The 25C Tax CreditEnded in 2025

Understanding the End of the 25C Credit

For several years, the federal government provided the 25C home-improvement tax credit to encourage homeowners to install high-efficiency heating and cooling equipment. This program allowed residents to claim a tax credit for a portion of the installation cost when they purchased qualifying heat pumps, central air conditioners and gas furnaces.

That federal program ended for equipment installed after December 31, 2025. If you replace your HVAC system in 2026 or later, the federal 25C tax credit is no longer available. Las Vegas homeowners planning an equipment upgrade must now look to local utility programs rather than federal tax filings to help offset the initial cost.

What Programs Are Available Now

With the federal tax credit gone, local utility incentives are the primary option. NV Energy supplies electricity to Southern Nevada and runs the PowerShift program. This initiative offers discounts on qualifying high-efficiency air conditioners and heat pumps.

NV Energy PowerShift discounts are applied through approved contractors. The discount depends on the equipment you choose. The Department of Energy requires new split central air conditioners in the Southwest region to meet a minimum of 14.3 SEER2. NV Energy decides which equipment qualifies.

The state of Nevada also planned the HOMES and HEAR rebate programs. However, as of October 2026, those programs have not launched. NV Energy PowerShift remains the active incentive for Las Vegas cooling equipment.

Replacing Your Aging System

Even without the federal tax credit, older equipment eventually requires replacement. Central air conditioners and gas furnaces commonly last about 15 to 20 years, while heat pumps typically last about 10 to 15 years, according to Carrier and ENERGY STAR.

ENERGY STAR suggests it may be time to consider replacement if your air conditioner or heat pump is older than 10 years, or if your furnace is older than 15 years. We never recommend replacement on age alone. Las Vegas summers keep outdoor units working hard. These units sit in direct sun and blowing monsoon dust. July brings an average high of 104.5 degrees, and the valley sees about 78 days a year reach 100 degrees, according to National Weather Service data from Harry Reid International Airport.

The Shift to New Refrigerants

The equipment available in 2026 also utilizes different technology than systems installed during the peak of the 25C credit. Since January 1, 2025, the EPA requires new residential air conditioners and heat pumps to be made for lower-impact refrigerants.

Manufacturers now build systems for A2L refrigerants, such as R-454B and R-32, replacing the older R-410A standard. Every technician who handles refrigerant must hold EPA Section 608 certification.

Sizing and Ductwork Considerations

When you purchase a new system, correct sizing is critical. A good estimate looks at the whole home before recommending a size. This includes the rooms, insulation, windows, sun exposure, how your family uses the house and the existing ductwork. Using square footage alone leads to improperly sized equipment.

The condition of your ducts directly impacts the performance of the new equipment. According to ENERGY STAR, in a typical house about 20 to 30 percent of the air moving through the ducts is lost to leaks, holes and poorly connected sections.

• Duct leaks force the new system to run longer to cool the house.
• Uneven temperatures between floors often point to ductwork or insulation issues.
• Indoor units in many Las Vegas homes sit in the attic, exposing the ductwork to extreme summer heat.

After the installation, the equipment still needs its seasonal checks. ENERGY STAR recommends checking the cooling cycle in spring and the heating cycle in fall. You should check the filter every month and change it at least every three months.

Planning Your Installation

Kestrel Heating & Air provides free, written in-home estimates on complete system replacements. We look at the whole home and provide two or three equipment options when multiple systems fit. We help you check which NV Energy PowerShift programs apply to the Carrier, Trane, Lennox or Mitsubishi Electric equipment you choose, and we give a written price before any replacement work begins.