2025 HVAC Tax Incentives: What You Need to Know

Upgrading your heating, ventilation, and air conditioning (HVAC) system is an investment that pays off in comfort, energy savings, and now—generous 2025 tax credits.

Thanks to ongoing federal incentives, homeowners in Meridian, can offset the cost of installing high-efficiency HVAC equipment through valuable tax credits and rebates.

At Western Heating & Air Conditioning, we make the process simple. From helping you choose the right system to guiding you through local, state, and federal incentives, we’re your trusted partner for smart, energy-efficient HVAC upgrades.

2025 Federal Tax Credits for HVAC

The Inflation Reduction Act (IRA) continues to offer significant tax benefits in 2025 for homeowners who install high-efficiency HVAC systems and other energy-saving improvements.

Here’s a quick breakdown of what you can deduct on your federal return:

• Air conditioners, furnaces, and boilers: Up to $600
• Air-source heat pumps and heat pump water heaters: Up to $2,000
• Energy audits: Up to $150
• Electrical panel upgrades: Up to $600
• Insulation: Up to $1,200
• Windows and skylights: Up to $600
• Geothermal systems: 30% of the total cost

These credits apply to both equipment and installation costs, provided the products meet ENERGY STAR^® eligibility criteria. Visit ENERGY STAR^® for full requirements.

Not sure what qualifies? Our experts at Western Heating & Air Conditioning can help you choose a system that fits your home and qualifies for the full range of incentives.

What About Rebates?

In addition to tax credits, federal funding through the IRA is also supporting new rebate programs administered by individual states. While rollout timelines vary, many states are expected to launch their programs in 2025.

Two major rebate programs include:

Home Efficiency Rebates (HOMES) Program

The HOMES Program offers financial incentives for homeowners and multifamily property owners undertaking whole-house energy-saving retrofits. The program aims to reduce energy consumption by providing rebates based on the percentage of energy savings achieved through eligible upgrades.

Home Electrification and Appliances Rebate Program

The HEAR Program offers financial incentives to low- and moderate-income (LMI) households for adopting energy-efficient electric appliances and upgrades. The program aims to reduce energy costs and promote electrification in residential settings

2025 State and Local HVAC Incentives

Under the Idaho Residential Alternative Energy Tax Deduction, our state provides a tax deduction incentive for renewable energy systems such as solar, wind, geothermal, and certain types of biomass equipment.

When you install qualifying equipment, you can deduct 40% of the total cost in the first year, followed by 20% deductions annually over the next three years. The deduction is capped at $5,000 per year.

Many utility companies also offer rebates and incentives for HVAC upgrades. In many areas, manufacturers are offering seasonal promotions on select high-efficiency systems.

Our team at Western Heating & Air Conditioning will help you identify and apply for all available incentives—local, state, and federal—so you get the maximum return on your investment.

Ready to Save on a New HVAC System?

Let Western Heating & Air Conditioning guide you through the 2025 HVAC tax credits and rebates. We’ll help you find the most energy-efficient system for your Meridian, ID, home—without leaving money on the table.

Call us today at 208-319-1736 or request service online to schedule your free consultation!