Save Big on AC Replacement in Houston

with 2025 HVAC Rebates and Federal Tax Credits

If you've been putting off upgrading your old air conditioner, 2025 is your year to act, especially if you live in the Houston and surrounding area. Thanks to a powerful combination of federal tax credits and local HVAC rebates, homeowners can save a few hundred to a few thousand dollars on qualifying AC installation or AC replacement projects.

Whether your current system is barely making it through the summer or you're simply tired of high energy bills, this is your opportunity to replace it with something smarter, more efficient, and more cost-effective in the long run. Federal tax credits expire December 31, 2025—so don't wait.

In this guide, we'll walk you through everything Houston-area homeowners need to know about:

  • The 25C Energy Efficient Home Improvement Tax Credit
  • CenterPoint Energy rebates for local utility customers
  • How to make sure your new system qualifies for maximum savings
  • Why now is the best time to consider AC replacement in Houston

What Is the 25C Tax Credit—and How Much Can You Get?

Thanks to the Inflation Reduction Act, the 25C Energy Efficient Home Improvement Tax Credit invites homeowners to claim up to $2,600 per year in tax credits when installing qualifying HVAC appliances.

Here's how it breaks down for AC and heat pump systems:

  • Up to $600 for a qualified central air conditioner
  • Up to $1,200 for a qualified AC system and furnace
  • Up to $2,000 for a qualified heat pump system, including mini split systems
  • Up to $2,600 for a qualified heat pump and qualified furnace (duel fuel or hybrid heating system)

The National Association of Home Builders reports that these federal energy credits, originally set to last for years, will expire at the end of 2025 due to the July passage of the One Big Beautiful Bill.

ProTip: Combine other qualified energy efficient upgrades, such as doors, windows, and water heaters for a combined maximum tax credit up to $3,200 according to the IRS.

How to Qualify Federal Tax Credits for a New AC System

To qualify for these tax credits, an AC, furnace, or heat pump must meet minimum efficiency standards via one of two performance-based pathways. A licensed HVAC professional can help you determine which air-sourced heat pumps, air conditioners and furnaces qualify for the 25C tax incentives.

After a system is chosen, your favorite AC installer should

  • Provide a copy of the AHRI certificate(s) that shows the matching system qualifies for the incentives along with a paid invoice.
  • Include the HVAC manufacturer's PIN number for each qualifying piece of equipment installed.
  • Install the equipment before the deadline of December 31, 2025.

Homeowners may consult with their tax advisor prior to filing taxes in 2026. They will need to

📌 Deadline: Qualified heating or cooling systems must be installed and paid in full by December 31, 2025 to claim the credit on your taxes.

What CenterPoint Energy Rebates Are There for Replacing AC Equipment?

If you're in Richmond, Katy, Sugar Land, Fulshear, or surrounding Houston, Texas area served by CenterPoint Energy, you may also qualify for local rebates for an AC replacement.

Depending on the system and SEER2 rating, you could save $200 to $1,000+ instantly on qualifying AC or heat pump systems. In addition, you could apply for rebates for other energy-efficient improvements like duct sealing and smart thermostats.

These rebates are applied at the time of installation through qualified HVAC distributors and local contractors like Terry's A/C & Heating. Don't let CenterPoint's small list of qualifying contractors limit your selection; many more AC businesses are able to fulfill the rebates through qualifying HVAC distributors. If you're unsure, just ask.

ProTip: These rebates can often be combined with the 25C tax credit for even more savings.

Why Replace Your AC System Now?

Replacing your AC system for a more energy efficient model can have certain benefits. Weighing the following factors can help you decide. If your system is:

  • More than 10 years old and past its manufacturer's warranty
  • Struggling to keep up during Houston's long summers
  • Starting to breakdown more frequently
  • Using R-22 refrigerant (now phased out)
  • Using R-410A refrigerant (in the process of phasing down)
  • Running up your utility bills

A new, high-efficiency AC system will likely pay for itself through energy savings, especially when combined with these limited-time tax credits and local rebates. When you add the 10-year manufacturer's warranty on top, it can be a smart move.

Good to Know: New AC equipment uses the latest, environmentally-friendly refrigerants: R-454b and R-32. Hopefully, we'll have this refrigerant for a while longer than the last one!

Ready for a Quote? Let's Talk!

Between the Federal Energy Efficient Home Improvement Credit tax credits and rebates from CenterPoint, Houston-area homeowners can stand to save on a new energy efficient AC system.  But the federal tax credit, unfortunately, ends December 31, 2025.

Our local, family-owned AC company, Terry's A/C & Heating, serves homeowners in Southwest Houston, including Richmond, Katy, Sugar Land, Fulshear, and surrounding areas, can prepare an AHRI-rated system quote to meet these federal and CenterPoint Energy Requirements.

Our team will:

✅ Recommend systems that qualify for maximum rebates and tax credits
✅ Handle the AHRI documentation and rebate paperwork
✅ Give you an honest, fair quote with no pressure

We also offer specials from time to time along with financing, so you can get the AC system you need and pay over time. For example, Synchrony, our most popular financing provider, offers 0% financing for 48 months with approved credit. Call or text us today at (281) 495-7830 to get the ball rolling.

Photo Credit: Canva.com / Natee Meepian