Last reviewed: September 2026 · By the HVAC Brief Editorial Team · Our sourcing and editorial standards
HVAC financing became a bigger part of the decision after the federal 25C tax credit expired for anything placed in service after December 31, 2025, removing up to $2,000 from a qualifying heat pump job.
Equipment producer prices are also up 60% since 2019. A larger bill with no federal credit against it is why payment structure now comes up earlier in the conversation than it used to.
We do not compare lenders or rate offers. What follows is what to establish before signing, and which numbers are documented.
What changed on the incentive side
| Factor | 2025 | 2026 |
|---|---|---|
| Federal 25C credit, qualifying heat pump | Up to $2,000 | $0 |
| What controls eligibility | Placed in service by Dec 31, 2025 | Not available |
| State and utility rebates | Unaffected | Unaffected |
| Equipment producer prices vs 2019 | Up 60%, July 2026 the series high | |
Details of the credit expiry are in what the 25C change costs, and the price trend in our price index analysis.
What to establish before signing
- The total amount repayable, not the monthly figure. Two offers with the same monthly payment over different terms are not the same offer.
- The annual percentage rate, and whether any promotional rate expires into a higher one.
- Whether deferred interest applies. Some promotional structures charge interest retrospectively from day one if the balance is not cleared within the promotional window.
- Any dealer fee built into the price. A financed price and a cash price are sometimes different numbers for the same job.
- Whether the obligation attaches to you or the property. Some programmes secure the debt against the home, which affects sale and refinancing.
- Early repayment terms, including whether paying early reduces total interest.
State and utility rebate programmes were not affected by the federal credit expiring, and they vary by utility rather than by state, so a neighbouring town can have a materially different offer. Establishing what is available reduces the amount financed, which changes every other number in the deal. Confirm with the specific utility rather than assuming.
Frequently asked questions
Is there still a tax credit for HVAC in 2026?
Not federally. The Section 25C Energy Efficient Home Improvement Credit applied to property placed in service before December 31, 2025, and installation date controls rather than purchase date. State and utility rebate programmes are separate and were unaffected by that expiry.
What should I check in an HVAC financing offer?
The total amount repayable rather than the monthly payment, the annual percentage rate and whether a promotional rate expires, whether deferred interest applies retrospectively, any dealer fee built into the financed price, whether the obligation attaches to the property, and early repayment terms.
What is deferred interest?
A promotional structure where interest accrues from the start but is only charged if the balance is not cleared within the promotional period. Clearing it in time costs nothing; missing the window by a small amount can trigger interest calculated back to day one on the original balance.
Why did HVAC costs rise so much?
Equipment producer prices are up about 60% since 2019, roughly twice general consumer inflation, with August 2026 the highest reading in the BLS series. The federal 25C credit worth up to $2,000 also expired for installations after December 31, 2025.
Methodology and limitations
Credit terms are from the IRS. Equipment price movement is BLS series PCU333415333415 indexed to its 2019 annual average.
- We name no lenders and compare no rate offers.
- Nothing here is financial advice. Terms vary by provider, product and jurisdiction, and consumer credit rules differ by state.
- We publish no installed costs, as no federal series measures them.
Sources
- Internal Revenue Service, Energy Efficient Home Improvement Credit.
- US Bureau of Labor Statistics, Producer Price Index series PCU333415333415.
The HVAC Brief is an independent trade publication. We do not sell equipment, take manufacturer advertising, or accept payment for placement in our research. Corrections welcome.
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