If you’ve been putting off upgrading your heating and cooling system while waiting for rebates and tax credits to line up, 2026 is a year where the landscape has shifted — and it’s worth understanding exactly what’s available before you make a decision. Some programs have changed significantly, others are still in the pipeline, and a few deliver real money right now. Here’s an accurate breakdown of every major incentive available to Hampton Roads homeowners in 2026.
⚠ Important note before you read: A lot of content online in 2026 still claims the federal Section 25C tax credit applies to new heat pump installations. It does not — that credit expired December 31, 2025. We’ve fact-checked every program in this article against official sources. Always confirm current details directly with the program before purchasing equipment.
The Federal Section 25C Tax Credit: Expired for New Installations
The IRA’s Energy Efficient Home Improvement Credit (Section 25C) — which offered up to $2,000 back on qualifying heat pump installations — expired on December 31, 2025 for new installations. If your heat pump was installed and placed in service before that date, you can still claim it on your 2025 tax return. But for anything installed in 2026 or later, this credit is no longer available.
You’ll still find plenty of websites and even contractors claiming the credit applies in 2026 — so double-check before making any purchasing decisions based on that assumption.
What IS Still Active: Federal Section 25D (Geothermal)
One significant federal credit is still fully alive in 2026: the Residential Clean Energy Credit (Section 25D), which covers geothermal (ground-source) heat pump installations. Unlike 25C, Section 25D carries no dollar cap and covers 30% of total installed costs through 2032. For Hampton Roads homeowners with suitable property, geothermal remains one of the most powerful HVAC incentives available anywhere.
- Credit rate: 30% of total equipment and installation costs
- Dollar cap: None
- Expires: December 31, 2032
- Applies to: Ground-source (geothermal) heat pumps in your primary residence
- Claimed on: IRS Form 5695
Virginia’s IRA State Rebates: Coming, But Not Here Yet
The Inflation Reduction Act also funded two large state-administered rebate programs — HOMES (Home Efficiency Rebates) and HEAR (High Efficiency and Appliance Rebates) — with Virginia receiving a share of the $8.8 billion national allocation. These programs could eventually offer Hampton Roads homeowners up to $8,000 for whole-home efficiency upgrades and up to $14,000 for appliance and equipment upgrades (income-dependent).
The catch: Virginia’s programs have not launched yet. According to Virginia Energy (the state energy office), the agency submitted its application documents in June 2025 and is now updating them to conform with new federal guidance released by the U.S. Department of Energy on May 29, 2026. Virginia Energy cannot currently provide an estimated launch date.
ℹ What this means for you: Don’t hold off on a needed HVAC replacement waiting for these rebates — there’s no timeline for when they’ll be available. However, it’s worth checking Virginia Energy’s website regularly for updates, as these programs could open later in 2026 and retroactive eligibility rules may vary.
When Virginia’s programs do launch, here’s what’s expected based on federal program structure:
| Program | Who Qualifies | Max Rebate |
|---|---|---|
| HOMES (Home Efficiency Rebates) | All income levels; must achieve ≥15% whole-home energy savings | Up to $8,000 |
| HEAR (High Efficiency & Appliance Rebates) | Income-limited (up to 150% AMI); electric-to-electric upgrades only | Up to $14,000 |
Important HEAR restriction: Under federal law, the HEAR program cannot be used to replace a non-electric appliance with another non-electric appliance. It is only for households upgrading from existing electric equipment to higher-efficiency electric equipment.
Virginia Natural Gas: Smart Thermostat Rebate
If your home uses natural gas, Virginia Natural Gas — which serves Newport News, Hampton, Williamsburg, James City County, York County, and surrounding Peninsula communities — offers a $50 rebate on qualifying Wi-Fi enabled smart thermostats for residential customers. It’s a small but easy saving that stacks well with any equipment upgrades you’re already planning.
Weatherization Assistance Program (Low-Income Households)
Hampton Roads homeowners at or below 200% of the federal poverty level may qualify for the Weatherization Assistance Program (WAP), administered by the Virginia Department of Housing and Community Development (DHCD). WAP can cover HVAC system repair or replacement at no cost to qualifying households, with installation performed by licensed contractors. This program is separate from all utility rebates and IRA programs and is available regardless of whether the state IRA programs have launched.
How to Stack These Incentives
The good news is that most of these programs can be combined — within rules. Here’s how stacking works:
- Dominion utility rebates can typically be combined with state rebates when they launch
- HOMES and HEAR rebates can be used for different measures (e.g., HOMES for insulation, HEAR for a heat pump) but cannot be combined for the same measure
- The Section 25D geothermal credit stacks with utility rebates and state rebates
- The Virginia Natural Gas smart thermostat rebate can be combined with any equipment rebate program
- Federal credits are calculated on your out-of-pocket cost after rebates are applied
What to Do Right Now
Given the current landscape, here’s the smartest approach for Hampton Roads homeowners considering an HVAC upgrade in 2026:
- Check Dominion’s current rebate page before purchasing any equipment — amounts and eligible models change throughout the year and programs can close when funding runs out.
- If geothermal is viable for your property, Section 25D is one of the most generous credits still available — no cap, 30% of total cost.
- Bookmark Virginia Energy’s rebate page (energy.virginia.gov) to monitor for the HOMES and HEAR program launch.
- Don’t delay a necessary replacement waiting for state IRA rebates — there’s no launch date, and equipment that fails in July costs far more in emergency service fees and discomfort.
- Work with a licensed HVAC contractor who knows the current rebate programs — they can help ensure your equipment meets efficiency thresholds and assist with paperwork.
The Bottom Line
The rebate landscape for Hampton Roads homeowners in 2026 is real but uneven. The big federal tax credit (25C) is gone for new installations. The large state IRA rebates are approved in principle but not yet accessible. What IS available today — Dominion Energy rebates, the Virginia Natural Gas thermostat rebate, the 25D geothermal credit, and the Weatherization Assistance Program — can still deliver meaningful savings, especially when stacked together.
The homeowners who benefit most are the ones who do their homework before they buy, not after.
Have questions about which rebates your next HVAC upgrade qualifies for? We stay current on every incentive program available to Hampton Roads homeowners so you don’t have to. Call us at (757) 566-3052 or schedule a free consultation at https://nelsonsheatingandcooling.com/contact — we’ll help you choose equipment that maximizes your savings.
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