Austin Energy HVAC Rebates 2026: Complete Guide for Homeowners

If you're an Austin Energy customer and your HVAC system is getting up there in age, 2026 is one of the best years to replace it. Austin Energy HVAC rebates currently cover $350 to $750 per system depending on what you install, and when you layer in federal tax credits, manufacturer promotions, and the Home Energy Savings bundled program, the total savings can reach nearly $6,000. That's real money off what most homeowners consider the single biggest home improvement investment they'll make in a decade.

This guide breaks down every rebate available to Austin homeowners right now, the exact equipment and efficiency requirements you need to meet, the application process step by step, and how to stack multiple incentives together for the biggest possible discount on a new AC or heat pump system.

How Austin Energy HVAC Rebates Work

Austin Energy runs one of the most generous municipal utility rebate programs in Texas. The program is designed to reduce peak electricity demand across the grid by encouraging homeowners to install higher-efficiency HVAC equipment. In exchange for upgrading to qualifying systems, Austin Energy pays you a direct rebate after installation.

The rebate amounts depend on two things: the type of equipment you install and its efficiency rating. Air conditioners and heat pumps each have their own rebate tiers, with heat pumps offering significantly larger rebates because they provide both heating and cooling in a single system.

Here's the current breakdown.

Air Conditioner Rebates

For central air conditioning replacements, Austin Energy offers rebates ranging from $350 to $500. To qualify, your new system must meet minimum SEER2 and EER2 efficiency ratings, and it must replace an existing system that is at least 10 years old.

Heat Pump Rebates

Heat pumps receive the largest Austin Energy rebates because they handle both cooling and heating, reducing overall energy consumption. The program uses a three-tier structure based on SEER2, EER2, and HSPF2 ratings.

The difference between Tier 1 and Tier 3 is $300 in rebate value, but the real savings show up on your electric bills. A Tier 3 heat pump will use roughly 20 to 25 percent less energy than a Tier 1 system. Over a 15-year lifespan in Austin's climate, that adds up to thousands of dollars.

Pro Tip: If you're on the fence between a standard AC and a heat pump, run the numbers with your contractor. Heat pumps qualify for higher Austin Energy rebates, larger federal tax credits, and often come with better manufacturer promotions. For most Austin, TX homeowners, a heat pump ends up being the better long-term investment.

Smart Thermostat Rebates

Austin Energy also offers $50 to $100 in rebates for installing a qualifying smart thermostat. If you're already replacing your HVAC system, adding a smart thermostat to the project is a no-brainer. It improves system efficiency, gives you better temperature control, and the rebate helps offset the cost.

Qualifying thermostats must be ENERGY STAR certified and Wi-Fi enabled. Popular models from Ecobee, Google Nest, and Honeywell typically qualify.

The Home Energy Savings Bundled Program

This is where the city of Austin energy rebates get really interesting. Austin Energy runs a program called Home Energy Savings that rewards homeowners who take a whole-home approach to energy efficiency. If you're already replacing your HVAC system, enrolling in this program within six months of installation can unlock significantly more money.

Here's how it works:

• Additional $200 bonus just for enrolling in the program after your HVAC replacement
• Up to $2,000 more in rebates for whole-home upgrades like insulation, air sealing, and duct improvements
• Average total savings around $3,000 when combining the HVAC rebate with the bundled program

The whole-home approach makes sense from an engineering standpoint, too. Installing a brand-new high-efficiency heat pump in a house with leaky ducts and no attic insulation is like putting premium tires on a car with a cracked windshield. You'll see some improvement, but you're leaving a lot of performance on the table.

Eligibility Requirements

Not every HVAC installation qualifies for Austin Energy rebates. The program has specific requirements that must be met before a rebate will be approved. Missing even one of these can result in a denied application, so it's worth understanding them before you sign a contract.

Home and System Requirements

• Your home must be at least 10 years old
• The existing HVAC system being replaced must be at least 10 years old
• You must be a current Austin Energy residential customer with an active account
• The property must be within the Austin Energy service territory

Installation Requirements

• All work must be performed by a participating Austin Energy contractor
• All components must be replaced as a complete system (outdoor unit, indoor coil, and air handler or furnace)
• The system must be sized using ACCA Manual J load calculations, not rules of thumb
• A post-installation inspection by Austin Energy or their designated inspector is required
• Your rebate application must be submitted within 90 days of the installation date

What "All Components Replaced" Actually Means

This trips up more homeowners than you might expect. Austin Energy requires a complete system replacement, not a partial upgrade. If your outdoor condenser fails and you want to keep the existing indoor coil and air handler, you won't qualify for the rebate.

There's a good technical reason for this. Mixing old and new components reduces system efficiency, often significantly. A new 17 SEER2 condenser paired with a 12-year-old evaporator coil won't actually perform at 17 SEER2. The system has to be matched to deliver its rated efficiency, and Austin Energy's inspectors verify this.

Why Manual J Sizing Matters

ACCA Manual J is the industry standard for calculating how much heating and cooling capacity a home actually needs. It accounts for your home's square footage, insulation levels, window types and orientation, ceiling height, number of occupants, and local climate data.

Too many contractors still size systems based on the old "one ton per 400 square feet" rule, which almost always results in an oversized system. An oversized AC cycles on and off too frequently, wastes energy, fails to properly dehumidify, and wears out faster. Austin Energy requires Manual J sizing specifically to prevent this.

At CG Service Pros, we run Manual J calculations on every installation. It takes a little more time upfront, but it means your system is right-sized for your home, which translates to better comfort, lower bills, and longer equipment life.

Federal Tax Credits: The Inflation Reduction Act (25C)

The federal government offers its own set of incentives through the Inflation Reduction Act, specifically Section 25C, the Energy Efficient Home Improvement Credit. These are tax credits, not rebates, meaning they reduce your federal tax liability dollar for dollar.

Here's what's available for HVAC equipment in 2026:

A few important details:

1. Heat pumps get their own $2,000 category. This is separate from other home improvement credits, so a heat pump installation can claim up to $2,000 on its own.
2. Central AC falls under the general $1,200 annual cap for energy efficiency improvements, with a per-item limit of $600.
3. Credits reset annually. You can claim up to $3,200 every tax year, which matters if you're doing phased upgrades.
4. These stack with Austin Energy rebates. There is no conflict between local utility rebates and federal tax credits. You can claim both on the same installation.

You'll need to file IRS Form 5695 with your tax return and keep your installation invoices and manufacturer certification statements. Your tax preparer can walk you through the specifics.

Manufacturer Rebates and Promotions

On top of Austin Energy rebates and federal tax credits, major HVAC manufacturers run their own seasonal promotions. These vary throughout the year and typically require installation by an authorized dealer.

Manufacturer rebates change quarterly, and the best offers usually appear in spring (before the cooling season rush) and fall (when demand slows). The amounts above reflect recent maximum values, but the specific promotions available when you're ready to buy may differ.

Pro Tip: Don't choose your HVAC system based solely on which manufacturer is running the biggest rebate this month. The right system for your home depends on sizing, efficiency goals, warranty terms, and your contractor's experience with that brand. A $500 rebate on the wrong system is no savings at all.

Stacking Your Savings: A Real-World Example

Here's where things get exciting. All of these incentives can be combined on a single installation. Let's walk through a realistic scenario for an Austin homeowner replacing an aging system with a Tier 3 heat pump.

Scenario: Homeowner replaces a 15-year-old AC and gas furnace with a Tier 3 heat pump system (SEER2 17.0+, EER2 13.0+, HSPF2 9.0+) and enrolls in the Home Energy Savings program.

That's nearly $6,000 off the cost of a new system. Even on the conservative end, where you qualify for partial amounts from each program, most homeowners in this scenario are saving $3,500 to $5,000.

Step-by-Step: How to Claim Your Austin Energy Rebate

The application process is straightforward, but timing and documentation matter. Here's exactly how it works from start to finish.

Step 1: Verify Your Eligibility

Confirm that your home and existing system meet the requirements. Your home must be at least 10 years old, your current system must be at least 10 years old, and you must be an active Austin Energy residential customer.

Step 2: Choose a Participating Contractor

Austin Energy requires that all work be performed by a contractor registered in their program. Not every HVAC company in Austin qualifies. Working with a non-participating contractor means your rebate application will be automatically denied, regardless of the equipment you install.

CG Service Pros is a participating Austin Energy contractor and was recognized as their 2024 Contractor of the Year. We handle rebate-qualifying installations daily and know exactly what the inspectors look for.

Step 3: Get a Proper Load Calculation

Before any equipment is selected, your contractor should perform an ACCA Manual J load calculation. This determines the correct system size for your home. Austin Energy requires this documentation as part of the rebate application.

Step 4: Select Qualifying Equipment

Work with your contractor to choose a system that meets the minimum efficiency requirements for the rebate tier you're targeting. Remember that all components, the outdoor unit, indoor coil, and air handler or furnace, must be replaced as a matched system.

Step 5: Complete the Installation

Your participating contractor installs the new system, ensures everything is operating correctly, and documents the installation details needed for the application.

Step 6: Schedule the Post-Installation Inspection

Austin Energy (or their designated third-party inspector) will inspect the installation to verify that the equipment matches what was listed on the application, that components are properly matched, and that the system was installed according to program requirements.

Step 7: Submit Your Application Within 90 Days

This deadline is firm. Your rebate application, along with all supporting documentation (invoices, Manual J report, equipment specifications), must be submitted within 90 days of the installation date. Miss this window and you lose the rebate entirely.

Step 8: Receive Your Rebate

Once your application is approved and the inspection passes, Austin Energy issues your rebate. This typically appears as a credit on your Austin Energy account or a check, depending on the program cycle.

Important: Austin Energy Rebates Are First-Come, First-Served

One detail that catches people off guard is that Austin Energy's rebate programs operate on an annual budget. When the budget runs out, the program pauses until the next funding cycle. This is a first-come, first-served structure, and historically, the most popular rebate tiers have run out before the end of the fiscal year.

If you're planning to replace your system in 2026, the earlier you move, the better your chances of catching full funding. Waiting until mid-summer, when every HVAC company in the city is booked solid and rebate budgets are strained, adds unnecessary risk.

For a detailed look at all available Austin Energy rebates for air conditioners and heat pumps, visit our dedicated rebates page where we keep the latest program details updated.

Why CG Service Pros for Your Rebate-Qualifying Installation

Not every contractor treats the rebate process with the attention it deserves. Some submit incomplete applications. Others skip the Manual J calculation and hope the inspector doesn't notice. A few don't even bother registering with Austin Energy's program.

At CG Service Pros, we take a different approach.

We were named Austin Energy's 2024 Contractor of the Year, a recognition based on installation quality, rebate compliance, and customer satisfaction. That distinction matters because it means Austin Energy has specifically identified our work as meeting and exceeding their program standards.

Here's what that looks like in practice:

• Proper load calculations on every job. We run Manual J on every residential HVAC installation, not just the ones going through the rebate program. It's the right way to size a system, period.
• Complete rebate paperwork handled for you. We prepare and submit your Austin Energy rebate application, so you don't have to navigate the process alone.
• 4,500+ multifamily units completed. Our experience isn't limited to single-family homes. We've worked on large-scale projects across Austin, which means we've seen every installation scenario imaginable.
• Transparent pricing with no hidden fees. We'll walk through all available rebates, tax credits, and manufacturer promotions before you sign anything, so you know exactly what your out-of-pocket cost will be.

We serve homeowners throughout the Austin metro area, including Round Rock, Cedar Park, Georgetown, Pflugerville, Lakeway, Buda, Kyle, and surrounding communities. If you're within the Austin Energy service territory, we can help you take full advantage of every available rebate dollar.

Common Questions About Austin Energy HVAC Rebates

Can I get a rebate if I only replace the outdoor unit? No. Austin Energy requires a complete system replacement. All major components (outdoor unit, indoor coil, and air handler or furnace) must be replaced as a matched set.

Do Austin Energy rebates apply to new construction? No. The program is specifically for existing homes that are at least 10 years old, replacing systems that are at least 10 years old.

Can I claim both Austin Energy rebates and federal tax credits? Yes. These are completely separate programs. Austin Energy rebates come from your local utility, while federal tax credits come from the IRS. There is no conflict between them, and you should absolutely claim both.

What happens if I miss the 90-day application window? Unfortunately, late applications are not accepted. This is why working with an experienced participating contractor matters. At CG Service Pros, we submit the paperwork promptly after installation so this deadline is never an issue.

Are renters eligible for Austin Energy rebates? Generally, no. The rebates are designed for property owners. However, landlords who own rental properties within Austin Energy's service territory can apply for rebates on qualifying system replacements.

How long does it take to receive the rebate after approval? Processing times vary, but most homeowners receive their rebate within four to eight weeks after the inspection passes and the application is approved.

Plan Ahead: Make 2026 the Year You Upgrade

Between Austin Energy's HVAC rebates, the federal Inflation Reduction Act tax credits, manufacturer promotions, and the Home Energy Savings bundled program, 2026 offers a rare window where multiple incentive programs are all active simultaneously. That combination may not last. Federal programs have sunset provisions, utility budgets are capped annually, and manufacturer offers rotate seasonally.

If your system is 10 or more years old, showing signs of declining performance, or costing more to run each summer, now is the time to explore your options. A new high-efficiency heat pump can cut your cooling and heating costs by 30 to 50 percent while keeping your home more comfortable in Austin's extreme temperatures.

The first step is a straightforward conversation. We'll assess your current system, run the numbers on what you'd qualify for, and give you a clear picture of what a replacement would cost after all available incentives. No pressure, no gimmicks.

Our team is available for free in-home consultations, and as a CG Service Pros membership benefit, members receive priority scheduling and exclusive discounts on new system installations.

Schedule Your Free Rebate Consultation

Have questions? Call us at (512) 766-5079 or visit our contact page to schedule service.