Screenshot 2025 10 14 115316

Last Chance: Up to $2,000 in Federal Tax Credits for Heat Pumps

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Screenshot 2025 10 14 115316

Last Chance: Up to $2,000 in Federal Tax Credits for Heat Pumps

NEWARK, Del. — Homeowners in Delaware and Maryland aiming to upgrade their heating and cooling systems should act fast — the federal tax credit of up to $2,000 for qualifying heat pumps expires December 31, 2025. Under the revised rules of the One Big Beautiful Bill Act (H.R. 1, 2025), the Energy Efficient Home Improvement Credit (Section 25C) no longer applies to systems placed in service in 2026 or later. DNREC

“We’re proud to help Delaware homeowners take advantage of these federal incentives before they disappear,” said Ben Boyce Sr., owner of Aire Serv Heating and Air. “Heat pumps have come a long way—they’re reliable, efficient, and environmentally responsible. This is the perfect time for families to upgrade, lower their monthly bills, and enjoy greater comfort year-round. At Aire Serv, our mission has always been to serve our neighbors with expertise, honesty, and care. We’re here to make sure no homeowner misses this opportunity.”

Why Heat Pumps Are a Smart Upgrade

Modern heat pumps—either as all-electric systems or in hybrid (dual-fuel) setups—are gaining popularity for good reason. They transfer heat rather than generate it, which often leads to efficiency ratings of 200–300%. In contrast, even the best gas furnaces lose energy through exhaust. The improved reliability, quieter operation, and reduced environmental impact make heat pumps a compelling option for many homeowners.

Tax Incentives: What You Need to Know

The federal 25C credit covers 30% of qualifying project cost, capped at $2,000 for heat pump installations placed in service by Dec. 31, 2025. DNREC

These federal incentives have driven a rush in the HVAC industry, as contractors and suppliers work to fulfill demand before the deadline.

Local Incentives: Delaware Gets Support from Energize Delaware

In Delaware, homeowners can stack federal incentives with local rebates through Energize Delaware and Home Performance with ENERGY STAR programs. energizedelaware.org Some highlights:

  • Heat pump rebates range from about $1,000 to $2,500, depending on system tier and efficiency. energizedelaware.org
  • Mini-split heat pumps also qualify, with rebates between $550 and $1,700. energizedelaware.org
  • Heat pump water heater rebates between $1,100 and $1,350 are available. energizedelaware.org
  • Bonus incentives exist for bundling air sealing or insulation work with HVAC upgrades. energizedelaware.org
  • Rebates and incentives are generally capped, often at 50% of installed cost, or the specified incentive level, whichever is lower. energizedelaware.org

Before installation, a home energy audit (assessment) by an approved contractor is required. energizedelaware.org

Delaware’s state program, once fully launched, will also offer Home Electrification & Appliance Rebates (HEAR) and Home Efficiency Rebates (HER) using Inflation Reduction Act funds. These could provide rebates of $500 to $8,000 (depending on income, home type, and efficiency improvements) for heat pumps and related upgrades. DNREC

Recommendation: Act Sooner Rather Than Later

With the December 31, 2025, cut-off looming, homeowners who want to benefit from these combined incentives should:

  • Schedule a home energy assessment early (required by multiple programs).
  • Confirm your contractor is registered with Energize Delaware and familiar with IRA rebate guidelines.
  • Reserve local rebates before installation, as programs may cap funding.
  • Proceed with installation in 2025, ensuring the system is placed in service before year’s end.
  • Keep documentation: invoices, efficiency ratings, model numbers, contractor reports, and permit approvals.
  • Consult a tax professional to confirm your eligibility for the 25C credit.

Call to Action: Contact Aire Serv today at 302-330-8409 to arrange your assessment and navigate the rebate and tax credit processes.

Disclaimer: Up to $2,000 in federal tax credits may apply for qualifying heat pump systems
placed in service by December 31, 2025. Local rebates from Energize Delaware are subject to
program rules, income tiers, and funding availability. Always verify eligibility with the contractor
and tax advisor.

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