Michigan HVAC Rebates in 2026: What's Left Now the Tax Credit Is Gone

A year ago, the biggest number in any conversation about HVAC rebates was the federal tax credit. That credit is gone. If you're pricing a furnace, AC, or heat pump in 2026, the money available to you is smaller than it was, and a lot of what's still floating around online, including an earlier version of this page, is out of date.

The Federal Tax Credit Ended After 2025

For a few years, the 25C Energy Efficient Home Improvement Credit was the big one. It paid 30% of a qualifying system's cost, up to $600 for a high-efficiency furnace, AC, or boiler and up to $2,000 for a heat pump. Geothermal had its own, larger credit under a different section of the tax code.

The 2025 federal budget law ended both. Anything placed in service after December 31, 2025 doesn't qualify. That covers furnaces, central air, boilers, air-source heat pumps, mini-splits, and geothermal systems.

If your system went in during 2025, you're still fine. The date that matters is when it was installed and running, not when you signed the contract or paid the bill. You claim it on your 2025 return using IRS Form 5695. Hang on to the invoice with the model numbers and the manufacturer's certification statement. If you did the install and never claimed it, talk to your tax preparer.

If you're shopping now, plan as if there's no federal credit, because there isn't one. Congress could bring something back someday, but I wouldn't hold off on a furnace that needs replacing while you wait for that.

Utility Rebates Are the Main Thing Now

Consumers Energy serves most of Jenison, Hudsonville, Grandville, Grand Rapids, and the townships around them. They run rebates on qualifying high-efficiency furnaces, heat pumps, central air, and smart thermostats. The amounts depend on the equipment and its efficiency tier. A high-efficiency furnace usually gets a few hundred dollars, and a qualifying heat pump has typically gotten more. They also offer home energy assessments.

DTE supplies natural gas to parts of the Grand Rapids area and runs similar programs.

A few things to know about utility rebates:

• The list changes every year. Equipment that qualified last year may not this year, and the dollar amounts move. Check before you buy.
• There are deadlines. Most programs want the application within a set window after installation. Don't let the paperwork sit in a drawer.
• The equipment has to match. Rebates are tied to specific efficiency ratings, and sometimes to a matched indoor and outdoor unit. When we quote a system, we tell you which options qualify and which don't.

MiHER: Michigan's Income-Qualified Rebates

Michigan's Home Energy Rebates program, called MiHER, is run by the state's environment and energy department (EGLE) with federal funding. It's separate from the tax credit and it's still running.

There are two pieces:

• HEAR (electrification) covers heat pumps for heating and cooling, heat pump water heaters, and some electrical upgrades. For a heat pump, the rebate has gone up to $8,000. It's for households at or below 150% of area median income, and households at or below 80% can get up to the full cost covered.
• HOMES (whole-home efficiency) covers insulation, air sealing, and heating and cooling upgrades that cut a home's overall energy use.

How it works: you apply through the state first and get your income verified. Once you're approved, the work has to be done by a contractor enrolled in MiHER, and the rebate comes off at the point of sale instead of you waiting for a check. Funding is divided up by district, and some districts have paused new applications to keep the money balanced. Check the program's site for where things stand in Kent or Ottawa County before you count on it.

If you think you might qualify, it's worth the application. For a household under the income line, MiHER can be worth more than the old tax credit ever was.

Michigan Weatherization Assistance is a separate, older program for income-qualified homeowners. It covers insulation, air sealing, and sometimes furnace repair or replacement at no cost. Your local Community Action Agency handles applications.

Manufacturer Promotions

Carrier, Lennox, and the other big manufacturers run seasonal promotions, usually in spring and again in fall when people are making buying decisions. Some come off the invoice and some are mail-in rebates paid on a prepaid card. A matched system (furnace and AC, or a full heat pump system) usually gets a bigger promotion than a single piece of equipment.

We're a Carrier and Lennox dealer, so we know what's running when we write your quote.

One thing to watch: some "rebates" are really financing deals. "$1,500 back" can mean "$1,500 off if you finance through our lender," at a rate that eats the savings. Ask which kind it is before you sign.

What a Realistic Stack Looks Like Now

Take a homeowner in Jenison replacing an old furnace and AC with a cold-climate heat pump system. A year ago the federal credit was the biggest piece. Now it looks more like this:

For a household that doesn't qualify for MiHER, that's a smaller number than people were seeing last year. It still helps. It just shouldn't be the reason you pick one system over another.

That matters most on the heat pump question. The old credit tilted things toward a heat pump by about $1,400 compared to a furnace. Without it, the choice comes down to the house: insulation, ductwork, gas versus electric rates, and how you want it to run when it's ten below. Our heat pump vs. furnace breakdown goes through that. The same goes for efficiency upgrades. Run the payback on a high-efficiency furnace with the rebates you'll actually get, not last year's.

How to Keep a Quote Honest

Compare prices before rebates. Some outfits raise the price by about the amount of the rebate, so the "savings" never reach you. Line up quotes on the installed price first, then subtract the incentives. We show the full price and each incentive as separate lines for that reason.

Make sure the equipment qualifies before it's installed. Rebate rules are tied to specific model numbers and efficiency ratings. Ask the contractor to confirm which incentives each option qualifies for, in writing.

Keep your paperwork. Invoice with model numbers, the efficiency certificate, and the AHRI matchup for a split system. Utility rebates ask for it, and if you ever sell the house, the next owner will want it too.

When we finish an install, we hand you all of it. If you'd like a quote that lists the real incentives for your house, and nothing that expired last December, send us a request or call.