What HVAC Rebates Can Lancaster County Homeowners Actually Get in 2026?
If you are replacing a furnace, air conditioner, heat pump, or water heater in Lancaster County this year, the savings picture looks very different than it did twelve months ago. The federal tax credit that covered up to 30% of a qualifying project ended on December 31, 2025. What is left are HVAC rebates from your utility and state financing programs, and those still add up to real money if you know what to apply for and when. Here is an honest breakdown of what a Lancaster County homeowner can actually claim in 2026, what has gone away, and what is not worth waiting for.
The Short Answer: HVAC Rebates You Can Claim Right Now
Gone: The federal 25C Energy Efficient Home Improvement Credit and the 25D Residential Clean Energy Credit both expired on December 31, 2025. Equipment installed in 2026 does not qualify for either.
Available today, if you are a PPL Electric customer: rebates on heat pumps, geothermal systems, mini-splits, heat pump water heaters, central air conditioning, insulation, and air sealing.
Available today, if you heat with natural gas from UGI: rebates on high-efficiency furnaces, boilers, combination boilers, and tankless water heaters.
Available today for financing: a 1% fixed-rate state loan through the Pennsylvania Housing Finance Agency for income-eligible homeowners.
Not available yet: Penn Energy Savers, Pennsylvania’s income-qualified federal rebate program. It has been announced but has not opened to homeowners.
What Happened to the Federal HVAC Tax Credit
For several years, homeowners could claim up to $2,000 back on a qualifying heat pump and smaller amounts on efficient furnaces, air conditioners, and water heaters under Section 25C. A separate credit, 25D, covered 30% of geothermal and solar projects with no dollar cap.
Congress set an end date for both in the One Big Beautiful Bill Act, passed in July 2025. Equipment had to be installed and placed in service by December 31, 2025 to qualify. If your system went in before that date and you have not filed for it, you may still be able to claim it on your 2025 return, and that is a conversation to have with your tax preparer. For anything installed in 2026, the federal credit is simply not there.
This matters for how you budget. Homeowners who were planning around a $2,000 federal credit need to rework the numbers, because what replaces it is smaller and comes from your utility instead of the IRS.
PPL Electric Rebates: What Is Available in 2026
PPL Electric serves most of Lancaster County and runs rebates under Pennsylvania’s Act 129 energy efficiency law. The program moved into a new phase on June 1, 2026, and current rebate amounts include:
- Ground-source (geothermal) heat pump: $500
- Air-source heat pump: $225 or $325, depending on efficiency tier
- Ductless mini-split heat pump: $225
- Heat pump water heater: $400
- Central air conditioner: $150 or $175, depending on efficiency tier
- Room air conditioner: $15
- Smart thermostat: $50 for self-installed, $100 professionally installed
- Attic, exterior wall, basement wall, or rim joist insulation: up to $200 or $500 depending on how your home is heated
- Air sealing: up to $150
- ENERGY STAR dehumidifier: $25 or $50
The eligibility rules matter as much as the amounts. Equipment must be ENERGY STAR certified, and your full system has to be listed in the AHRI directory as a matched set. An AHRI rating for just the outdoor unit will be rejected. For air-source heat pumps, the higher tier currently requires SEER2 of at least 16.3, EER2 of at least 12.9, and HSPF2 of at least 8.2. Rebates are also not available for new construction.
PPL additionally offers enhanced rebates and free services for customers who qualify based on household income, which is worth checking before you assume the standard amount is all you can get.
UGI Save Smart Rebates for Natural Gas Equipment
If you heat with natural gas from UGI, the gas-side rebates are considerably larger than the electric ones. Current amounts for residential customers include:
- Combination boiler (94% AFUE or better): $1,500
- Boiler (94% AFUE or better): $1,200
- ENERGY STAR gas furnace: $500
- Single package vertical unit (94% AFUE): $450
- ENERGY STAR tankless water heater: $400
- Boiler reset control: $300
- Direct vent gas fireplace insert (70% AFUE or better): $150
- ENERGY STAR smart thermostat: $50
Two rules trip people up. UGI’s program year runs from October 1 through September 30, and your application must be postmarked within 90 days of the installation date. Rebates are also subject to available funding, which means a program can close early in a heavy year. If your installation lands near the end of September, ask your contractor which program year your paperwork will fall under before you schedule the work.
First, Confirm Which Utilities You Actually Have
This sounds obvious, but Lancaster County is not served by a single pair of utilities, and homeowners regularly apply to the wrong program. PPL Electric covers most of the county, though parts are served by other providers. On the gas side, UGI serves the large majority of the county while some areas fall under PECO’s gas territory. Homes on heating oil or propane have no utility rebate program at all, though they are often the best candidates for a fuel switch.
Pull out your most recent electric and gas bills before you start. The utility name on those bills determines which rebate programs you can apply to, and it takes thirty seconds to check.
Penn Energy Savers: Real, But Not Something to Budget Around
Pennsylvania has been awarded federal funding for two income-qualified rebate programs, branded together as Penn Energy Savers. When they open, they are expected to cover up to $8,000 toward a heat pump for households at or below 80% of area median income, and 50% of project costs for households between 80% and 150%.
As of September 2026, the Department of Environmental Protection is still awaiting final federal approval to launch. The Department of Energy issued revised program guidance in June 2026, and DEP has been reworking the program design to comply before opening it to the public.
Here is the practical warning: these programs generally cannot fund work that was completed before your application is approved. Signing a contract now in the hope that a rebate will arrive later is a real risk, and it is not a reason to delay replacing a system that is actively failing. If you want to be ready, you can check eligibility and sign up for notifications through the state’s Penn Energy Savers site, then act on it if and when it opens.
Low-Interest Financing Through the State
For many Lancaster County homeowners, the more useful program right now is not a rebate at all. The Pennsylvania Housing Finance Agency runs the Homeowners Energy Efficiency Loan Program, which offers $1,000 to $10,000 at a fixed 1% APR over ten years with no prepayment penalty. That works out to roughly $44 a month on a $5,000 loan or $88 a month on a $10,000 loan.
Eligible work includes heating and cooling system repair or replacement, insulation, air sealing, and window and door replacement. There are income limits, though the agency can make exceptions up to 150% of area median income based on individual circumstances, and the contractor doing the work must be approved through the program. Compared to a typical home improvement loan at 8% to 15%, the interest savings over ten years can exceed the value of any rebate on this page.
Ranck also offers its own financing options for homeowners who need to move quickly or do not qualify for the state program.
Help for Income-Qualified Households
Several programs exist specifically for households with limited or fixed incomes, and they are consistently underused:
- LIURP, UGI’s Low Income Usage Reduction Program, provides free weatherization and usage reduction services to qualifying customers. Call 800-UGI-WARM to ask about enrollment.
- The Weatherization Assistance Program delivers federally funded weatherization work through local community action agencies.
- LIHEAP helps with heating bills and includes a crisis component that can assist with repairing or replacing a broken heater during the winter months.
If money is the reason a failing furnace has not been replaced, start with these before you assume replacement is out of reach.
Five Mistakes That Cost Homeowners Their Rebate
- Buying the equipment before checking eligibility. A system that is a half-step below the efficiency tier costs the same to install and returns nothing.
- Submitting an AHRI certificate for one component. The certificate has to cover the matched system, including the indoor coil and air handler or furnace.
- Missing the application window. UGI requires postmarking within 90 days of installation, and utility programs close and restart on their own calendars.
- Assuming new construction qualifies. Most of these rebate programs are for replacement and retrofit work only.
- Submitting an incomplete invoice. Your paperwork needs the manufacturer, model number, quantity, installation date, and proof of full payment. A contractor who handles rebate paperwork regularly will give you an invoice that has all of it.
What This Should Actually Change About Your Decision
It is worth being blunt about scale. A $325 heat pump rebate is a nice offset on a project that costs several thousand dollars, but it is not a reason to buy equipment that is wrong for your home. The much larger number is what the system costs to run for the next fifteen years.
That is where the fuel you are currently burning matters far more than any rebate. According to ENERGY STAR, switching from an oil heating system to a certified air-source heat pump saves an average of $950 a year, and replacing electric resistance heat saves an average of $460 a year. Those figures repeat annually for the life of the system. So do the losses from an oversized unit that short-cycles, or an undersized one that runs constantly through a Lancaster County January.
The right sequence is to choose the correct system for your home first, then capture every incentive that system qualifies for. Doing it in the opposite order is how homeowners end up with equipment that earned them $325 and costs them more every month.
Talk to Someone Who Files This Paperwork Every Week
Rebate amounts, efficiency tiers, and program deadlines change, sometimes mid-year. Before you commit to a project, verify current amounts directly with your utility, and confirm any tax question with your own tax professional.
Ranck has served Lancaster County since 1953, and our team works with these programs continuously across heating, cooling, geothermal, and water heater installations. We can tell you which equipment qualifies for what before you buy, make sure the AHRI documentation is right, and give you an invoice that will not get your application rejected.
Call Ranck at 717-397-2577 to schedule an estimate, and we will walk you through exactly which rebates your project qualifies for in 2026.