ENERGY STAR certification alone no longer qualifies you for a federal tax credit in 2026. The Section 25C tax credit, which covered ENERGY STAR certified HVAC equipment, expired December 31, 2026 under the One Big Beautiful Bill Act. However, ENERGY STAR certification remains the single most important qualification standard for state rebate programs, utility incentives, and the IRA-funded HOMES and HEAR programs that are now the primary source of HVAC savings in 2026.
If you installed ENERGY STAR equipment in 2026, you can still claim federal credits on your 2026 tax return. And if you're buying in 2026, ENERGY STAR certification is your gateway to every remaining incentive.
ENERGY STAR and Federal Tax Credits: A Brief History
ENERGY STAR has been the federal government's benchmark for energy-efficient products since 1992. When Congress created enhanced energy tax credits through the Inflation Reduction Act in 2022, they tied eligibility to specific efficiency standards — and ENERGY STAR was central to qualifying.
But the actual tax credit eligibility threshold was set by the Consortium for Energy Efficiency (CEE), not ENERGY STAR itself. Here's the distinction that tripped up many homeowners:
- ENERGY STAR certified meant a product exceeded minimum federal efficiency standards by a defined margin. This was necessary but not always sufficient for the tax credit.
- CEE highest tier was the actual 25C tax credit threshold. Products had to meet or exceed CEE's highest efficiency tier (excluding advanced tiers) in effect at the beginning of the installation year.
- ENERGY STAR Most Efficient was a separate, higher designation that often aligned closely with CEE's highest tier.
In practice, most products that met the CEE highest tier were also ENERGY STAR certified, but not all ENERGY STAR certified products met the CEE highest tier. The qualification flow looked like this: ENERGY STAR → (maybe) CEE Highest Tier → Tax Credit Eligible.
What Changed Under OBBBA
The One Big Beautiful Bill Act (signed July 4, 2026) terminated Section 25C for equipment installed after December 31, 2026. This severed the direct link between ENERGY STAR certification and federal tax credits for 2026 installations.
| Year | ENERGY STAR → Federal Tax Credit? | Notes |
|---|---|---|
| 2023 | Yes (if meets CEE highest tier) | Enhanced 25C, 30% up to $3,200/year |
| 2024 | Yes (if meets CEE highest tier) | Same as 2023 |
| 2026 | Yes (if meets CEE highest tier + PIN) | PIN required; last year for credit |
| 2026 | No | 25C terminated; no federal credit |
What ENERGY STAR Certification Means in 2026
Even without federal tax credits, ENERGY STAR certification is more important than ever because every major state and utility rebate program uses it as a minimum eligibility standard.
Current ENERGY STAR Efficiency Requirements for HVAC
The following table shows ENERGY STAR certification thresholds in effect for 2026. These use the SEER2/HSPF2/EER2 testing standards that became mandatory in January 2023.
| Equipment Type | ENERGY STAR Minimum | ENERGY STAR Most Efficient | CEE Highest Tier* |
|---|---|---|---|
| Central AC (Split) | SEER2 15.2 / EER2 11.7 | SEER2 17.2+ / EER2 12.5+ | SEER2 16+ / EER2 12.2+ |
| Central AC (Package) | SEER2 14.6 / EER2 11.0 | SEER2 15.8+ / EER2 12+ | SEER2 15.2+ / EER2 11.5+ |
| Air-Source Heat Pump (Split) | SEER2 15.2 / HSPF2 7.8 / EER2 11.7 | SEER2 17.2+ / HSPF2 9+ | SEER2 16+ / HSPF2 8.5+ |
| Air-Source Heat Pump (Package) | SEER2 14.6 / HSPF2 7.2 / EER2 10.6 | SEER2 16+ / HSPF2 8+ | SEER2 15.2+ / HSPF2 8+ |
| Ductless Mini-Split | SEER2 16 / HSPF2 9 | SEER2 20+ / HSPF2 10+ | SEER2 18+ / HSPF2 9.5+ |
| Gas Furnace | 97% AFUE | 97%+ AFUE | 97%+ AFUE |
| Boiler (Gas) | 90% AFUE | 95%+ AFUE | 95%+ AFUE |
| Geothermal HP (Closed Loop) | EER 17.1 / COP 3.6 | — | EER 17.1+ / COP 3.6+ |
| Heat Pump Water Heater | UEF 2.20 (50 gal) | UEF 3.30+ | UEF 2.20+ |
CEE tiers shown are approximate — check CEE's published directories for exact current specifications. CEE unified North American efficiency regions beginning January 1, 2026, eliminating the previous North/South split.
Why CEE tiers still matter in 2026: Many state rebate programs continue to reference CEE's highest tier as their qualifying standard, even though the federal tax credit is gone. The HEAR program requires equipment to meet ENERGY STAR certification at minimum, while some state programs offer enhanced rebates for CEE highest tier equipment.
ENERGY STAR Qualifications for 2026 State & Utility Rebates
Here's how ENERGY STAR certification connects to the rebate programs that are actually available in 2026.
HEAR Program Requirements
The federal HEAR program guidance specifies that eligible equipment must be ENERGY STAR certified (or meet equivalent performance standards where no ENERGY STAR specification exists). Individual states may set higher thresholds.
| Equipment | HEAR Minimum Standard | Max Rebate (≤80% AMI) | Max Rebate (80–150% AMI) |
|---|---|---|---|
| Heat pump (HVAC) | ENERGY STAR certified | $8,000 | $4,000 |
| Heat pump water heater | ENERGY STAR certified | $1,750 | $1,750 |
| Electric stove/cooktop | ENERGY STAR certified (where applicable) | $840 | $840 |
| Clothes dryer (HP) | ENERGY STAR certified | $840 | $840 |
| Insulation/air sealing | Meets IECC standards | $1,600 | $1,600 |
| Electrical panel | 200A+ service | $4,000 | $2,000 |
California's additional requirement: Starting January 1, 2026, California's HEEHRA program requires eligible heat pumps to use refrigerants with a global warming potential (GWP) of 700 or lower. This eliminates many systems using R-410A (GWP of 2,088) and favors R-32 (GWP 675) or R-454B (GWP 466). Other states may adopt similar requirements.
Utility Rebate Standards
Most utility rebate programs set one of three qualification tiers:
| Tier | Typical Requirement | Rebate Level |
|---|---|---|
| Basic | ENERGY STAR certified | $200–$500 |
| Enhanced | ENERGY STAR Most Efficient | $500–$1,500 |
| Premium | CEE highest tier or equivalent | $1,000–$2,500+ |
Real-World Example: ENERGY STAR vs. Non-ENERGY STAR Purchase
Tom in Portland, OR is replacing his 18-year-old central AC. He's comparing two options:
Option A: Budget AC (non-ENERGY STAR) — 14 SEER2, $4,200 installed Option B: ENERGY STAR certified AC — 16.5 SEER2, $5,800 installed
| Factor | Option A (Non-ES) | Option B (ENERGY STAR) |
|---|---|---|
| Installed cost | $4,200 | $5,800 |
| Portland General Electric rebate | $0 | $600 |
| Oregon HEAR rebate (if income-qualified) | $0 | Up to $8,000 |
| Annual energy cost (est.) | $680 | $510 |
| 10-year energy savings vs. Option A | — | $1,700 |
| Effective cost (with utility rebate only) | $4,200 | $5,200 |
| Effective cost (with HEAR ≤80% AMI) | $4,200 | $0 or less |
Even without federal tax credits, the ENERGY STAR unit pays for itself through utility rebates and energy savings. For income-qualified homeowners, HEAR can cover the entire cost.
Real-World Example: ENERGY STAR Most Efficient Premium
Sarah in Chicago, IL is installing a heat pump to replace her gas furnace. She's looking at two ENERGY STAR certified models, one of which also carries the ENERGY STAR Most Efficient designation.
Option A: Carrier 25VNA8 — SEER2 22, HSPF2 10.5 (ENERGY STAR Most Efficient) Option B: Carrier 24SPA636 — SEER2 15.2, HSPF2 8.1 (ENERGY STAR, not Most Efficient)
| Factor | Option A (Most Efficient) | Option B (Standard ES) |
|---|---|---|
| Installed cost | $14,500 | $8,900 |
| ComEd utility rebate | $2,000 | $800 |
| IL HEAR rebate (80–150% AMI) | $4,000 | $4,000 |
| Annual heating/cooling cost | $1,050 | $1,480 |
| 15-year energy savings vs. B | $6,450 | — |
| Net cost after rebates | $8,500 | $4,100 |
| 15-year total cost of ownership | $24,250 | $26,300 |
The premium ENERGY STAR Most Efficient model costs $4,400 more after rebates, but saves $6,450 in energy over 15 years — a net win of $2,050. Higher-efficiency equipment makes the most financial sense when you can capture both utility rebates and lifetime energy savings.
How to Verify ENERGY STAR Certification
Before purchasing any HVAC equipment in 2026, verify its certifications through these official channels:
ENERGY STAR Product Finder (energystar.gov/productfinder): Search by product category, brand, and model number. Shows whether a product is ENERGY STAR certified and whether it holds the Most Efficient designation.
AHRI Directory (ahridirectory.org): The Air-Conditioning, Heating, and Refrigeration Institute certifies performance ratings for HVAC equipment. Search matched systems (indoor + outdoor units) to confirm rated SEER2, HSPF2, and EER2 values.
CEE Qualifying Product Lists (cee1.org): For programs that reference CEE tiers, check CEE's published qualifying product lists by category. These are updated periodically throughout the year.
Manufacturer's Website: Major brands like Carrier, Trane, Lennox, Rheem, Goodman, Daikin, and Mitsubishi maintain pages listing their tax-credit and rebate-eligible models. While 25C is no longer relevant, these pages typically list ENERGY STAR certification status.
Always verify matched system ratings. An outdoor condenser unit may be ENERGY STAR certified when paired with a specific indoor air handler, but not when paired with a different one. The AHRI directory lets you look up specific combinations to confirm exact efficiency ratings.
ENERGY STAR Specifications by Equipment Type
Central Air Conditioners
ENERGY STAR certified central ACs must exceed federal minimum standards by a meaningful margin. Here's how the tiers compare:
| Standard | SEER2 (Split) | EER2 (Split) | SEER2 (Package) | EER2 (Package) |
|---|---|---|---|---|
| Federal minimum | 13.4 | 10.6 | 13.4 | 10.6 |
| ENERGY STAR | 15.2 | 11.7 | 14.6 | 11.0 |
| ENERGY STAR Most Efficient | 17.2+ | 12.5+ | 15.8+ | 12+ |
| CEE highest tier | 16+ | 12.2+ | 15.2+ | 11.5+ |
An ENERGY STAR certified central AC uses approximately 8–15% less energy than the federal minimum standard, depending on the specific efficiency level.
Heat Pumps (Air-Source)
Heat pumps qualify for the largest rebates in most programs because they provide both heating and cooling from a single system, reducing electrification barriers.
| Standard | SEER2 (Split) | HSPF2 (Split) | EER2 (Split) |
|---|---|---|---|
| Federal minimum | 13.4 | 7.5 | 10.6 |
| ENERGY STAR | 15.2 | 7.8 | 11.7 |
| ENERGY STAR Most Efficient | 17.2+ | 9+ | — |
| CEE highest tier | 16+ | 8.5+ | — |
| Premium cold-climate models | 20+ | 10+ | — |
Cold-climate heat pumps are a growing category designed to maintain high heating output at temperatures as low as -15°F. While ENERGY STAR has a Cold Climate designation, not all state programs have adopted it yet. If you live in IECC climate zones 4–7, look specifically for models rated at 5°F and below.
Ductless Mini-Splits
Mini-splits have their own ENERGY STAR specification that reflects their inherently higher efficiency compared to ducted systems.
| Standard | SEER2 | HSPF2 |
|---|---|---|
| Federal minimum | 13.4 | 7.5 |
| ENERGY STAR | 16 | 9 |
| ENERGY STAR Most Efficient | 20+ | 10+ |
| Top-tier models (Mitsubishi, Daikin) | 25+ | 13+ |
Gas Furnaces and Boilers
Even with the push toward electrification, gas equipment remains eligible for some utility rebates — particularly in northern climates where dual-fuel systems are common.
| Equipment | Federal Minimum | ENERGY STAR | Notes |
|---|---|---|---|
| Gas furnace | 80% AFUE (non-weatherized) | 97% AFUE | Must be condensing |
| Gas boiler | 82% AFUE | 90% AFUE | ENERGY STAR Most Efficient: 95%+ |
| Oil furnace | 83% AFUE | 86% AFUE | Limited rebate availability |
Heat Pump Water Heaters
Heat pump water heaters are one of the most cost-effective electrification upgrades and qualify for substantial HEAR rebates.
| Standard | UEF (50-gallon) | UEF (65-gallon) | UEF (80-gallon) |
|---|---|---|---|
| Federal minimum (electric) | 0.93 | 2.00 | 2.00 |
| ENERGY STAR | 2.20 | 2.78 | 2.78 |
| ENERGY STAR Most Efficient | 3.30+ | 3.30+ | 3.30+ |
Real-World Example: Navigating Specifications for a Whole-Home Upgrade
The Petersen family in Minneapolis, MN is doing a comprehensive upgrade. Here's how ENERGY STAR certification affects their rebate eligibility across multiple products:
| Equipment | Model | ENERGY STAR Status | Xcel Rebate | MN HEAR (Est.) |
|---|---|---|---|---|
| Cold-climate heat pump | Mitsubishi SVZ-KP36 + MXZ-4C36 | ENERGY STAR Most Efficient | $2,500 | $4,000 |
| Heat pump water heater | Rheem ProTerra?"80 gal | ENERGY STAR Most Efficient | $500 | $1,750 |
| Insulation upgrade | R-49 attic, R-21 walls | N/A (meets IECC) | $300 | $1,600 |
| Electrical panel upgrade | 200A panel | N/A | $0 | $2,000 |
| Total rebates | $3,300 | $9,350 | ||
| Combined total | $12,650 | |||
| Total project cost | $32,000 | |||
| Out-of-pocket | $19,350 |
Without federal credits, this family saves $12,650 through state and utility rebates — all keyed to ENERGY STAR certification as the baseline requirement.
Tips for Maximizing ENERGY STAR Rebates in 2026
Buy at or above CEE highest tier. Even though it's no longer required for a federal credit, CEE highest tier products often unlock the top rebate tier from utilities. The incremental cost over standard ENERGY STAR is typically $200–$800 but can yield $500–$1,000+ in additional rebates.
Check the ENERGY STAR Most Efficient list annually. ENERGY STAR updates its Most Efficient designations each year. The 2026 list may have different thresholds than 2026. Products on this list represent the top 15–25% of their category.
Verify matched-system ratings before purchase. Your contractor should confirm that the specific combination of outdoor unit, indoor coil/air handler, and thermostat achieves the ENERGY STAR rating you need. Individual components don't carry ratings — only matched systems do.
Document everything for rebate applications. State rebate programs require AHRI certificates, ENERGY STAR certification verification, and installation documentation. Get these from your contractor at the time of installation, not after the fact.
Consider the refrigerant transition. The EPA's AIM Act is phasing down HFC refrigerants. In 2026, look for systems using R-454B (Puron Advance) or R-32 rather than R-410A. California already requires low-GWP refrigerants for HEAR eligibility, and other states may follow.
Key Takeaways:
- ENERGY STAR certification no longer triggers a federal tax credit (25C expired December 31, 2026).
- However, ENERGY STAR certification is the baseline requirement for nearly every state rebate, utility incentive, and HEAR program in 2026.
- CEE highest tier and ENERGY STAR Most Efficient designations unlock premium rebate amounts.
- Always verify matched-system ratings through the AHRI directory — component-level specs don't count.
- California now requires low-GWP refrigerants (≤700) for HEAR eligibility as of January 2026.
- The financial case for ENERGY STAR equipment is stronger than ever when you combine rebates with lifetime energy savings.