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If you’ve been thinking about upgrading to a Waldorf heat pump, you’ve probably heard conflicting information about rebates and tax credits. Some sources still reference thousands of dollars in federal savings — but the landscape changed significantly heading into 2026. Here’s what you actually need to know.

At Mission Comfort, our HVAC team will help Waldorf homeowners navigate this process every day. Understanding what incentives are available right now — and how to access them — can make a real difference in what you ultimately pay for a new system.

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The Federal Tax Credit Is Gone — Here’s What Happened

The Section 25C Energy Efficient Home Improvement Credit, which offered homeowners up to $2,000 for qualifying heat pump installations, officially expired on December 31, 2025. This credit was originally part of the Inflation Reduction Act and was supposed to run through 2032, but the One Big Beautiful Bill Act, signed into law on July 4, 2025, accelerated that expiration.

If you installed a qualifying heat pump before the end of 2025, you can still claim the credit on your 2025 tax return using IRS Form 5695. But for any system installed in 2026 or later, that federal credit is no longer available.

The one exception: geothermal heat pump systems still qualify for a 30% federal tax credit under Section 25D through 2032. If geothermal is a viable option for your property, that’s worth exploring.

EmPOWER Maryland: Up to $15,000 in Rebates Still Available

The good news is that Maryland’s state-level incentive program remains one of the strongest in the country. The EmPOWER Maryland program, funded through a surcharge on your monthly utility bill, continues to offer substantial rebates for homeowners making the switch to heat pump systems.

Through the Home Performance with ENERGY STAR (HPwES) program, Maryland homeowners who replace fossil-fuel heating systems with electric heat pumps can receive up to $15,000 in rebates, covering as much as 75% of the total project cost. This applies whether you’re replacing a gas furnace, oil system, or propane setup.

The program is administered through Maryland’s major utilities, including SMECO, BGE, Pepco, and Potomac Edison — covering the communities we serve across Charles County, Prince George’s County, and Montgomery County.

How the Process Works

There are a few steps involved, but it’s straightforward once you know the path. It starts with a home energy audit. Through EmPOWER, the audit costs just $100 instead of the typical $400. A BPI-certified contractor will evaluate your home’s insulation, air sealing, ductwork, and overall energy performance. The audit is required to unlock the full rebate amounts.

From there, you’ll receive a report outlining recommended improvements and the rebates you qualify for. These can include the heat pump installation itself along with complementary upgrades like insulation, air sealing, and duct sealing — all of which improve the overall performance of your new system.

Your installing contractor typically handles the rebate paperwork on your behalf, and many rebates are applied at the point of sale or shortly after installation.

Midstream Rebates: Instant Savings Through Your Contractor

In addition to the HPwES rebates, EmPOWER offers midstream rebates ranging from $800 to $1,700 per heat pump that are applied instantly through participating contractors. These don’t require a separate application process — the discount is built into your quote.

What About the IRA Rebates (HOMES and HEAR)?

Maryland was allocated approximately $136.8 million in federal IRA rebate funding through the HOMES and HEAR programs. When the HEAR program launches, it could provide up to $8,000 for income-qualified households on top of existing EmPOWER incentives. However, as of mid-2026, neither program has officially launched in Maryland. The Maryland Energy Administration has not confirmed a start date.

We’re keeping a close eye on this and will update our customers as soon as these programs become available. In the meantime, the EmPOWER rebates are available right now and are worth taking advantage of while funding lasts.

Why Act Now

Rebate programs are funded by annual budget allocations, and the most generous incentives don’t last forever. With the federal tax credit now off the table, EmPOWER Maryland represents the single largest savings opportunity for homeowners looking to upgrade their heating and cooling system.

Heat pumps also make a lot of sense for Maryland’s climate. Modern systems maintain full heating capacity even in single-digit temperatures, and they provide both heating and cooling from one unit — which simplifies your system and can reduce long-term operating costs.

If you’re curious about whether a heat pump is the right fit for your home and how much you could save, our team can walk you through the numbers. We’ll help you understand which rebates apply to your situation, handle the paperwork, and make sure everything is installed to perform at its best.