Heat Pump Tax Credit Deadline - What You Need to Know
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Time Is Running Out: Don’t Miss the 25C and 25D Heat Pump Tax Credits
If you've been considering upgrading to a heat pump, now is the time to act. The federal Energy Efficient Home Improvement Credit (IRS Section 25C) currently allows homeowners to claim 30% of the cost—up to $2,000—for qualifying heat pump installations. But that opportunity is disappearing soon.
Recent legislation passed by Congress is poised to repeal Section 25C (and its counterpart, Section 25D) for projects that begin after December 31, 2025 (achrnews.com). That means heat pump upgrades must be underway before the new year to secure this valuable incentive.
What Is Section 25C — and Why It Matters
- 30% credit up to $2,000: You can claim 30% of your total project costs (equipment, installation, labor), but the total credit for heat pumps tops out at $2,000 per year .
- Broad eligibility: Applies to homeowners (not investors) installing qualifying heat pumps in their primary residence in the U.S. (levin.house.gov).
Harvest Thermal: A Heat Pump that Qualifies for 25D
Most heat pumps fall under 25C. But Harvest Thermal (harvest-thermal.com) offers something different: a thermal battery solution that qualifies under Section 25D—not 25C.
- Uncapped 30% credit: While 25C caps at $2,000, 25D allows an uncapped 30% credit, meaning you could qualify for credit on the full system cost—no limits (sfchronicle.com).
- Geothermal-grade performance: Harvest Thermal’s system mimics geothermal-style thermal storage and efficiency—without the hefty drilling costs.
- Greater ROI: The combination of a larger credit and superior efficiency makes the investment far more attractive, especially as other credits vanish.
Comparing Section 25C vs. Section 25D
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Why You Should Install Now
- Lock in 30% savings - uncapped with 25D
Installing by year’s end means reducing your out-of-pocket expense by that amount—immediately impactful savings on a $6K–$10K project. - Future-proof energy bills
Heat pumps are significantly more efficient than gas furnaces or traditional heat sources, offering energy bill savings and reduced carbon emissions. - Beat the rush
As deadlines loom, HVAC professionals are likely to see increased demand—leading to price hikes and longer wait times. Book early to avoid delays.
Stack projects to maximize savings.
If you’re planning to do other energy-related projects for your home (insulation, duct work, electrical panel upgrades), including them in your Harvest quote would unlock additional savings, as the 30% uncapped tax credit applies to the line items on the contractor quote.
The Big Shift: Expiring Credits & New Restrictions
Per the Senate and House versions of the reconciliation bill, Sections 25C and 25D are on the chopping block, set to disappear for new projects after Dec 31, 2025 (achrnews.com). You also lose out on the uncapped 30% credit for geothermal heat pumps under Section 25D. Even earlier phase-outs are being talked about for other efficiency and clean tech programs (sfchronicle.com).
This isn’t speculation—it’s in motion now.
Why This Matters: A Critical Moment in Clean Energy
- Economic risks: Removing these credits could raise energy costs—possibly by as much as 11% in places like California—and stall clean tech growth (sfchronicle.com, taxlawcenter.org).
- Industry warnings: HVAC and clean tech associations stress that losing Section 25C/D could reverse decades of progress (homepros.news).
- Historical precedent: When geothermal was dropped from Section 25D back in 2017, heat pump sales plunged 50% (canarymedia.com).
That hard-earned momentum in home electrification could unravel—unless homeowners act now.
Bottom Line: Act Before It’s Too Late
- If you’ve been postponing a heat pump upgrade, do it before Dec 31, 2025 to claim 30% credit (max $2,000).
- Considering a Harvest Thermal solution? You'll likely fall under 25D, unlocking an uncapped 30% credit that can much more deeply reduce your outlay.
- Installation windows and contractor availability will shrink as deadlines near—so start the process now.
Steps to Take Today:
- ✅ Contact HVAC pros and request estimates featuring eligibility under 25C or 25D.
- ✅ Be sure your installer documents system specs and issues receipts for IRS Form 5695.
- ✅ Plan the install timeline to ensure placement before year-end.
Final Thoughts
With the impending repeal of 25C and 25D, the clock is ticking. By upgrading your home’s heating system now, you capture valuable incentives, improve efficiency, and future-proof your home. And with Harvest Thermal offering an innovative path under the uncapped 25D credit, there's even more upside.
Ready to claim your credit? Visit harvest‑thermal.com, get a consultation, and lock in federal savings before they vanish.
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