NJ HVAC Rebates & Incentives 2026: Heat Pumps, Furnaces, AC & Water Heaters

For a heating, cooling or water heating system installed in New Jersey in 2026, the money comes from your utilities, not the IRS. The federal 25C home improvement tax credit ended for equipment placed in service after December 31, 2025. What's left are NJ HVAC rebates run by your gas and electric companies. Right now that means up to $3,650 in NJNG SAVEGREEN equipment rebates, $500 to $1,000 JCP&L heat pump rebates, instant rebates through PSE&G participating contractors, and 0% on-bill financing of up to $25,000 from several utilities.

Written by the Guardian Air HVAC & plumbing team · Reviewed for accuracy October 2026

Last verified October 2026. We checked every program, amount and deadline in this guide against the official program page linked beside it. Utility rebates are set by program cycle and depend on funding, so amounts can change mid-year. Treat every figure as "up to" and confirm the current terms on the program page before you sign a contract.

Federal HVAC Tax Credits in 2026: 25C and 25D Are Over

Most search results on "hvac rebates and tax credits" still describe a 30% federal credit worth up to $2,000 for a heat pump and $600 for a furnace or AC. That was true through 2025. It isn't now.

The One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025) ended both residential energy credits early. The IRS's FAQ on the law's changes states it directly:

Section 25C, the Energy Efficient Home Improvement Credit: "The credit will not be allowed for any property placed in service after December 31, 2025."

Section 25D, the Residential Clean Energy Credit: "The credit will not be allowed for any expenditures made after December 31, 2025," and "an expenditure with respect to an item is treated as made when the original installation of the item is completed."

What that means in practice:

• Installed and running in 2025? You could still claim 25C on your 2025 return using Form 5695. The IRS's 25C credit page notes that for 2025 property, each item also needed the manufacturer's Qualified Manufacturer Identification Number (QMID) reported on the return.
• Paid a deposit in 2025 but installed in 2026? No credit. 25C goes by placed-in-service date, and for 25D the IRS says payment timing doesn't matter if installation finished after December 31, 2025.
• Any 2026 installation: no federal residential credit for heat pumps, furnaces, boilers, central AC, water heaters or geothermal.

If a 2026 quote still subtracts a "30% federal tax credit" from the price, ask for it to be removed and the real net price restated. It's an easy error to make when an estimate template was built before the law changed. You'll also find older pages, including ENERGY STAR's tax credit page, that describe the credits as available "through December 31, 2025". That end date is real. They weren't extended.

Who Runs NJ HVAC Rebates Now

Many homeowners still go looking for "NJ Clean Energy rebates" on HVAC equipment. The New Jersey Clean Energy Program (NJCEP) used to run the statewide residential HVAC rebate. Most residential efficiency incentives now come from the utilities themselves. NJCEP's energy efficiency page explains that on October 30, 2024 the Board of Public Utilities approved a second program cycle, called Triennium 2, available from January 1, 2025 "through the state's seven public electric and gas utilities". NJCEP still runs some statewide programs, including Comfort Partners for income-eligible households.

The practical consequence: your rebates depend on who sends your bills. You have one gas utility and one electric utility, and each runs its own program with its own rules. In our service area that usually looks like this:

• Gas: New Jersey Natural Gas (NJNG) serves most gas customers in Monmouth and Ocean counties. PSE&G supplies gas to much of Middlesex. Elizabethtown Gas and South Jersey Gas run their own programs for their customers.
• Electric: JCP&L covers most of Monmouth and Ocean counties, PSE&G covers much of Middlesex, and Atlantic City Electric serves parts of southern New Jersey.

Check the name on each bill rather than going by town. Utility service territories don't follow municipal borders, so two homes in the same town can be on different programs.

NJ HVAC Rebates by Program (Verified October 2026)

Program	Who runs it	What it covers	How to apply	Link
SAVEGREEN HVAC & Water Heating	New Jersey Natural Gas	95% AFUE gas furnaces, heat pumps, tankless water heaters and more. Up to $3,650 combined. Up to $25,000 0% on-bill repayment.	Homeowner or contractor applies after install, within 120 days of purchase	savegreen.com
SAVEGREEN Hybrid Heat	New Jersey Natural Gas	Heat pump paired with a gas furnace or boiler and an integrated thermostat. Up to $2,000 (one zone) or $4,000 (two zones).	After install, within 120 days of purchase	savegreen.com
HVAC Equipment Rebates	JCP&L (administered by CLEAResult)	Heat pumps $500 / $750 / $1,000 (cold climate). Ductless $750. Central AC $100–$200. Geothermal $1,500. ECM furnace fan $100.	Form by email or mail. Contractors can use the portal.	energysavenj.com
HVAC Instant Rebates	PSE&G	Eligible heating and cooling equipment. Rebate taken off the invoice. Up to $25,000 interest-free on-bill repayment.	Through a PSE&G participating contractor at the time of sale	pseg.com
HVAC Efficiency Program	Atlantic City Electric	Heat pumps $500 / $750. Cold climate up to $2,000 (limited time). Ductless and heat pump water heaters $750. Smart thermostats.	Usually filed online by the contractor. Paper form available.	atlanticcityelectric.com
Rebates & Incentives	Elizabethtown Gas	Up to $1,750 on high-efficiency heating and water heating. 0% on-bill repayment.	Through the ETG program site	elizabethtowngas.com
Rebates & Incentives	South Jersey Gas	Up to $1,750 on high-efficiency heating and water heating. 0% on-bill repayment.	Through the SJG program site	southjerseygas.com
Comfort Partners	NJ Clean Energy Program with the utilities	Free efficiency work for households at or below 250% of federal poverty guidelines	Interest form. Rolling enrollment.	cleanenergy.nj.gov
IRA Home Energy Rebates (HEAR/HOMES)	NJ Board of Public Utilities	Not open yet	Inquiry form for updates only	cleanenergy.nj.gov

NJNG SAVEGREEN: the furnace and boiler rebate most of our customers use

If you searched "NJNG furnace replacement", this is the program you want. The SAVEGREEN HVAC and water heating page lists up to $3,650 in combined rebates. Qualifying equipment includes a natural gas furnace rated at least 95% AFUE, air-source heat pumps meeting SEER2 15.2, EER2 11.7 and HSPF2 7.8, cold-climate heat pumps, and tankless water heaters rated at least 0.95 UEF. The rules that matter most:

• The new equipment must replace an existing non-condensing furnace or boiler. Swapping one condensing furnace for another doesn't qualify, and neither does new construction.
• Equipment must be purchased and installed by June 30, 2027.
• The application must be postmarked within 120 days of the purchase date.
• You need photos of the existing equipment, a paid receipt and proof of permit.
• Income-qualified customers get an extra $300 per qualifying piece of equipment and longer repayment terms.
• 0% APR on-bill repayment of up to $25,000 is available, calculated net of rebates.

The application page lists tankless water heaters at up to $750 and limits smart thermostat rebates to two per account. Per-item amounts for furnaces are shown in the program's charts. Check the program page for the current figure, because amounts change. For dual-fuel systems, the SAVEGREEN hybrid heat program pays up to $2,000 for a single-zone home or $4,000 for a two-zone home. It requires an air-source heat pump paired with a gas furnace or boiler and a compatible integrated thermostat, on the same June 30, 2027 and 120-day deadlines.

JCP&L: heat pump rebates for Monmouth and Ocean

JCP&L's HVAC equipment rebate page, administered by CLEAResult, lists:

• Air-source heat pump Tier 1: $500 (SEER2 ≥ 15.2, EER2 ≥ 11.7, HSPF2 ≥ 7.8)
• Air-source heat pump Tier 2: $750 (SEER2 ≥ 17.1, EER2 ≥ 11.7, HSPF2 ≥ 7.8)
• Cold-climate heat pump: $1,000 (SEER2 ≥ 15.2, EER2 ≥ 10, HSPF2 ≥ 8.1)
• Ductless mini-split heat pump: $750 (SEER2 ≥ 17.1, EER2 ≥ 11.7, HSPF2 ≥ 7.8)
• Central AC: $100 (SEER2 ≥ 15.2, EER2 ≥ 12) or $200 (SEER2 ≥ 17, EER2 ≥ 12)
• Geothermal: $1,500 when replacing an air- or ground-source heat pump or electric system
• Furnace fan with an electronically commutated motor: $100

The page didn't state an application deadline when we checked. File promptly anyway and confirm the deadline by phone (855-449-3090) before you rely on it. JCP&L's energy savings hub also lists Whole Home Energy Solutions, a home energy assessment, income-qualified weatherization and appliance rebates. Check those pages for current terms.

PSE&G: instant rebates through participating contractors

PSE&G works differently. Its HVAC Instant Rebates program is "midstream": a PSE&G participating contractor confirms eligibility and takes the rebate off your invoice when the job is done, so you don't mail anything in yourself. PSE&G also offers up to $25,000 in interest-free on-bill repayment for qualifying HVAC Instant Rebates projects. PSE&G's program pages block automated access, so we couldn't read the current per-unit amounts directly. Check the program page or ask a participating contractor for today's figures, because amounts change. One rule matters more here than anywhere else: if your contractor isn't in PSE&G's participating network, the instant rebate generally isn't available on that job. Ask before you sign.

Atlantic City Electric, Elizabethtown Gas and South Jersey Gas

If your bill comes from one of these, the rebates are similar in shape. Atlantic City Electric's HVAC Efficiency Program lists $500 and $750 heat pump tiers, $750 for ductless mini-splits and heat pump water heaters, and $100 to $200 for central AC. It also has a limited-time enhanced rebate of up to $2,000 on cold-climate heat pumps (NEEP/AHRI listed) and up to $150 on smart thermostats, starting April 1, 2026. Check the end date on the program page. Low- and moderate-income customers get an extra $300 per qualifying piece. Elizabethtown Gas and South Jersey Gas each list up to $1,750 on high-efficiency heating and water heating equipment for existing customers, with 0% APR on-bill repayment. Exact equipment specifications are on their program sites.

IRA HEAR and HOMES rebates: not open in New Jersey

The Inflation Reduction Act funded two state-run programs: HEAR, for electrification rebates on heat pumps and panels, and HOMES, for whole-house savings. Unlike the tax credits, the 2025 law didn't repeal them, but each state has to launch its own. NJCEP's IRA rebate page says New Jersey's programs "are currently in development and are not yet open for applications," and that the state is still finalizing implementation plans with the U.S. Department of Energy. There's an inquiry form for updates. Don't put off a needed replacement in the hope of a HEAR rebate, and don't trust anyone selling one today. The state hasn't said whether jobs finished before launch will qualify.

How Equipment Choice Decides Eligibility

Almost every rebate denial we see traces back to the equipment, not the paperwork. Rebates are tied to specific ratings, and the rating has to belong to the exact combination installed.

• Gas furnaces: 95% AFUE minimum. An 80% furnace earns nothing from NJNG. On NJNG and PSE&G, a 95% furnace also has to replace a non-condensing unit. That makes the common upgrade the one that qualifies: an old 80% furnace with metal flue pipe going to a 95%+ condensing furnace with PVC venting. Our furnace replacement cost guide explains what that conversion adds to the job.
• Heat pumps: the matched system carries the rating. SEER2, EER2 and HSPF2 belong to the outdoor unit, indoor coil or air handler, and sometimes the furnace, as a certified combination. Pair a qualifying condenser with the wrong coil and the system can drop below the tier. The proof is the AHRI certificate for that exact matchup, which NJNG points to through the AHRI Directory.
• Cold-climate heat pumps: a separate list. The top tiers at JCP&L, NJNG and ACE need cold-climate performance: HSPF2 of at least 8.1 and, on NJNG's spec, a COP of at least 1.75 at 5°F. ACE checks against the NEEP cold-climate heat pump list, and it's worth checking a model there before you commit. For a house that will rely mostly on a heat pump through a Jersey winter, this is the category we'd choose anyway. Our heat pump cost guide covers what it adds to the price.
• Central AC: highest EER2 requirement. JCP&L wants EER2 ≥ 12 even at Tier 1, which some 15.2 SEER2 units don't reach. A plain AC rebate is small, $100 to $200. If you're replacing AC anyway, the jump to a heat pump often earns more rebate than the AC did.
• Water heaters: UEF, not tank size. NJNG's tankless rebate needs a UEF of at least 0.95, which in practice means a condensing tankless unit. Electric-side rebates go to heat pump water heaters. Our water heater replacement team checks UEF on the spec sheet before ordering.

How to Claim an NJ HVAC Rebate, Step by Step

The order matters. A few of these steps can't be fixed after the old equipment has gone to the scrap yard.

1. Identify both utilities. Read the names on your gas and electric bills, then open each program page in the table above. A heat pump replacing an AC can qualify on the electric side. A furnace upgrade, or a heat pump paired with a gas furnace, can qualify on the gas side.
2. Check eligibility before you buy. Is the existing unit non-condensing? Is the house new construction? Does the program need a participating contractor (PSE&G) or pre-approval for anything you're planning? If the page is unclear, call the number on it before signing. Most utility HVAC rebates are filed after installation, but deadlines run from the purchase date, so the clock starts sooner than you'd think.
3. Pick model numbers against the spec. Ask for the exact outdoor, indoor and furnace model numbers on the quote, not just "16 SEER2 heat pump". Then confirm the AHRI matchup meets the tier you're being promised.
4. Photograph the old equipment before removal. NJNG requires photos of the existing furnace or boiler. We take the nameplate (model, serial, input rating), the full unit, and the flue connection that shows it was non-condensing.
5. Pull the permit. NJNG requires proof of permit. Most other programs expect a permitted install too, and you want the inspection regardless. A permit-free quote is cheaper only until the rebate gets rejected.
6. Collect the closing documents. A paid, itemized invoice showing each model and serial number, the installation date and the price. The AHRI certificate. The permit number or approval. Proof of payment.
7. Submit inside the window. NJNG's is 120 days from purchase. Put the date on your calendar the day you sign. PSE&G's instant rebate is handled on the invoice by the participating contractor.
8. Keep copies and follow up. Save the confirmation number. If you haven't heard back within the time the program states, call before the window closes, not after.

Common Reasons Rebates Get Denied

• The matched system doesn't meet the tier. Most often a qualifying condenser paired with a non-matching coil, or a variable-speed system installed with a thermostat that doesn't support it.
• The old unit was already condensing. Replacing a 90%+ furnace with a 96% one doesn't qualify for NJNG's furnace rebate.
• No photos of the old equipment. Once the old furnace is gone, these can't be retaken.
• Missing permit. NJNG lists proof of permit as a requirement, not a nice-to-have.
• Late filing. The 120-day window runs from the purchase date, not the date you remembered.
• Wrong program. Filing a heat pump with the gas utility when it qualifies on the electric side, or the reverse.
• Invoice not itemized. A single "HVAC system: $X" line with no model or serial numbers is the classic reason for a request for more information.
• Non-participating contractor on PSE&G jobs. No participating contractor means no instant rebate.
• New construction or an addition. NJNG's program excludes new construction, and others restrict it too.

Stacking: What Can Be Combined

Gas and electric programs are separate, so a project that touches both fuels may have something available from each. A dual-fuel system, for example, puts a heat pump on the electric side and a furnace on the gas side. Whether a specific gas rebate can be combined with a specific electric rebate on the same equipment is up to each program's terms, and we didn't find a statewide rule. Confirm it in writing with both programs before you count on both amounts.

Rebates and on-bill financing are designed to work together. NJNG states its 0% loans are calculated net of rebates. In other words, the rebate reduces the amount you finance.

Income-qualified enhancements stack on top of the standard rebate. NJNG and ACE each list an extra $300 per qualifying piece of equipment.

No federal credit stacks with anything for 2026. If you see a total that adds a federal tax credit to utility rebates for a 2026 install, that total is wrong. Some manufacturer or contractor promotions also run alongside utility rebates. Ours are listed on our current offers page.

How Guardian Air Handles the Paperwork

We don't promise rebate amounts we can't control. Here is what we do on every replacement:

• We list exact model numbers on the estimate and check the matched system against the program's published efficiency minimums before you sign.
• We provide the AHRI certificate for the installed matchup and an itemized invoice showing model and serial numbers, installation date and price.
• We photograph the existing equipment, including nameplate and venting, before it comes out.
• We pull the permit and give you the permit number for your application.
• We show any expected rebate as a separate line, marked as not guaranteed, so the price you're signing for doesn't depend on a check you haven't received.

What affects your quote. Rebate eligibility often decides the equipment, and the equipment decides the price. A 95% furnace replacing an 80% unit usually needs new PVC venting, a condensate drain, and sometimes a chimney liner for the water heater left behind. Those costs can be larger than the rebate. A cold-climate heat pump costs more than a standard one, and some homes need an electrical panel upgrade. For context, the typical gas furnace replacement range we use is about $3,800 to $10,000 installed, and a well-installed ducted heat pump in central Jersey typically runs about $8,000 to $14,000. Both are estimates; a home visit sets the real number. The full breakdowns are in our furnace cost guide and heat pump cost guide.

When a Rebate Shouldn't Drive the Decision

• When the qualifying equipment doesn't suit the house. A heat pump sized to win a rebate but undersized for your heat loss will run on backup strips all January. Size first with a load calculation, then pick the qualifying model.
• When the conversion costs more than the rebate. Some homes can't vent a condensing furnace easily: no sidewall route, setback limits, or a long run to the outside. The extra work can cost more than the rebate is worth.
• When the old system has life left. Pulling a sound, younger furnace to catch a program deadline rarely pays. Our signs you need a new furnace guide helps you decide whether it's time.
• When it's an emergency. If you have no heat in January, safety and speed come first. Still ask about qualifying equipment, but don't wait days for a specific model if a safe alternative is available.
• When the "rebate" is from someone you can't verify. If an offer isn't on the official program page, treat it as marketing until the utility confirms it.

Comparing fuels before you choose? Our heat pump vs furnace guide lays out the trade-offs. You can also go straight to our heat pump installation or furnace replacement service pages.

Sources

• IRS: FAQs for modification of sections 25C, 25D and others under Public Law 119-21
• IRS: Energy Efficient Home Improvement Credit
• NJ Clean Energy Program: Energy efficiency (Triennium 2)
• NJ Clean Energy Program: IRA Home Energy Rebates in New Jersey
• NJ Clean Energy Program: Comfort Partners
• NJNG SAVEGREEN: HVAC and water heating rebates and hybrid heat
• JCP&L: HVAC equipment rebates
• PSE&G: HVAC Instant Rebates Program
• Atlantic City Electric: HVAC Efficiency Program
• Elizabethtown Gas: Rebates and incentives and South Jersey Gas: Rebates and incentives
• NEEP: Cold climate air source heat pump list

About Guardian Air

Guardian Air is a licensed New Jersey HVAC and plumbing contractor serving Monmouth, Middlesex and Ocean counties. We install and replace furnaces, heat pumps, air conditioners and water heaters, and every estimate lists the exact equipment, the permit, and any rebate it may qualify for as a separate line. Learn more about our team, call (848) 276-6300 (Monday to Friday 8–6, Saturday 8–4), or request a free in-home estimate.