California continues to lead the way in energy efficiency with a robust selection of rebates and tax incentives aimed at encouraging homeowners and businesses to upgrade their HVAC systems. In this 2025 edition, we break down the programs available, how to qualify, and how much you can save.

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TLDR Quick Guide

• 2025 rebates include both federal and state-level incentives for HVAC upgrades.
  
• The Inflation Reduction Act continues to support HVAC tax credits up to $2,000.
  
• California’s TECH Clean California and utility-specific rebates offer up to $6,000 or more for heat pumps and high-efficiency systems.
  
• You must work with a licensed contractor and choose qualifying ENERGY STAR® certified equipment.
  
• Stackable incentives may be available when combining local, utility, and federal programs.

Overview of HVAC Rebates in 2025

California homeowners can access multiple layers of savings when upgrading to energy-efficient HVAC systems. These programs are designed to lower energy bills, reduce carbon emissions, and make eco-friendly technology more accessible.

Types of Incentives Available

• Federal Tax Credits
  The Energy Efficient Home Improvement Credit provides up to $2,000 in tax credits for qualifying HVAC systems, including heat pumps and air conditioners.
  
• Statewide Rebates via TECH Clean California
  Offers up to $6,000 for heat pump HVAC system installations. Incentives vary by location and income level.
  
• Utility-Based Rebates
  Local utility providers like Southern California Edison (SCE), Pacific Gas & Electric (PG&E), and SoCalGas provide HVAC rebates for ENERGY STAR® systems, smart thermostats, and insulation upgrades.
  
• Local Government Incentives
  Cities like Los Angeles or San Francisco may offer additional programs, including green building or electrification rebates.
  

Federal Tax Credits Under the Inflation Reduction Act

The Inflation Reduction Act extends and expands tax credits for energy-efficient HVAC improvements through 2032.

Key Details

• Up to $2,000 in credits for heat pumps and advanced air conditioning systems.
  
• Equipment must meet CEE highest tier efficiency requirements.
  
• Credits are non-refundable and must be claimed on your federal tax return.
  

How to Claim

• Keep invoices and product certifications from your contractor.
  
• File IRS Form 5695 with your tax return.
  

California’s TECH Clean California Program

TECH Clean California is a statewide program designed to accelerate the adoption of clean heating technology.

Eligibility and Benefits

• Rebates up to $6,000 per household.
  
• Focused on heat pump HVAC systems and heat pump water heaters.
  
• Extra incentives available for income-qualified households.
  

Enrollment Process

• Select a TECH-registered contractor.
  
• Receive instant discounts on qualifying equipment at time of purchase or installation.
  

Utility Company Rebates

Each utility has its own rebate programs that may be combined with state and federal offers.

Common HVAC Rebates Offered

• Heat Pump or AC Installation: Up to $1,500
  
• Smart Thermostats: $50 to $200
  
• Duct Sealing or Insulation Upgrades: $500 to $1,000
  

Utility Providers Offering Rebates

• Southern California Edison (SCE)
  
• Pacific Gas & Electric (PG&E)
  
• SoCalGas
  
• LADWP (Los Angeles Department of Water and Power)
  

Choosing Qualifying Equipment

To be eligible for most rebates and tax credits, the installed HVAC system must meet certain efficiency standards.

Equipment Must Be:

• ENERGY STAR® certified
  
• AHRI-rated and compliant with SEER2 and HSPF2 guidelines
  
• Installed by a licensed and registered contractor
  

Application & Documentation Tips

• Start by checking all available rebate programs based on your zip code.
  
• Keep documentation of all purchases and installations.
  
• Work with your HVAC contractor to complete and submit required forms.
  
• Monitor rebate timelines—some programs operate on a first-come, first-served basis.

Key Takeaways

• California offers some of the most generous HVAC rebates in the U.S.
  
• You can save up to $6,000 or more through combined state, utility, and federal incentives.
  
• Rebates apply primarily to high-efficiency heat pumps and smart HVAC systems.
  
• Equipment must meet strict efficiency and certification standards.
  
• Partnering with a licensed contractor is essential to claim all eligible savings.

FAQs