Philadelphia HVAC Rebates & Tax Credits
A plain-English guide to PECO Smart Ideas rebates, PGW EnergySense incentives, Pennsylvania's Home Energy Rebate programs, and federal Inflation Reduction Act (IRA) tax credits — so Philadelphia homeowners can upgrade heating and cooling for meaningfully less out of pocket.
Program amounts and eligibility change year to year. This guide reflects the most common current-year rules — we always verify what's live when we build your quote.
PECO & PGW programs
Utility rebates come off the top and don't depend on your tax situation. If you're a PECO or PGW customer in the Philadelphia service area, these are the first dollars to chase.
PECO Smart Ideas — Heat Pumps
PECO's residential Smart Ideas program offers rebates on qualifying electric air-source and ductless heat pumps installed by a participating contractor. Amounts vary by equipment efficiency (HSPF2 / SEER2) and heating capacity.
PECO Smart Ideas — Central AC
Rebates on high-efficiency central air conditioners meeting minimum SEER2 thresholds. Bonus rebates typically apply when paired with a smart thermostat and proper duct sealing.
PECO Smart Ideas — Smart Thermostats
A flat rebate is available on ENERGY STAR certified smart thermostats. Simple qualifier — commonly stacked with equipment rebates during a system upgrade.
PGW EnergySense (Gas)
Philadelphia Gas Works customers can qualify for rebates on high-efficiency gas furnaces, boilers and combi units meeting minimum AFUE ratings, plus incentives for smart thermostats on gas heating systems.
Pennsylvania & Inflation Reduction Act
These stack with PECO / PGW rebates in most cases. The federal 25C tax credit alone can put up to $2,000 back in your pocket for a qualifying heat pump — every year you install one.
PA Home Energy Rebate Programs (HEEHRA / HOMES)
Pennsylvania is rolling out the federal Home Energy Rebate programs funded by the Inflation Reduction Act. Income-qualified households can receive point-of-sale rebates on heat pumps, heat pump water heaters, electrical panel upgrades and insulation. Program timing and portal availability are managed by the PA DEP — we'll confirm current status when we quote.
Federal 25C — Energy Efficient Home Improvement Credit
A federal tax credit worth 30% of the project cost, up to annual caps: $2,000 for qualifying heat pumps and heat pump water heaters; $600 for qualifying central AC, gas furnaces or boilers; $150 for a home energy audit. Caps reset each tax year, so staging projects across two years can capture more credit.
Federal 25D — Residential Clean Energy Credit
30% tax credit on geothermal heat pumps (and solar, battery storage). No annual cap and no income limit. Applies to equipment placed in service through the current program window — verify eligibility with your tax preparer before purchase.
Equipment that typically earns incentives
Every program has minimum efficiency ratings. When we quote a system, we call out which units qualify for which rebate so nothing is left on the table.
How to actually get the money
Most homeowners who miss a rebate miss it on the paperwork, not the equipment. Here's the sequence we walk customers through.
Confirm eligibility before install
AHRI-matched model numbers and efficiency ratings must appear on the invoice for both utility rebates and the federal 25C credit. We'll pull the exact spec sheet during your estimate.
Save the paperwork
Keep the manufacturer certification statement, the AHRI certificate, and the paid invoice. Utility rebate portals ask for these; the IRS asks for them if 25C gets audited.
File the rebate promptly
Most PECO and PGW rebates have a 90-day submission window after installation. Miss it and the rebate is gone — even if the equipment qualifies.
Claim the tax credit next April
IRS Form 5695 covers 25C and 25D. Your tax preparer needs the total project cost, the equipment type, and the manufacturer's certification.
Frequently asked questions
Get a quote that spells out every rebate you qualify for.
We'll size the system, confirm AHRI-matched model numbers, and list every PECO / PGW rebate and federal credit your project earns — all on the written estimate.