PECO Rebates for a New Furnace, Heat Pump or AC in 2026 (and What Happened to the Federal Credit)

The short version

• PECO rebates are utility programs, not tax credits. You apply after installation, with the contractor's paperwork.
• Only equipment that meets the program's efficiency tier qualifies. A standard-efficiency system usually does not.
• The federal 25C credit no longer applies to equipment installed in 2026.
• Most of Lansdale borough buys electricity from Lansdale Electric, not PECO, so PECO's electric rebates may not apply there.
• Check the current program page before you sign a contract, not after the install.

Where PECO's rebates come from: Act 129

Pennsylvania's Act 129, passed in 2008, requires the state's large electric utilities to run energy efficiency and conservation programs. PECO runs its version under the Smart Ideas name. The programs are approved by the Pennsylvania Public Utility Commission and run in multi-year phases, and the menu of rebates can change when a new phase starts or a budget runs low.

That is why a neighbor's rebate from a few years ago is a poor guide. The equipment list, the efficiency thresholds and the amounts may all have moved. PECO has also offered rebates on some high-efficiency gas equipment through its gas efficiency program, which is separate from Act 129 and has its own rules.

What kind of equipment tends to qualify

Programs reward efficiency above the federal minimum. The details live on PECO's page, but the categories have looked like this:

Air-source heat pumps

Ducted heat pumps that meet a set SEER2 and HSPF2 tier have been a core rebate category, and they matter most to the all-electric townhomes and condos around Blue Bell. Higher tiers, including cold-climate models, have sometimes earned more.

Ductless mini-splits

Ductless heat pumps have qualified when they meet the efficiency tier. If you are adding a ductless mini-split for a sunroom, addition or a house without ducts, ask whether the specific indoor and outdoor pairing qualifies.

Central air conditioners and gas furnaces

High-efficiency central AC has been eligible at times. Gas furnaces fall under PECO's gas program, where one has been offered, and generally require a high AFUE rating. That means a 90%-plus condensing furnace, the kind that vents through PVC pipes out a side wall.

The order of operations

1. Read PECO's current rebate page for your equipment type and note the efficiency tier and any deadline.
2. Get a written quote that lists exact model numbers and the AHRI reference number for the matched system.
3. Ask the contractor to confirm the system qualifies and whether the program requires a participating contractor.
4. Have the system installed. Expect a permit in Whitpain Township; the contractor handles it, and you can confirm with the township.
5. Submit the application after installation, within the program's window, with the invoice, model and serial numbers and your PECO account number.
6. Keep copies of everything until the rebate arrives.

Most rejected applications fail at step two or five: a model that does not match the listing, or paperwork filed too late.

What happened to the federal 25C credit

For several years, the federal Energy Efficient Home Improvement Credit, known as 25C, let homeowners claim part of the cost of qualifying heat pumps, central air, furnaces and boilers on their tax return. That credit ended December 31, 2025. Equipment installed in 2026 does not qualify.

If your system went in during 2025, the credit belongs on your 2025 return. A tax professional can confirm whether you qualified. Be wary of any 2026 sales pitch that still leans on the federal credit.

Lansdale Electric customers and other exceptions

Most of Lansdale borough buys its electricity from borough-owned Lansdale Electric. PECO's Act 129 rebates are tied to PECO electric accounts, so a heat pump or AC in those homes may not qualify. If PECO supplies your gas, a gas program may still apply to a furnace. Ask Lansdale Electric whether it runs its own efficiency incentives.

Renters should know the rebate generally goes to the account holder or property owner named in the program rules. Landlords replacing equipment in a rental should check eligibility the same way.

From the field: how rebate paperwork goes wrong

Most rejected rebates are not about the equipment. They are about the paperwork. These are the problems installers see most often:

• The indoor and outdoor units do not match the rated combination. Efficiency ratings belong to a matched pair. Ask for the AHRI certificate number for your exact indoor coil or air handler and outdoor unit, and keep a copy.
• The efficiency tier is just short. PECO's rebates have been tiered by SEER2 (and HSPF2 for heat pumps). A system one step below the tier gets nothing, so confirm the rating before signing.
• The install date misses a promotion window. Seasonal promotions have install-by dates and separate submission deadlines. Missing either one forfeits the bonus.
• The invoice is missing details. Model and serial numbers, the install address and the contractor's name all need to appear. A one-line "new AC installed" invoice is not enough.
• The account holder does not match. The rebate goes to the PECO account holder at the service address. A new owner whose account has not transferred yet can run into trouble.

Some installers can also add manufacturer, distributor or trade-association incentives on top of PECO's. Ask whether any apply, and make sure the paperwork for each is filed separately.

Do not let the rebate choose the system

A rebate is a small share of what a system costs to buy and run over 15 years. A properly sized system matters more. Any HVAC installation should start with a Manual J load calculation, not the tonnage printed on the old unit. An oversized heat pump that technically qualifies will short-cycle and leave the house clammy in July.

In the 1990s and 2000s subdivisions around Collegeville and Upper Providence Township in Montgomery County, many original systems are due at the same time, and the choice between a heat pump, dual-fuel or a gas furnace with central air is a real one. If you are still deciding whether to replace at all, start with repair or replace a 15-year-old system.

The bottom line

PECO customers around Blue Bell can still get money back on qualifying heat pumps, central air, ductless systems and some gas equipment. Pennsylvania's Act 129 programs have been extended through 2031, but amounts, tiers and promotion dates change, and the federal 25C credit is gone. Check PECO's current rebate page before you buy, confirm the matched rating and tier with your installer, and keep every document. Lansdale Electric customers should check with the borough first.