The short answer
One federal incentive still applies to Arizona homeowners in 2026: the HEAR / 'Efficiency Arizona' program, offering up to $8,000 toward a qualifying heat pump for income-qualified households (funded through September 30, 2031). The federal 25C tax credit ended for equipment placed in service after December 31, 2025 — installs completed by that date can still claim it on a 2025 return.
What is the HEAR / Efficiency Arizona program?
HEAR stands for the federal Home Electrification and Appliance Rebates program, administered in our state as 'Efficiency Arizona.' It's designed to help households electrify with efficient equipment, and for HVAC the headline benefit is up to $8,000 toward a qualifying heat pump.
It's income-qualified: the rebate amount depends on your household income relative to the area median, so not every household receives the full $8,000. Funding is available through September 30, 2031, but program dollars are limited — early is better.
Heat pumps unlock the biggest federal dollars
The largest federal incentives target heat pumps, which both cool and heat. In Phoenix's mild winters a heat pump is a strong fit — see our heat pump vs. AC comparison.
What happened to the 25C tax credit?
The federal 25C Energy Efficient Home Improvement Credit ENDED for property placed in service after December 31, 2025 (July 2025 federal tax law). What that means in practice:
- New installs completed in 2026 or later can NOT claim 25C
- If your qualifying system was placed in service by December 31, 2025, you can still claim it (up to $600 for a high-efficiency AC, up to $2,000 for a heat pump) when you file your 2025 return — IRS Form 5695
- It was a tax credit you claim when you file — not an instant rebate
- Verified against IRS OBBB guidance, July 2026
Not tax advice
Credit amounts, eligibility, and rules can change. Confirm your specific situation with a qualified tax professional before counting on a credit.
Can I combine federal incentives with SRP Cool Cash?
Often yes — utility rebates and federal incentives are separate programs. An SRP customer might claim Cool Cash and the income-qualified HEAR rebate on the same qualifying heat pump. APS customers, who no longer have a utility HVAC rebate in 2026, can still use HEAR if they income-qualify.
The combination of a utility rebate (if you're on SRP), the HEAR rebate (if income-qualified), and financing is how many Phoenix homeowners make a high-efficiency upgrade affordable.
How do you find out what you qualify for?
Eligibility depends on your utility, your household income (for HEAR), and the specific equipment you install. The cleanest path is to pick a qualifying, AHRI-matched system and then map it against every program — utility and federal — that applies.
RM III will walk you through which incentives you can realistically claim and document the equipment so the paperwork holds up. We'll never inflate an 'up to' figure to win the job.
No — up to $8,000 is the maximum, and it's income-qualified, so the amount depends on your household income relative to the area median. Funding is available through September 30, 2031 but is limited. We'll help you check whether your household qualifies and for how much.
The HEAR / Efficiency Arizona program is federal — it applies regardless of whether you're served by APS or SRP, and APS customers especially should look at it since APS ended its residential HVAC rebate on January 1, 2026. The federal 25C tax credit, however, ended for installs after December 31, 2025 and can't be claimed on new 2026 installs.
Terms in this guide
- HEAR / Efficiency Arizona
- The federal Home Electrification and Appliance Rebates program, administered in Arizona as 'Efficiency Arizona.' It offers income-qualified households up to $8,000 toward a qualifying heat pump, with funding available through September 30, 2031.
- 25C tax credit
- The federal Energy Efficient Home Improvement Credit — ENDED for equipment placed in service after December 31, 2025 (July 2025 federal tax law). Systems installed by that date could claim 30% of cost, up to $600 for a high-efficiency central AC or $2,000 for a heat pump, on the 2025 return. Confirm details with your tax professional.
- Heat pump
- An all-electric system that both cools and heats by moving heat rather than burning fuel. A heat pump cools exactly like an AC in summer and reverses to provide efficient heat in Phoenix's mild winters — one system instead of a separate AC and furnace.
- SRP Cool Cash
- Salt River Project's rebate for SRP electric customers who install qualifying high-efficiency equipment (15.2 SEER2 or higher). It pays up to $1,125, with an additional variable amount based on system tonnage, for installs completed by April 30, 2027. RM III files the paperwork for you.
- AHRI-matched system
- An outdoor and indoor unit certified by the Air-Conditioning, Heating, and Refrigeration Institute to perform together at their rated efficiency. Rebates and warranties generally require an AHRI-matched system — mixing mismatched parts can void both.