Time is running out on one of the HVACR industry’s biggest sales opportunities: the Inflation Reduction Act’s (IRA) energy efficiency tax credits — including up to $3,200 for qualifying upgrades that can reduce costs by up to 30% (as per 25C), which expire December 31, 2025.
For contractors, this deadline isn’t just a date on the calendar — it’s a chance to spark sales, strengthen customer relationships, and stand apart from competitors who aren’t talking incentives. Industry experts say those who start preparing now — identifying projects, educating customers, and training teams — will be best positioned to benefit before the clock runs out.
What’s At Stake
For HVACR contractors, the most impact sunsetting credits are those tied to Sections 25C and 25D.
“Programs like the Federal Residential Clean Energy Credit (25C), Home Efficiency Rebates (HER), and Home Electrification and Appliance Rebates (HEAR) offer substantial financial benefits for residential HVAC upgrades, making all-climate heat pumps more accessible than ever,” DeBlois said. “In both HER and HEAR, contractors are the primary point of access to funding — from assessments to installations and filing. The programs require active contractor involvement for customers to benefit.”
To aid customers, METUS offers a qualified-products list and an online IRA resource page outlining which systems qualify, along with solution bundles designed to meet 25C requirements.
With credits like 25C set to expire, promoting them is exactly what contractors and industry stakeholders alike need to do — if they want to make the most of them while time still allows, that is.
“Now is the time for contractors to help homeowners navigate available IRA incentives and position their businesses as the go-to partner for energy-efficient home upgrades,” DeBlois said.
Understanding what’s available (and when it no longer will be) is the first step to helping customers act before these incentives disappear.
Sean Robertson, vice president of membership, advocacy, and events at Air Conditioning Contractors of America (ACCA), said contractors should make sure their marketing messages for the remainder of the year emphasize the December 31 deadline for up to $3,200 in tax credits for energy-efficient home upgrades. Contractors can also join ACCA’s fight to restore these credits at acca.org/advocacy.
“But there are no guarantees, so they should make hay while the sun shines,” Robertson said.
Fast action is also particularly essential for any customers considering a ground-source heat pump.
“Section 25D provides a 30% tax credit for geothermal systems with no cap,” Robertson said. “With that benefit disappearing December 31, geothermal drillers are booking up fast. Contractors should reach out quickly to any customers who have considered geothermal in the past to make sure they get on drillers’ schedules before it’s too late.”
Robertson also noted that while these credits are going away, funding for the IRA’s Home Energy Rebate programs remains in place beyond 2025.
“Rebates are currently available in 11 states and the District of Columbia and can be combined with the tax credits. It is unclear if and when additional states will receive final approval for their rebate programs,” Robertson said. “But ACCA will continue advocating for and reporting on the availability of Home Energy Rebates in additional states.”
Common Mistakes (And Missed Opportunities)
Even with thousands of dollars in incentives on the table, many contractors are still leaving money — and potential business — unclaimed. From underestimating customer interest to overlooking equipment performance tradeoffs, it seems the most common mistakes come down to awareness, training, and communication.
“Don’t overlook the power of combining rebates and tax credits,” DeBlois said. “When contractors inform homeowners that they can layer federal, state, and local incentives, it often moves them from ‘maybe’ to ‘yes.’ Knowledge is not just power — it’s a sales tool.”
When contactors aren’t fully informed, it leads to both them and their customers missing viable opportunities.
“Contractors should keep in mind that, in addition to the well-publicized $2,000 for heat pumps, 25C can also deliver up to $1,200 for additional improvements like insulation, wiring upgrades, or the furnace in a dual fuel system (up to $600 each),” Robertson said.
Many contractors might be under the assumption that customers are already aware of these incentives, and they’ve lost interest due to past delays. But everyone needs a little push now and then.
“Many customers need that extra nudge, and the urgency created by this year-end deadline could actually be a silver lining that will drive replacement business through the shoulder season,” Robertson said.
Most of these missed opportunities stem from a lack of training.
“Contractors unfamiliar with all-climate heat pumps or the incentives tied to them are unlikely to effectively communicate their value,” DeBlois said. “If multiple contractors visit a homeowner, the one who clearly explains available savings and benefits is far more likely to win the job.”
But, not so fast. Nate Adams, founder of Nate the House Whisperer, said contractors should be careful chasing credits at the cost of proper equipment install/performance.
“Be careful chasing tax credits at the expense of dehumidification performance; non-communicating equipment with good cold temperature performance typically sacrifices dehumidification capabilities,” Adams said. “Be sure to offer a whole-home dehumidifier on every project to reduce your risk. You can point back to that offer/decline in the future.”
Strategies For Contractors To Act Now
Avoiding mistakes and missed opportunities is only half the battle — contractors will see real payoff only if they take deliberate action. Fortunately, it’s not too late. Here are three actionable steps contractors can take to capitalize on these incentives before the clock runs out:
- Make Ira Incentives Part of Every Sales Conversation
Now is not the time to skirt the conversation.
“Don’t wait for customers to bring it up,” DeBlois said. “Lead with it. Make tax incentives part of your regular sales conversation. Your ability to explain both the technical benefits and the financial upside could be the key to winning more jobs and growing your reputation as a forward-thinking contractor.”
Robertson emphasized the importance of proactive outreach. Now is the time to identify customers who’ve been on the fence about upgrades and reach out.
“Even a simple message highlighting the ‘last chance’ to claim up to $3,200 in federal credits can drive action,” Robertson said. “Make sure your sales team knows how to explain these incentives, and use marketing tools provided by associations to get the word out.”
- Use Bundled Solutions and Clear Messaging
The key is to make these incentives make sense to homeowners.
“The IRA offers generous incentives for homeowners to upgrade to more efficient all-climate heat pump systems,” DeBlois said. “These include federal tax credits and rebates that can be combined with state and local programs — making the value proposition for customers compelling. For many homeowners, these savings aren’t always clear until a contractor explains them. That’s where opportunity lies.”
- Train Teams On the Full Value, and Prepare
Contractors have to ensure that every single person on their team — from sales staff to installers — understands both the technical and financial advantages of these credits.
Adams warned against basing sales processes on incentives, as they change and can leave you in the lurch.
“If you are helping clients solve problems, don’t let incentives change what you recommend unless those products are well aligned to your client goals,” he said. “You might consider using the incentive to upgrade the system in your own home so you can try out a high-end piece of equipment.”
With the deadline quickly approaching, Adams expects to see an increase in cold-climate heat pump sales this year.
“In Canada, their Green Homes program ended suddenly, as did most heat pump sales,” said Adams. “That is likely to happen in the U.S. as well next year.” Contractors experienced a slower-than-normal first quarter as a result.
Right now is peak HVAC season, and most U.S. contractors have more business than they or their teams can handle. Chances are, many just haven’t had the chance to focus on incentives.
Robertson said the upcoming shoulder season offers a prime window to use year-end deadlines to drive replacement business, including larger jobs with customers motivated by environmental benefits and long-term savings.
“The contractors who prepare now, by identifying likely-to-upgrade customers, financing options for larger jobs, and training their team on how to talk about the credits, will be the ones who benefit most,” Robertson said.
ACCA is equipping contractors with a toolkit to market expiring IRA incentives, including homeowner handouts, social media graphics, and ongoing policy updates. The association also offers webinars, advocacy alerts, and guidance to help members position rebates, navigate policy changes, and even leverage education funding for team training.