Federal Heat Pump Tax Credits Status 2026

What happened to the federal heat pump tax credit?

The 25C credit that paid up to $2,000/year for heat pumps was repealed by the One Big Beautiful Bill Act in July 2025 and expired December 31, 2025. As of 2026, there is no federal tax credit for air-source heat pumps. State and utility rebates are now the only rebate path. Geothermal 25D (30%) remains active through 2032.

Is the 25C heat pump tax credit still available in 2026?

No. The 25C credit ($2,000/yr for heat pumps) was repealed by the One Big Beautiful Bill Act (OBBBA) signed July 2025 and expired December 31, 2025. 2026 heat pump installations receive $0 in federal 25C credit.

What about the 25D solar and battery credit?

Also dead — the 30% credit for solar and battery storage owned systems expired December 31, 2025 under OBBBA. Third-party-owned systems (solar leases, PPAs) can still access the commercial 48E ITC through 2032-2033, which is why the industry has pivoted hard to TPO.

Is geothermal still eligible for the 30% credit?

Yes. The 25D geothermal heat pump credit remains active at 30% through 2032. Geothermal is the only residential clean-energy technology with federal tax credit eligibility in 2026.