California HVAC Rebates What's Available in 2026

Federal and California incentives for HVAC upgrades are real and stacking correctly makes them substantial. A Nevada County homeowner replacing a gas furnace with a qualifying heat pump system can access between $2,000 and $5,000 in combined credits and rebates in 2026 — more for moderate-income households. The programs are not simple, and the qualifying equipment rules change. Here is the current picture as of 2026, applied specifically to Nevada County homeowners.

At a glance

The federal 25C tax credit — the one most homeowners miss

The Inflation Reduction Act (IRA) created a revised Section 25C credit that runs through 2032. It covers 30% of qualifying HVAC equipment cost, up to $2,000 per year for heat pumps and $600 for high-efficiency furnaces or AC. The credit resets annually — if you install a heat pump this year and a heat pump water heater next year, you can claim up to $2,000 each year. The 25C credit applies to equipment cost only, not labor, and requires the installed system to meet specific efficiency thresholds: SEER2 ≥ 15.2, EER2 ≥ 10, HSPF2 ≥ 7.8 for ducted heat pumps. Not every brand or model qualifies — the AHRI directory lists qualifying equipment. We specify qualifying equipment by default on all heat pump quotes; if a system we quote does not qualify, we will tell you.

TECH Clean California

TECH Clean California is a California Energy Commission program designed to accelerate heat pump adoption. Unlike the federal credit, TECH is a point-of-sale discount processed through the contractor — you do not file for it; we apply it directly to your invoice. The income qualification is based on household income relative to Area Median Income (AMI) for Nevada County. Moderate-income households (80-150% AMI) receive up to $3,000 for a qualifying heat pump installation. The program also covers duct sealing when done alongside a heat pump install. As of 2026, TECH funding is active in Nevada County. Available funding levels can change — we confirm current program status during the estimate.

PG&E rebates for heat pumps

PG&E offers rebates for qualifying heat pump installations in its service territory, which includes most of Nevada County (areas served by PG&E for electricity). The rebate amount depends on the system type and efficiency rating. For ducted heat pumps meeting the HSPF2 threshold, the current rebate runs up to $800. Ductless mini-split systems are also eligible. The rebate is processed after installation — we submit the paperwork as part of the job. Note: Truckee is served by Truckee Donner Public Utility District (TDPUD), not PG&E, so PG&E rebates do not apply there. TDPUD has its own incentive programs for electric equipment upgrades.

Stacking incentives correctly

The 25C federal credit and TECH Clean California rebate can be combined — they are from different sources and there is no offset rule between them. The PG&E rebate also stacks. A qualifying moderate-income household installing a ducted heat pump in 2026 could realistically combine: $2,000 federal 25C credit, $3,000 TECH rebate, and $800 PG&E rebate — totaling $5,800 in incentives against a typical $10,000-$13,000 heat pump install. HEEHRA (High-Efficiency Electric Home Rebate Act) covers low-income households (under 80% AMI) with up to $8,000 toward heat pumps; implementation has varied by state — we can check current California program status at time of quote.

How the application process works with Brewer

We handle rebate paperwork as part of every qualifying installation. You do not need to track down forms or submission portals. For the 25C federal tax credit, we provide a signed manufacturer's certification statement that your tax preparer attaches to Form 5695 — you claim the credit when you file taxes. TECH and PG&E rebates are processed post-installation via contractor submission; you receive a check or account credit directly. We require the same qualifying information (income verification for TECH, utility account for PG&E) before the install so there are no surprises. If the program has closed or funding is exhausted when we check, we tell you upfront — we do not quote incentives we cannot confirm.

A worked example: what the incentives look like on a real install

To make the stacking concrete, here is a representative Nevada County heat pump replacement (numbers are illustrative — your exact figures depend on equipment, income, and current program funding). On a qualifying ducted heat pump system, the federal 25C tax credit returns up to $2,000 at tax time. A TECH Clean California rebate can add a four-figure incentive on top, processed after install. PG&E heat pump rebates stack again where the home is in PG&E territory. On a typical project these can combine to meaningfully reduce net cost — but the key word is qualifying: the equipment has to hit the efficiency thresholds, the paperwork has to be filed correctly, and the programs have to be funded at the time of install. We model the realistic combined number for your specific project during the quote rather than quoting best-case figures you might not actually receive.

Income-qualified programs and what changes for them

Several California incentive programs offer higher rebate amounts for income-qualified households. TECH Clean California and related equity programs tier their rebates by household income relative to area median income for Nevada County. If your household qualifies, the rebate can be substantially larger — sometimes covering a large share of the equipment cost. Qualification requires income documentation submitted before the install, not after, so it is worth raising at the quote stage. We are familiar with which programs have an income-qualified track and what documentation each requires, and we will tell you honestly whether the higher tier is worth the paperwork for your situation. If a program is oversubscribed or its funding window has closed, we say so rather than letting you count on money that is not there.

Related: heat pump installation, heat pumps at altitude, furnace installation.