Are There Rebates, Tax Credits & Discounts Available for New HVAC Systems?
The cost of buying a new furnace or air conditioning unit can give anyone sticker shock. Even when you work with a local installer like Wyckoff, who offers competitive rates, the cost of a new unit is high.
Rebates and tax credits have traditionally worked together to lower the cost for homeowners looking to install energy-efficient units. However, the way these work has changed dramatically over the past few years. Large federal tax credit programs are ending, and rebate programs have come and gone.
However, there is still significant help available. Utility providers currently offer discounts for highly efficient units in the form of “instant discounts.” And some local assistance programs are available to help Iowans facing financial need.
The good news is that the main discount from your utility provider will be automatically applied to your bill by your HVAC contractor, much less work than the mail-in rebate programs of the past. Here’s a quick guide to what rebates and discounts are currently available in the Des Moines metro and how they work.
Rebates From MidAmerican & Alliant Energy Are Now "Instant Discounts"
If you’re replacing your furnace or installing a new air conditioner, the largest discount you may qualify for is through your electric company. Both MidAmerican Energy and Alliant Energy offer “instant discounts” on qualifying models of air conditioners, gas furnaces, heat pumps, and other items. These discounts are a replacement for the rebate program that utility companies previously offered.
How Instant Discounts Work
Instead of a rebate, which comes later as a check in the mail, an “instant discount” is automatically taken out of the final price at the time of sale. That means when you work with Wyckoff, you will already pay the discounted price at the time of installation. For example, a $5,000 unit with a $500 rebate would only cost you $4,500 that day.
How much could you save through this program? Here’s a closer look at available discounts for each type of unit.
Heating Units
Gas Furnaces: $2.40 per 1,000 Btuh input rating/unit. The unit must be 225,000 Btuh or below, with an annual fuel utilization efficiency (AFUE) rating of 95% or more.
Air Conditioning Units
- Electric Central Air Conditioners: $263 to $413 per unit
- Large Electric Central Air Conditioners: $150 per ton
Combination Heating & Cooling Units
- Ductless Split Heat Pump Systems: $375 per unit
- Air source Heat Pumps: $300 to $563 per unit
- Geothermal Heat Pumps: $900 to $1,200 per unit
- Desuperheaters: $113 per unit
Income-Based Assistance May Be Available
Furnace and air conditioning replacements are particularly hard on Iowa homeowners who are already struggling to make ends meet. If you find yourself in this situation, here are two of the needs-based programs that may be able to assist with the cost of replacing your unit.
Weatherization Assistance Program
The Weatherization Assistance Program is a needs-based program that helps families make energy-efficient upgrades to their homes. This may include furnace repairs or a full replacement. The weatherization program is administered through Iowa’s local Community Action Agencies. It is closely tied to the Low Income Home Energy Assistance Program, another program that helps Iowans afford their utility bills.
To qualify, an Iowa family must have an income lower than 200% of the poverty level and submit an application. Residents of Boone, Jasper, Marion, Polk, and Warren counties can contact IMPACT Community Action Partnership for more details.
Habitat for Humanity Home Preservation Program
Known for building homes, Habitat for Humanity also has an assistance program that helps Iowans remain in their homes by making repairs (such as replacing a furnace or A/C unit). The Home Preservation Program provides eligible homeowners with deferred, no-interest payments that they can make when they sell their home years later. This helps them build equity while getting the repairs they need.
The program has a wait list, but you can apply through the Greater Des Moines Habitat for Humanity website.
Can I Get the HVAC Tax Credit in 2026?
Homeowners in the past have qualified for hundreds to thousands of dollars in tax savings after installing energy-efficient home HVAC equipment. However, starting in 2026, new systems will no longer qualify for these tax credits.
That’s because the One Big Beautiful Bill Act (OBBBA), signed into law last year, is phasing out two major incentive programs:
- Residential Clean Energy Tax Credit: Formerly provided a 30% tax credit for geothermal heat pumps and solar.
- Energy Efficient Home Improvement Tax Credit: Formerly provided a 30% tax credit for equipment like furnaces, central air conditioners, and water heaters.
You May Still Qualify for These Tax Credits If:
Your new furnace, air conditioner, or heat pump was installed before Jan. 1, 2026. Note: For a project to qualify, it must be fully installed, not simply purchased, by this date.
You Will Not Qualify for These Tax Credits If:
Your new furnace, air conditioner, or heat pump was installed on Jan. 1, 2026, or later.
Need More Help With the Cost of Your Unit? Get Competitive Financing Through Wyckoff
As some of the incentive programs that previously were in place have gone away, we realize not all homeowners can fully cover the cost of an HVAC replacement on the day of installation. In these cases, financing your unit may be the best option.
There are many ways to finance a new HVAC unit. When you work with Wyckoff, we offer simple, flexible financing options to meet your needs. Learn more about how to get a fixed-rate, $0 down loan with us through our partner.
It’s also helpful to work with your HVAC contractor to select the unit that will provide the best savings for you. Even if the price tag of a higher efficiency may be slightly higher up front, it may save you more in energy costs over the long term. Our technicians are here to help you make these decisions.
Frequently Asked Questions About HVAC Discounts & Incentives
Do You Get a Tax Deduction for a New HVAC System?
Not unless you are a business or a landlord for large multifamily properties. Residential homeowners formerly qualified for federal tax credits that offset 30% of the cost of a new furnace or air conditioning unit. However, those benefits expired at the end of 2025.
If you own commercial property in Des Moines, you still qualify for a tax deduction under Section 179D of the Internal Revenue Code. This deduction will be based on the square footage of the building where you install the new system.
Is the SAVE Program Still Going in Iowa?
Not anymore. The SAVE (System Adjustment and Verified Efficiency) program was an initiative launched in 2014 meant to ensure the efficiency of new HVAC systems and help homeowners qualify for rebates. This program is no longer active.
Is the HEEHRA Program Available in Iowa?
Not currently. Established through the Inflation Reduction Act in 2022, the High-Efficiency Electric Home Rebates (HEEHRA) program is intended to provide rebates on energy-efficient household projects. Iowa was expected to receive about $60 million to administer this program. However, as of spring 2026, this program has yet to be set up in the state.
When your furnace or A/C goes out, we know that it brings up many questions. At Wyckoff Heating & Cooling, we’re dedicated to being your partner as you find the best replacement option for you. We’ll help guide you through the different types of units that are available to you and weigh the perfect blend of cost and energy efficiency.
Don’t get overwhelmed by HVAC issues. Contact the Wyckoff team today.