Saturday, March 29, 2025

Guide to clean energy incentives and rebates for NY HVAC and home energy contractors (2025)

James Moore

Key takeaways

  • Homeowners can access up to $14,000 in federal rebates and $3,200 in annual tax credits for energy upgrades like heat pumps, insulation, and electric appliances.
  • New York State offers additional programs through NYSERDA and utility partners, including EmPower+ (free upgrades for low/mod income households), NYS Clean Heat (heat pump rebates), and Comfort Home (insulation/air sealing rebates).
  • Most incentives can be combined—a single project may qualify for federal tax credits, state rebates, and low-interest financing through NYSERDA’s Smart Energy loans.
  • Contractors must be enrolled in specific programs (e.g. Clean Heat, EmPower+) to offer many of the rebates or be reimbursed.
  • Using incentives in your sales process—such as applying rebates as instant discounts or walking customers through tax credit eligibility—can help close more jobs and boost referrals.
  • 2025 is a key year for growing your business with incentive-backed projects as New York expands access to both state and federal funding.

2025 is a great year to help your customers save money with clean energy upgrades. There are powerful new incentives at both the federal and state level that can make projects like heat pump installations, insulation, and efficient appliances much more affordable. This guide breaks down the key federal programs from the Inflation Reduction Act (IRA) and New York State (NYSERDA) programs, with practical tips on eligibility and how you can leverage these incentives in your customer conversations. Our aim is to give you a friendly, in-depth roadmap so you can confidently guide homeowners through the rebates, tax credits, and financing options available. Let’s dive in!

Federal Clean Energy Incentive Programs in 2025

The federal government, through the IRA, has launched generous incentives to promote home energy efficiency and electrification. As a contractor, you should be familiar with these nationwide programs and how they can benefit your New York customers. Here’s an overview of the major federal programs relevant to HVAC and home energy projects:

Energy Efficient Home Improvement Tax Credit (IRS Section 25C)

One of the most accessible incentives is the updated Energy Efficient Home Improvement Credit, a federal tax credit for homeowners making qualifying energy upgrades. Starting in 2023 (and available each year through 2032), this credit covers 30% of the cost of eligible improvements, with an annual cap of $3,200 per taxpayer (

) (). Key details include:

  • Annual Credit Limits: Homeowners can claim up to $1,200 per year for a bundle of efficiency measures like building envelope improvements and energy-efficient equipment, plus up to $2,000 additional per year for certain heat pumps or heat pump water heaters (). In total, a homeowner can get as much as $3,200 back in tax credits each year if they do a comprehensive upgrade (e.g. insulation + new heat pump) ().
  • Eligible Improvements: Qualifying measures include things like insulation and air sealing, efficient windows and exterior doors, HVAC upgrades, and even home energy audits. For example, the credit can reimburse 30% of project costs up to specific caps by category – such as up to $600 for efficient windows or central AC units, up to $500 for exterior doors (with a $250 cap per door), up to $150 for a professional home energy audit, and a full $2,000 for installing an eligible heat pump, heat pump water heater, or biomass stove () (). These caps reset each calendar year.
  • No Lifetime Limit: Unlike the old $500 lifetime cap, this revamped credit can be used every year through 2032, as long as the homeowner has eligible expenses (). This means a customer could improve their home in stages (e.g. insulation this year, a heat pump next year) and keep getting credits annually.
  • Product Requirements: Starting in 2025, the IRS requires that any equipment claimed (like a heat pump or water heater) must come from a IRS‐qualified manufacturer and you must provide a product identification number (PIN) on the homeowner’s tax return (). As a contractor, be aware of this – make sure the products you install are compliant and provide the customer with the manufacturer’s certification/PIN so they can claim the credit.
  • Who Benefits: This is a non-refundable tax credit, so the homeowner needs to have federal tax liability to utilize it (it will reduce their taxes owed, but won’t produce a refund beyond that) (). There’s no income limit – any homeowner can qualify, whether in New York or elsewhere, as long as the improvements meet the efficiency criteria (often ENERGY STAR® certified products, per IRS guidelines).

How to use it in sales: You can remind customers that 30% of the cost of qualifying upgrades will come back to them at tax time. For example, if you install a $10,000 cold-climate heat pump, the homeowner may get a $3,000 credit (subject to the $2,000 heat pump cap) on their taxes – effectively lowering their net cost. This credit can make a big difference in ROI when customers are on the fence. Be prepared to give them IRS resources or forms (like Form 5695) and documentation of the product’s certification. (For official details, see IRS guidance (

).)

HOMES Rebate Program (Whole-Home Energy Efficiency Rebate)

Another huge opportunity coming via the IRA is the Home Energy Performance-Based, Whole-House Rebate Program, commonly called the HOMES rebate or Home Efficiency Rebates. This is a federally funded rebate (not a tax credit) that will be administered by state energy offices – in New York, that means NYSERDA will roll it out. As of early 2025, New York has begun implementing this in phases. Here’s what you need to know:

  • Performance-Based Rebates: The HOMES program rewards overall energy savings in an existing home. Homeowners (or contractors on their behalf) can get cash rebates for achieving significant reductions in total home energy use. There are two levels for single-family homes:
  • Double Rebates for Lower-Income Households: For homeowners classified as low- or moderate-income, the rebates double – up to $4,000 for ~20% savings, or up to $8,000 for 35%+ savings (). In the IRA, “low/moderate income” generally means household income below ~80% of the area median income (AMI) for this efficiency program (). So if your customer’s income is under that threshold, they qualify for these larger incentive amounts.
  • How to Achieve and Verify Savings: There are two pathways:
  • Timeline in New York: New York was actually the first state to start offering IRA-funded home rebates (they launched an initial phase in mid-2024) (). The first phase focused on low-income households through NYSERDA’s existing programs (more on that later). NYSERDA is in the process of rolling out the full HOMES rebate program statewide. They have applied for about $159 million in federal funds for these Home Efficiency Rebates (). As of 2025, we expect broader availability, including for moderate- and middle-income customers. Tip: Stay tuned to NYSERDA announcements so you know when you can start helping all customers tap these rebates.
  • Contractor Involvement: To leverage HOMES rebates, you may need to be an approved participating contractor or work with a program partner. Because these rebates will likely be delivered through a state program, there will be paperwork and verification involved. Encourage interested homeowners to get an energy assessment (many can get this for free in NY – see below) to establish a baseline. You can then plan a scope of work (insulation, HVAC upgrades, etc.) that targets >20% energy usage reduction. Document everything and coordinate with the rebate program for the rebate application. The good news: rebates are paid upfront or at project completion, not waiting until tax time, which is a great selling point.

High-Efficiency Electric Home Rebate (HEAR Program for Electrification)

The IRA also created the High-Efficiency Electric Home Rebate Act (HEEHRA) program, which New York refers to as the Home Electrification and Appliance Rebate (HEAR) program. This is a major electrification rebate program aimed at helping low- and moderate-income households electrify their homes (swap out fossil-fueled equipment for efficient electric alternatives). These rebates are designed to be provided at point-of-sale as upfront discounts – meaning your customers could receive the rebate immediately when you install qualifying equipment, rather than waiting. Here’s the rundown:

Federal Program Quick Reference: For convenience, here’s a summary of the federal incentives:

Program (Federal) What It Offers Key Eligibility Energy Efficient Home Improvement Tax Credit (30% credit, Section 25C) Up to $1,200/year for efficiency upgrades (plus $2,000 for heat pumps) – e.g. insulation, efficient HVAC, windows, doors, audits ([Energy Efficient Home Improvement Credit Internal Revenue Service](

)) ([Energy Efficient Home Improvement Credit HOMES “Home Efficiency” Rebates (IRA §50121) $2,000 rebate for ~20% home energy savings; $4,000 for ≥35% savings (covers up to 50% of project cost). Double those amounts ($4k/$8k) if low-income household (). These are upfront rebates (administered by state). Home retrofits must achieve significant energy reduction (modeled or measured). Open to homeowners (1-4 unit homes); larger rebates only for income <80% AMI. In NY, program launching via NYSERDA in 2024–2025. Likely requires energy audit and use of participating contractors/program approval. HEAR “Electrification” Rebates (IRA §50122, HEEHRA) Up to $14,000 in combined rebates for electrification: e.g. $8,000 for heat pump HVAC, $1,750 for heat pump water heater, $840 for electric stove, $840 for heat pump dryer, $4,000 for panel upgrade, $2,500 for wiring, $1,600 for insulation ([Home Electrification and Appliances Rebate Program ENERGY STAR]()). Given as point-of-sale discounts.

As you can see, these federal programs can significantly buy down the cost of projects. Now let’s look at what New York State offers on top of this.

New York State Incentives and Programs (NYSERDA & Utility Programs)

New York has long-standing clean energy programs that complement the federal incentives. In fact, NYSERDA emphasizes that the IRA incentives don’t replace New York’s programs – “they enhance them” (

). By stacking federal and state incentives, your customers can save even more. Here we outline New York-specific rebates, credits, and financing available in 2025, along with how they work:

NYSERDA EmPower+ (Income-Eligible Efficiency and Electrification)

For customers who meet income guidelines, EmPower+ is New York’s flagship program to provide free or reduced-cost energy upgrades. It’s run by NYSERDA and focuses on helping low- and moderate-income households improve efficiency and switch to clean energy:

  • What EmPower+ Provides: Eligible homeowners (and renters in 1-4 unit buildings, with landlord cooperation) can receive no-cost energy efficiency improvements such as insulation, air sealing, heating system upgrades, LED lighting, and more. As of 2024, low-income single-family households can get up to $10,000 worth of upgrades fully paid by the program, and moderate-income households can get up to $5,000 covered at no cost (). These incentives prioritize critical measures that save energy and improve health/safety (for example, sealing drafts and insulating attics).
  • IRA Expansion (HEAR Rebates Integration): With the infusion of federal IRA funds, EmPower+ has been expanded to cover certain electrification projects as well. New York essentially channeled the federal HEAR rebates into EmPower+ for low-income participants. This added funding provides additional rebates on top of the $10k/$5k caps for specific high-efficiency equipment (). For instance, an EmPower+ eligible household can now also get up to $8,000 for a heat pump, $1,750 for a heat pump water heater, $4,000 for an electric panel upgrade, $2,500 for wiring, and $1,600 for insulation – these figures align with the HEAR program caps () (). In practice, this means many low-income projects (which often involve switching from old oil furnaces to heat pumps, for example) can be done with little to no cost to the customer.
  • No-Cost Energy Assessments: EmPower+ starts with a free home energy assessment for eligible households (). A certified contractor will evaluate the home’s energy usage, identify improvements, and check for any health and safety issues. As a participating contractor, you might be the one conducting these audits. This assessment is a great trust-building opportunity with customers.
  • Eligibility: EmPower+ is geared toward low-income (typically <60% of state median income) and moderate-income (<80% of median) New Yorkers – the exact income thresholds vary by household size and are published by NYSERDA (). For example, a family of four in NY might qualify as moderate income if they earn under a certain amount (check NYSERDA’s latest income chart). Those eligible can apply through NYSERDA, which will then assign a contractor from its network.
  • Contractor Participation: To work on EmPower+ projects, you must be a NYSERDA-approved EmPower contractor (usually BPI-accredited, etc.). If you’re in the home performance business, getting into this network can provide you with leads directly from NYSERDA. It also means you’ll be doing a lot of good in your community. You perform the work and get paid by the program for the portion covered by incentives. (Customers get the work done free or with minimal co-pay if it exceeds the cap.)

Quick tip: If you encounter a homeowner who clearly has an old, inefficient home and limited income, refer them to EmPower+ (or help them apply). It can fully fund measures that also prepare the home for additional upgrades – for example, EmPower can pay for insulation and air sealing, which not only lowers bills but also makes a future heat pump work more effectively. EmPower+ essentially allows you to deliver a comprehensive solution in stages, funded by grants.

NYS Clean Heat Program (Utility Rebates for Heat Pumps)

New York State has aggressive clean heating and cooling goals, and the NYS Clean Heat program is a collaborative effort by NYSERDA and the utilities to incentivize heat pump installations. If you’re an HVAC contractor, this is probably very familiar – but let’s summarize:

  • What is NYS Clean Heat: It’s a rebate program for heat pumps (air-source, ground-source, and heat pump water heaters) available to customers of the major electric utilities (Con Edison, National Grid, NYSEG, RG&E, Orange & Rockland, Central Hudson, etc.). When a homeowner installs a qualifying heat pump system through a participating contractor, they can receive a rebate to offset the cost. These rebates are funded by the utilities per state targets (with coordination by NYSERDA).
  • Rebate Amounts: The incentive levels depend on the type of system and the size/capacity. Typically:
    • For air-source heat pumps (ASHP): rebates might range from a few hundred dollars for a partial-load/minisplit install to a few thousand dollars for a whole-home system. For example, in Con Edison territory a whole-home cold-climate heat pump replacing central AC and furnace could get around $5,000. NYSERDA indicates statewide averages like $100–$400 for partial systems and $2,000–$3,000 for whole-home systems in rebates ().
    • For ground-source (geothermal) heat pumps: incentives are higher, often several thousand dollars per home. NYS Clean Heat can provide roughly $7,000–$9,000 on average for a typical residential geothermal install () (again, this varies by utility and system size).
    • Heat pump water heaters also have rebates, usually on the order of $700–$1,000 ().
    • These are average figures – always check the specific utility’s rebate schedule. Some utilities structure it per 10,000 BTU of heating capacity or per unit installed.
  • How to Get Rebates: The contractor typically handles the application to ensure the customer gets the rebate. As a participating contractor, you’ll submit the project details (equipment info, efficiency ratings, etc.) to the utility or program implementer. The rebate can often be assigned to you (to apply as an instant discount on the invoice) or sent as a check to the customer later. Many contractors advertise the after-rebate price to make the offer more attractive – e.g. “Install a heat pump for as low as $X after utility rebates!”
  • Contractor Requirements: You must be an approved NYS Clean Heat contractor with the specific utility. This often entails having appropriate certifications (for instance, many require at least one tech with BPI or NATE certification, or training on the specific heat pump brands). Utilities maintain lists of participating contractors and often require some QA on your installs. If you’re not already signed up, you should do so – it’s usually a straightforward process and being on the list means customers can find you through the program’s “find a contractor” search.
  • Combining with Federal: The state/utility rebates can stack with the federal incentives. For example, a homeowner could get a $5,000 rebate from Con Ed for a heat pump, and claim the $2,000 federal tax credit, and if income-eligible possibly get additional IRA rebate money. There’s no double-dipping concern because one is a rebate and one is a tax credit (and potentially another is a separate rebate). This stacking can often make an efficient heat pump cheaper than a furnace/AC replacement in net cost. It’s a strong selling point in 2025.

Comfort Home Program (NYSERDA Home Weatherization Incentives)

To address the building envelope (which is just as important as HVAC), NYSERDA introduced the Comfort Home Program. This is especially relevant for home performance contractors or HVAC companies that also do insulation/air-sealing or work closely with insulation contractors:

  • What Comfort Home Offers: It provides tiered incentives for “seal and insulate” packages and high-performance window upgrades for single-family homes across New York () (). The idea is to encourage homeowners to invest in comprehensive envelope improvements that reduce energy waste and improve comfort (e.g. eliminating drafts, adding insulation to meet modern standards). Comfort Home has pre-defined packages (levels of insulation + air sealing, with options for window improvements) and offers rebates based on the package achieved.
  • Incentive Amounts: Depending on the scope, rebates range roughly from around $1,000 up to $4,000 per home (). For example, a basic air sealing and attic insulation package might net a homeowner ~$1k, while a more extensive whole-home insulation (attic + walls) plus perhaps basement sealing could be a few thousand dollars. If high-efficiency windows are included as part of an upgrade package, there may be additional incentive or bonus. The exact amounts and packages are detailed by NYSERDA; the program was a pilot and may evolve, so check the latest guidelines.
  • Contractor Participation: Comfort Home is delivered through a network of qualified Comfort Home contractors. These are typically BPI-certified insulation and home performance contractors who have undergone training on the program. If you want to offer these incentives to your customers, you’ll need to become a participating contractor (NYSERDA provides info on how to qualify) (). Being in the network also means NYSERDA might refer interested homeowners to you.
  • How it fits in: This program is a great complement to HVAC upgrades. Improving insulation and air sealing can reduce the size of heat pump needed and improve its effectiveness – that’s why NYSERDA incentivizes it. As a contractor, you might pitch a combined approach: use Comfort Home incentives for insulation, then use Clean Heat for a heat pump. And don’t forget the federal tax credit also gives 30% back on insulation and windows (up to that $1,200 cap) (), which can stack on top of the Comfort Home rebate. This holistic strategy can be very attractive to homeowners looking to lower their bills and increase comfort.

Note: New York State also mandates that every homeowner can get a free or low-cost energy audit, even if they aren’t low-income. In fact, all New York residents are eligible for a no-cost home energy assessment to see how their home is performing and what upgrades make sense (

). Comfort Home is one avenue for that (it starts with an assessment by the participating contractor). Even outside of Comfort Home, NYSERDA’s Residential Energy Audit program (previously Green Jobs-Green NY energy assessments) offers free audits, especially if the homeowner plans to do work. Encourage homeowners to take advantage of these audits – it’s often the gateway to getting them on board with improvements (and it’s a way for you to get a foot in the door to provide a proposal).

NY-Sun Solar and NYS Tax Credits for Solar/Geothermal

While your focus may be HVAC and efficiency, it’s worth knowing about New York’s incentives for renewable energy systems in case you do solar or geothermal (or partner with those who do):

  • NY-Sun Incentives (Solar PV): NYSERDA’s NY-Sun program provides upfront rebates for solar photovoltaic installations. The rebate amount varies by region and utility and declines as more solar is installed (block program), but as of 2025 many areas of NY still have incentives. On average a residential 6 kW solar array might get around $1,200–$2,400 off via NY-Sun (). This is often handled by the solar installer, but if you’re branching into solar or working with one, be aware of it. New York also exempts solar installations from state sales tax and some local property taxes.
  • State Tax Credits: New York offers a state personal income tax credit for certain clean energy installations:
    • For solar PV and solar thermal systems: a credit of 25% of the project cost, up to $5,000 cap, is available to homeowners (). This is in addition to the federal 30% solar tax credit.
    • For geothermal heat pump systems: similarly, 25% of cost up to $5,000 state tax credit is available (). This can stack with the federal 30% geothermal tax credit and the NYS Clean Heat rebate for geothermal – a powerful combination if you install ground-source heat pumps.
    • (New York does not currently have a state tax credit for standard efficiency upgrades or air-source heat pumps – instead they support those via the rebate programs described above.)
  • Electric Vehicles and Chargers: As an aside, NY also has incentives for EVs (the Drive Clean Rebate of up to $2,000 off an electric car) and a rebate for at-home EV chargers in disadvantaged communities (). This might not directly impact your HVAC business, but if you do electrical work or panel upgrades, you might mention to customers planning for EV charging that there are incentives in that arena too.

Affordable Financing: Green Jobs – Green NY Loans

Even with all the rebates and credits, some customers will need help financing the remaining out-of-pocket costs of projects. New York, through Green Jobs – Green New York (GJGNY), offers low-interest financing options that you can offer to homeowners:

  • Residential Smart Energy and On-Bill Recovery Loans: NYSERDA’s Residential Financing Programs include: These loans can cover most clean energy improvements: insulation, HVAC, heat pumps, solar, etc.
  • Loan Terms: Homeowners can borrow from $1,500 up to $25,000 (and up to $50,000 in some cases for certain projects) with terms of 5, 10, or 15 years (). The interest rates are typically below market rates for those who qualify, and they may have tiers based on income (e.g., lower interest for moderate-income households to improve affordability). Interest rates are subject to change, but as a reference, they’ve often been in the ~3%–9% range depending on the applicant’s credit and income – much better than a credit card or personal loan.
  • On-Bill Convenience: The On-Bill Recovery option is popular because the customer doesn’t have to manage a separate bill – the loan payment just appears on their electric or gas utility bill each month (). Importantly, the loan is tied to the meter, not the individual, so if the property is sold, the new owner can (with disclosure) take over the payments as long as they continue paying that utility bill. This can be a selling point for upgrades in a home someone might sell in a few years.
  • How to Use: As a contractor, you can offer this financing to your customers. NYSERDA has an online portal where homeowners (with your help, if needed) can apply for the loan. You as the contractor might need to be listed in their system to be paid from loan proceeds. The loan funds can be disbursed directly to you upon project completion. Essentially, the state pays you, and the homeowner repays the state via the utility bill.
  • Combining with Incentives: Customers can absolutely use financing for the balance of project costs after incentives. For example, if a project is $15,000, and incentives (rebates + tax credits) cover $5,000 of it, the homeowner could take a $10,000 loan for the rest. Emphasize that with the energy savings from the project, the monthly utility bill reduction plus financing payment might be close to their old bill – making the upgrade cash-flow neutral or positive. NYSERDA often ensures that for larger loans, the projected energy savings are at least as much as the loan payments () (they have underwriting guidelines linking loan amount to savings for energy projects).
  • Selling point: The availability of low-interest, long-term financing can turn a “I can’t afford that upfront” customer into a sale. It’s not a rebate, but it’s an important incentive in its own way. Many small business contractors in NYS use this as a tool to close deals – you can advertise “financing as low as $X/month” for a given type of project.

Summary of NY State Programs

Here’s a quick reference table for the New York–specific programs we covered:

Program (NY State) Type/Benefit Eligibility & Notes EmPower+ (NYSERDA) – Low-Income Energy Efficiency Grant/Rebate: Up to $10,000 (low-income) or $5,000 (moderate-income) worth of free home energy improvements (

). Plus additional IRA-funded rebates (heat pumps up to $8k, etc.) for eligible projects () (). Homeowners or renters in 1-4 unit homes. Low income ≈ <60% State Median Income; moderate ≈ <80%. Must go through NYSERDA application. Work done by certified EmPower contractors; includes free energy audit. NYS Clean Heat (Utility Program) – Heat Pump Rebates Rebate: Incentives for installing air-source, ground-source heat pumps, or heat pump water heaters. Amounts range ~$100–$400 for partial systems to $2,000–$9,000 for whole-home systems () () (varies by utility and system size). Available to all utility customers statewide. No income limits. Equipment must meet efficiency criteria (e.g. ENERGY STAR, cold-climate specs). Must use a participating contractor who will handle rebate paperwork. Often provided as an upfront discount or post-install rebate. Comfort Home (NYSERDA) – Weatherization Packages Rebate: $1,000–$4,000 (approximately) for comprehensive insulation + air sealing packages; additional incentives for window upgrades (). Aims to cover a portion of “seal and insulate” project costs. 1-4 family homeowners, any income (market-rate). Encourages whole-house approach. Work must be done by NYSERDA-approved Comfort Home contractors. Can be combined with federal 25C tax credit for insulation/windows. Starts with a free/low-cost assessment. NY-Sun Solar PV Incentive Rebate: Varies by region ($/Watt). Typical NY-Sun incentive might be ~$0.20–$0.40/W, totaling ~$1k–$3k for an average home system (). Phases out as targets are met. Homeowners (or businesses) installing solar with a participating installer. Available until funding is exhausted in each region. Stacks with 30% Federal Solar Tax Credit and NY Solar Tax Credit. NY State Tax Credits (Residential) Tax Credit: 25% of project cost up to $5,000 for solar PV/thermal, and similarly 25% up to $5,000 for geothermal heat pump systems () (). (Also, up to $2k for EV purchase, not related to home energy directly.) Taxpayers who install qualifying systems on their primary residence in NY. Can be claimed on NY State income tax return (Form IT-255 for solar, IT-256 for geothermal). Can carry over unused credit up to 5 years. NYSERDA GJGNY Financing (Smart Energy/On-Bill Loans) Financing: Loans of $1,500–$25,000 for 5, 10, or 15 years () at subsidized interest rates (check current rates). On-Bill option lets repayment through utility bill. No upfront cost for customer; fixed monthly payments. Homeowners with acceptable credit (minimum FICO ~640) and debt-to-income ratio. Project must involve eligible measures (energy efficiency, renewable or electrification improvements). Contractor must be participating in the program. Helps customers afford larger projects by spreading cost over time ().

New York’s ecosystem of programs can seem complex, but you don’t need to use all of them every time. The key is to identify which incentives stack for a given project. For instance, a moderate-income homeowner converting from oil heat to an air-source heat pump could leverage: a utility Clean Heat rebate, the $2,000 federal tax credit, and possibly a low-interest loan for the remainder – while also getting a free energy audit via NYSERDA. A low-income homeowner might go through EmPower+ and get most costs covered upfront by NYSERDA (with IRA funds embedded), and you could then help them claim a federal credit if applicable. As a contractor, knowing these options makes you a problem solver and a savings hero for your clients.

Eligibility Guidelines for Contractors and Customers

With so many programs, it’s critical to understand who qualifies for what. Here we break down key eligibility points – both for the homeowner (customer) and any contractor requirements – for the incentives discussed:

  • Federal Tax Credits (Energy Efficient Home Improvement Credit & Residential Clean Energy Credit): These credits are available to any homeowner (there are no income limits) who owns the home and incurs the cost of qualifying improvements in that tax year. The home must be the taxpayer’s residence (rentals have separate rules). The homeowner claims the credit on their tax return, so they need taxable income to benefit. Contractors don’t need any special certification for the homeowner to claim a tax credit – however, from 2025 onward, you should provide the customer with the manufacturer’s certification and product ID for any equipment (like heat pumps) because the IRS requires those details (). Ensure the products you install meet the efficiency criteria (e.g. ENERGY STAR® Most Efficient for certain HVAC) so the credit is valid. In short, every homeowner can potentially claim these credits, as long as the upgrade qualifies and they save receipts/manufacturer docs.
  • HOMES Rebate (Home Efficiency Rebates): This is open to homeowners of existing houses (including multifamily buildings, with per-unit rebates). There is no general income restriction to participate, but income affects the rebate amount – only households below ~80% AMI get the doubled rebates (). Higher-income households can still get the base rebates. The main eligibility factor is achieving the required energy savings (20% minimum) which must be verified via modeling or measurement. A contractor will likely need to coordinate an energy audit and submit documentation to the state program. Contractor eligibility: States may require that either the contractor or energy auditor is approved by the program (for QA purposes). In NY, expect that BPI-certified contractors or Home Performance contractors will be the ones implementing HOMES rebates. If you’re not in that world yet, consider partnering with an energy auditor or getting BPI certified so you can directly participate. Also, note that rental properties can use this too, which could be a market (landlords often need guidance here).
  • HEAR Rebates (High-Efficiency Electrification Rebates): These are strictly income-limited to low/moderate income households (≤150% AMI) (). So first, determine if your client qualifies: roughly, 150% AMI in NYC for a family of four is around $180k; upstate it might be lower – check HUD AMI tables. If they are above that, they can’t get these rebates (but could still use tax credits or other programs). If they are below, the rebate covers 50% or 100% of costs depending on whether they’re above or below 80% AMI (). Also, the rebate is only for switching from non-electric to electric – e.g. replacing a gas furnace with a heat pump, or an electric resistance stove with an induction stove doesn’t count (must replace fossil fuel appliance or be a first-time appliance in the home) () (). Contractor eligibility: To offer point-of-sale rebates, you must be an approved participating contractor/retailer in the state’s rebate program. NYSERDA will likely publish a list or application for contractors. Make sure to sign up so you can directly apply the discount and get reimbursed. You’ll also need to follow whatever verification process for customer income (possibly an intake form or checking an eligibility database).
  • NYS EmPower+ (Low/Mod Income): Homeowners (or tenants) must fall under the income limits (which NYSERDA sets annually; for example, 80% AMI for moderate-income assistance) (). Typically, if a household already receives HEAP, SNAP, or other assistance, they qualify automatically. EmPower is generally for primary residences. Contractors must be in the EmPower program – that means being BPI accredited and signing a participation agreement with NYSERDA. If you’re not an EmPower contractor, you can’t directly do EmPower projects; however, you could refer the client to NYSERDA and possibly get into the program in the future. EmPower also prioritizes certain measures (they won’t, for example, buy someone solar panels or new windows unless core efficiency needs are met).
  • NYS Clean Heat (Utility Rebates): Any residential utility customer replacing or adding eligible equipment can get these rebates. There are no income requirements and even landlords or owners of vacation homes can qualify if the utility offers it. The key eligibility is technical – the heat pump must meet efficiency standards (like a minimum HSPF rating, cold-climate certification for certain areas, etc.), and it often must displace the primary heating system (some programs require you decommission the old fossil system for full rebate). Contractor eligibility: You must be on the list of participating contractors for that utility. Each utility’s program manual outlines contractor requirements (e.g. proper licenses, insurance, training). If you operate in multiple utility areas, you may need to enroll separately for each. The good news is these programs are well-established, so if you’re doing HVAC in NY, chances are you’re already involved. Just remember to keep any required certifications up to date and follow the QA guidelines (some installs may be inspected).
  • Comfort Home (NYSERDA Weatherization): Homeowners of 1-4 unit existing homes are eligible; there’s no specific income limit (it’s aimed at market-rate, since low-income would go through EmPower). Homes that are extremely inefficient (e.g. very poor insulation levels) will benefit most and likely qualify for the packages. Contractor eligibility: Only contractors who have been trained and approved by NYSERDA for Comfort Home can offer those specific rebates. So if you’re primarily HVAC, you might need to partner with an insulation contractor in the program, or consider expanding your business to include home performance work. Also, the home must meet all the requirements of a chosen package to get the incentive (for example, you can’t claim the incentive if you only do half the recommended insulation – it’s an all-or-nothing package approach) ().
  • NYSERDA Financing (Loans): Homeowners need to meet credit criteria (minimum credit score and debt-to-income rules). There’s also a requirement that the estimated energy cost savings should offset the loan payments for loans above a certain size () – this is to ensure projects “pay for themselves.” In practice, most typical projects qualify. Contractors need to be familiar with the loan process: you may need to provide the customer with a project proposal detailing the savings, and you or the customer will fill out a loan application either online or via a paper form. Contractors do not necessarily need a special certification for the loan program, but you should register with NYSERDA so that when a customer selects their contractor on the loan application, your company is in the system. Also, be prepared to give the customer any documentation needed (like proof of cost, and sign a certificate of completion later so NYSERDA knows to pay you).

In summary, match the customer to the right programs. Low-income households unlock different resources (EmPower, HEAR rebates) than higher-income ones. And ensure you meet any program participation requirements as a contractor – this might mean getting onto approved lists or partnering with those who are. The effort is worthwhile because it expands the pool of incentives you can offer your clients.

Step-by-Step: Leveraging Incentives in Customer Conversations and Lead Generation

Knowing about incentives is one thing – using them effectively to grow your business is another. Here’s a step-by-step guide for HVAC and home energy contractors to put all this information into action. These steps will help you incorporate rebates and credits into your sales process, marketing, and project execution, ensuring both you and your customers get the maximum benefit.

  1. Stay Informed and Educate Yourself – Make sure you’re up-to-date on all relevant programs. Dedicate time to read official guidance and updates from the IRS, DOE, and NYSERDA. Bookmark key resources like the IRS’s energy credit FAQ and NYSERDA’s IRA incentive page. Use tools like the EPA’s online IRA rebate finder or Rewiring America’s incentives map for New York to quickly check what a given household may qualify for () (). The better you understand the fine print, the more confidently you can discuss options with customers. (Consider designating an “incentives champion” on your team who keeps track of program changes, income limit charts, etc., and briefs everyone else.)
  2. Identify Customer Eligibility Early – When a lead comes in, gather a bit of information up front to triage which incentives might apply. For example, ask if they are concerned about upfront cost and if they might qualify for income-based programs (in a tactful way, such as “Various programs are available based on income, home type, etc. – do you know if you fall under any income thresholds for energy assistance programs?”). Also find out what fuel their current systems use (to know if electrification rebates are in play) and whether they’ve done any prior upgrades (affects how much energy savings you can achieve). Using this info, you can immediately zero in on the most relevant incentives. For instance, a senior on a fixed income in an old home might be a great candidate for EmPower+ and HEAR rebates, whereas a higher-income client might utilize tax credits and utility rebates instead.
  3. Explain the Incentives in Plain Language – In your sales conversations, frame incentives as customer benefits (not just technical programs). For example: “There’s a new federal program that will give you an upfront rebate of $8,000 on this heat pump because you currently heat with oil and meet the income criteria – that covers about half the cost right away!” or “New York State will actually pay for around $3,000 of the insulation work through its Comfort Home rebate, and then you’ll get 30% back on your taxes – so you save twice.” Keep it simple and focused on dollars saved or lower monthly bills. Avoid overwhelming the homeowner with acronyms. Tailor the message to what they care about (e.g. affordability, eco-friendliness, comfort). Show before-and-after scenarios: “Without incentives, this project would cost $XX, but with the programs available, your net cost comes down to $YY.”
  4. Incorporate Incentives into Your Proposals – A best practice is to present a written proposal or quote that clearly itemizes available incentives. You can have a line like “Utility Rebate – ($2,000)” and “Estimated Federal Tax Credit – ($1,200)” subtracting from the project cost to show a discounted net cost. You might even present two versions: one with all qualifying upgrades (to maximize rebates) and one with fewer upgrades, to illustrate the value of going for the comprehensive package. Seeing a higher initial price tag become a much lower net cost can convince a homeowner to proceed with the better, more efficient solution. It essentially frames the incentives as a limited-time deal on a premium upgrade. Make sure to note any steps the homeowner must do (for tax credits, “to be claimed on your 2025 tax return”; for loans, “subject to credit approval”). This transparency builds trust.
  5. Streamline the Application/Paperwork Process – One reason homeowners may not take advantage of programs is the perceived hassle. As their contractor and project guide, take on as much of the incentive paperwork as possible:
    • For utility or NYSERDA rebates: handle the forms and submissions on the customer’s behalf. Most Clean Heat contractors already do this. Just ensure you get the customer’s signature where needed and any necessary documentation (old equipment proof, etc.).
    • For federal tax credits: provide a summary letter or certificate at job completion that states the equipment installed, any efficiency ratings, and references to the IRS criteria. For example, “Installed one ABC Company Model XYZ Heat Pump (Meets CEE Tier 1 criteria, Manufacturer’s Certification Statement attached). This product is eligible for a $2,000 federal tax credit under IRC 25C.” This makes it easy for the customer (and their tax preparer) to claim the credit. The IRS also has an Energy Efficient Home Improvement Credit FAQ – you can print relevant Q&A for them or email links ().
    • For income-based programs: assist the customer in filling out income verification forms if needed. EmPower+, for instance, might require pay stubs or proof of benefits – offer to help compile and submit these. The easier you make it, the more likely the customer will follow through and the project will move forward (and you get paid by the program).
    • Follow up on rebate statuses for the customer. If a utility rebate takes 8 weeks to arrive, maybe drop a note to the client at week 8 asking if they’ve received it, and offer help if not. This kind of service builds goodwill (and referrals).
  6. Use Incentives in Your Marketing & Lead Generation – Don’t wait for customers to ask – be proactive in your outreach. Update your website to highlight these 2025 incentives: e.g. a banner that says “Upgrade to a Heat Pump in 2025 with up to $10,000 in rebates and tax credits!”. Create a simple incentives checklist or infographic to use in social media posts or email newsletters. Target messaging to seasons (talk about insulation and heating upgrades as winter approaches, cooling and heat pump incentives in spring, etc.). You can also host a free “Energy Incentives Webinar” or a local workshop for homeowners – positioning yourself as an expert. Consider partnering with town community groups or libraries to give a short talk on “How to Save on Home Energy Upgrades in 2025”. By educating the public, you attract new leads. Many people still don’t know about these new IRA programs – being the one to inform them builds trust from the get-go.
  7. Leverage Contractor Networks and Support – Take advantage of the fact that NYSERDA, utilities, and even the EPA are actively promoting these programs and often referring customers to contractors. Ensure your business is listed in the relevant directories (e.g. NYSERDA’s Find a Contractor listings for heat pumps, Comfort Home, or the Home Performance network ()). If you qualify, join the NYS Clean Heat contractor network for each utility service area you operate in. NYSERDA also has cooperative marketing materials – check if they have flyers or content you can co-brand. Furthermore, the EPA’s EnergyStar program has a new Home Upgrade Service initiative connecting consumers with qualified contractors (). Keep an eye on such opportunities and sign up if applicable. Being part of these networks can passively generate leads – e.g. a homeowner might go to NYSERDA’s website or call a utility asking for heat pump info, and then get directed to contractors like you.
  8. Highlight Success Stories and Testimonials – Once you start completing projects that utilized incentives, ask those happy customers for reviews or testimonials that mention the savings. For example, a quote like: “XYZ Heating helped me replace my old furnace with a heat pump. They found me $5,000 in rebates and my out-of-pocket cost was half of what I expected. My utility bills are already lower – thank you!” Such stories, shared on your website or social media, reinforce the message that you make projects affordable. This encourages new customers to reach out thinking, “I want that deal too.” It also subtly pressures competitors who maybe aren’t as up to speed on incentives.
  9. Stay Organized and Up-to-Date – Finally, make sure your team stays on top of the evolving incentive landscape. Assign someone to check for updates at least monthly – for instance, program funding statuses (ensure, say, that NY-Sun still has funds in your region before promising a rebate), changes in rebate amounts, or new programs launching. Join email lists – NYSERDA has newsletters for contractors, and DOE sends out updates on IRA programs. By staying current, you can adjust your sales strategy accordingly. (For example, if you hear that a certain utility’s rebate budget is nearly spent, create urgency with customers in that area to act now.) Also maintain a cheat sheet for your sales staff with the latest incentive amounts and eligibility so they don’t inadvertently give outdated info.

By integrating these steps into your daily operations, you’ll find that incentives and rebates become a natural part of your sales conversation. Instead of selling an HVAC upgrade, you’re selling a solution that comes with built-in savings and support. Customers will appreciate the extra value and hand-holding, and that translates into more signed contracts for you. It’s truly a win-win: homeowners save money and get a better home, and you generate more business by unlocking public incentive dollars.

Conclusion

In 2025, clean energy incentives are supercharging the HVAC and home performance industry – especially in New York State. As a contractor, you have an unprecedented toolkit of rebates, tax credits, and programs to help homeowners finally tackle that inefficient furnace, add insulation, or invest in a heat pump. By understanding both federal and state offerings, and by communicating them effectively, you become not just a service provider but a trusted advisor who can turn expensive projects into affordable no-brainers for your clients.

New York’s push for clean energy, combined with federal support, means there’s more funding on the table than ever before to help people upgrade their homes. Contractors who navigate these programs successfully will not only close more sales but also build lasting customer relationships (and referrals) based on genuine value. So take this guide, share it with your team, and embrace the incentive-powered approach to home energy upgrades. Here’s to helping your customers save money, energy, and the planet – and to the growth of your business in the process. Good luck, and feel free to refer back to this guide and the linked resources as you make 2025 a banner year for clean energy projects in New York!

Sources:

Guide to clean energy incentives and rebates for NY HVAC and home energy contractors (2025)