Maryland HVAC Rebates and Incentives: What Is Available in 2026
If you are replacing an air conditioner, heat pump, or furnace in the Frederick area, two funding streams are worth understanding: EmPOWER Maryland utility rebates through BGE and Potomac Edison, and the federal 25C energy efficiency tax credit. The programs are not identical — one is active, one expired.
The federal 25C credit expired December 31, 2025 under the One Big Beautiful Bill Act signed July 4, 2025. EmPOWER Maryland utility programs are currently active. This guide covers what is in place now, how to qualify, and what to ask your installer.
EmPOWER Maryland: active
Utility rebate programs through BGE and Potomac Edison are currently available for qualifying heat pump, air conditioner, and furnace installations. Income-qualified households may access enhanced amounts.
Federal 25C: expired
The federal energy efficiency tax credit (25C) expired December 31, 2025. It is not available for equipment installed in 2026 unless Congress reinstates it.
Verify before you sign
Program amounts and eligible equipment lists change annually. Get the specific rebate amount confirmed in writing before signing an installation contract — do not rely on estimates from last year.
EmPOWER Maryland: the active program
EmPOWER Maryland is a state-mandated energy efficiency program funded by a surcharge on utility bills. BGE (Baltimore Gas and Electric) and Potomac Edison administer separate but parallel programs for their respective service territories. Frederick County residents are served by one or the other depending on their address.
Rebates are available for qualifying heat pump installations, central air conditioner replacements, and in some cases furnace or boiler upgrades. Equipment must meet minimum efficiency thresholds — typically SEER2 and HSPF2 ratings for heat pumps — to qualify. Income-qualified households generally access higher rebate tiers.
The program runs on annual cycles with amounts set by utility rate cases and state energy goals. Amounts change from year to year, and specific qualifying equipment lists are updated. For current amounts, go directly to your utility's EmPOWER program page or ask a participating contractor to confirm the rebate for the specific equipment model before you commit. Do not rely on amounts quoted from articles published before January of the current year.
- BGE and Potomac Edison both operate EmPOWER Maryland programs in Frederick County.
- Check your utility bill or call your utility to confirm which utility serves your address.
- Qualifying equipment must meet minimum efficiency thresholds — your installer should verify.
- Income-qualified households may qualify for enhanced rebate amounts.
- Rebates are typically applied as a credit through your utility, not a tax filing.
- Verify current amounts at your utility's EmPOWER program page before signing a contract.
Heat pump rebates: the higher incentive tier
Heat pumps — both central ducted and ductless mini-split systems — typically qualify for higher rebate amounts than conventional air conditioners under EmPOWER Maryland. This reflects the state's electrification goals. Cold-climate heat pumps, which maintain efficiency at lower outdoor temperatures, may qualify for additional amounts above the standard heat pump tier.
BGE and Potomac Edison program structures differ in their specific amounts and equipment qualification thresholds. Ask your installer for the current rebate amount for the specific heat pump model and your utility before finalizing your equipment selection.
The HEEHRA program (High-Efficiency Electric Home Rebate Act from the Inflation Reduction Act) was funded under IRA but had not launched in Maryland as of mid-2026. If it becomes available during the life of this content, the state energy administration (MEA) website is the authoritative source.
- Heat pump rebates are generally higher than central AC rebates under EmPOWER.
- Cold-climate heat pumps may qualify for additional incentive amounts.
- Ask your installer for the rebate specific to the model and your utility — do not estimate.
- HEEHRA (federal IRA heat pump rebate): not yet launched in Maryland as of June 2026.
The federal 25C credit: what it was and why it expired
The Section 25C Energy Efficient Home Improvement Credit was expanded under the Inflation Reduction Act of 2022 to provide a tax credit of up to 30% of qualifying HVAC installation costs, with annual caps per equipment category. It covered qualifying heat pumps, central air conditioners, furnaces, and heat pump water heaters.
The credit was available for equipment installed through December 31, 2025. Under the One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025), the credit was not extended and expired with the 2025 tax year. Equipment installed on or after January 1, 2026 does not qualify for the 25C credit under current law.
If you installed qualifying equipment in 2025, you should consult a tax professional about claiming the 25C credit on your 2025 federal return. For equipment installed in 2026, do not rely on the 25C credit as part of your financing calculation.
- 25C credit: covered up to 30% of qualifying equipment cost, with annual caps per category.
- Expired: December 31, 2025 under One Big Beautiful Bill Act (PL 119-21).
- 2025 installs: consult a tax professional about claiming on your 2025 federal return.
- 2026 installs: the credit is not available under current law.
- If Congress reinstates any federal credit, this page will be updated.
How to get your rebate: the practical process
Most EmPOWER Maryland rebates are processed through the participating contractor at the time of installation — the rebate is applied as a discount on the project cost, and the contractor submits the paperwork to the utility. Ask your installer whether they are a participating contractor and how the rebate will appear on your invoice.
Some rebate paths require homeowner application through the utility's online portal after installation. If that is the case for your utility and program type, the installer should tell you what documentation you will need — typically the invoice, equipment model number, and a before/after description of the replaced equipment.
Key question to ask every contractor before signing: 'Are you a participating EmPOWER Maryland contractor for my utility, and what is the current rebate for this specific equipment?' A contractor who cannot give you a direct answer on this should prompt you to verify with your utility directly.
- Ask your installer: are you a participating EmPOWER Maryland contractor?
- Ask: what is the current rebate amount for this specific model and my utility?
- Ask: how will the rebate appear — as a discount on my invoice, or do I apply separately?
- Save your invoice and all equipment documentation in case a utility audit is required.
- Income-qualified program enrollment: may require documentation of household income.
Questions homeowners ask next
Can I still claim the federal 25C tax credit for a 2026 HVAC installation?
No. The Section 25C energy efficiency tax credit expired December 31, 2025 under the One Big Beautiful Bill Act (PL 119-21, signed July 4, 2025). Equipment installed on or after January 1, 2026 does not qualify under current law. If you installed qualifying equipment in 2025, consult a tax professional about your 2025 return.
How do I know if I qualify for EmPOWER Maryland rebates?
You need to be in the service territory of a participating utility (BGE or Potomac Edison in the Frederick area), install qualifying equipment meeting the current efficiency thresholds, and use a participating contractor. Income-qualified households may access enhanced rebate amounts. Contact your utility or ask a participating contractor to confirm eligibility before installation.
Is there a limit on how many times I can get a rebate?
EmPOWER Maryland rebates are typically tied to the installation of qualifying equipment at a specific address. Replacing multiple systems may each qualify separately. There is no broad lifetime cap that applies across all households, but your utility may have address-specific limits — ask your installer or your utility for your situation.
What is HEEHRA and is it available in Maryland?
HEEHRA (High-Efficiency Electric Home Rebate Act) was funded under the Inflation Reduction Act as a separate, point-of-sale heat pump rebate program. As of June 2026, it had not launched in Maryland. The Maryland Energy Administration (MEA) website is the authoritative source for whether and when it becomes available.