully reduce annual electricity costs.

What to do if you were planning to use the 25C credit

If you had planned a heat pump or HVAC upgrade with the 25C credit in mind and missed the December 31, 2025 deadline:

1. The project still likely pencils out on operating cost alone, especially for conversions from oil or propane to a heat pump.
2. NHSaves rebates remain a substantial offset on the upfront cost, often covering several thousand dollars on qualifying installations, and low-interest financing can spread the remainder.
3. Check whether new federal incentives have been enacted since this post was written. Energy policy moves; verify current status with your tax advisor or our team.
4. Income-eligible NHSaves programs may cover a larger portion of the project than 25C would have.

The bigger picture

Even without 25C, the long-term economics of high-efficiency heating in NH continue to favor heat pumps and well-insulated, well-sealed homes. Fuel prices for oil and propane have remained volatile; electricity rates are more stable; cold-climate heat pump performance continues to improve. The 25C credit was an accelerant, not the entire reason these upgrades make sense.

Schedule a consultation

If you are evaluating a heat pump, HVAC upgrade, or weatherization project for your NH home, contact A.J. LeBlanc Heating. We will walk through current available incentives, financing options, the right equipment for your home, and a realistic timeline. Serving New Hampshire families since 1928.

Frequently Asked Questions

Is the 25C tax credit gone?

Yes. The 25C Energy Efficient Home Improvement Credit expired on December 31, 2025. Equipment installed and placed in service after that date is not eligible.

What incentives are still available for heat pump installations in NH?

NHSaves utility rebates remain available and substantial. Income-eligible households may qualify for significantly higher incentives. Manufacturer rebates from brands like Bosch and Mitsubishi periodically apply. Low or no-interest financing is also available through the NHSaves Home Energy Performance program for qualifying projects.

Will the 25C credit come back?

Congress periodically revisits residential energy incentive programs. New federal credits may emerge in the future, but there is no guarantee. Confirm current status with your tax advisor or our team before purchase.

Is the 25D credit also gone?

Yes. The federal 25D Residential Clean Energy Credit (covering solar PV, solar water heating, battery storage, and other qualifying clean-energy systems) was terminated by the same 2025 federal legislation and does not apply to property placed in service after December 31, 2025. Air-source heat pumps were covered under 25C, not 25D.

Does it still make sense to install a heat pump in NH without 25C?

For most NH homes converting from oil or propane: yes. The operating cost savings, NHSaves rebates, and added summer cooling typically still justify the investment. The 25C credit was a meaningful accelerant; its expiration does not change the fundamental economics for most homes.