2025 Heating Rebates Roundup: What Can You Claim Before 12/31?

New Jersey homeowners can still claim 2025 heating rebates through utilities like PSE&G, and federal Section 25C tax credits—if qualifying equipment is installed and placed in service by December 31. Federal end dates were moved up this year, and many NJ utility rebates are still active, so timing and documentation matter.

New Jersey winters reward efficient design. If you’re considering a heat pump, hybrid system, or a high-efficiency boiler/furnace before year-end, here’s what still qualifies, how 25C works, how local rebates can stack with your project, and how Princeton Air can help.

What changed in 2025 heating rebates—and why it matters in NJ

The federal window narrowed: 25C/25D credits end for equipment placed in service after 12/31/25; utility rebates continue separately. Under the One Big Beautiful Bill (OBBB), federal energy credits terminate sooner than originally planned. For homeowners, that means Princeton Air needs to complete the install by Dec 31, 2025 to claim 25C; 25D (solar/geothermal) also ends for expenditures after that date. Utility rebates from NJ programs remain available on their own schedules.

• 25C annual cap: Up to $3,200 per year, including $2,000 max for qualifying heat pumps/heat-pump water heaters, plus up to $1,200 across envelope items and other equipment. File with Form 5695.
• Placed-in-service deadline: Installation must be completed by 12/31/25 to claim 25C; 25D requires installation completion by 12/31/25 as well.
• NJ utilities: Programs like PSE&G HVAC Instant Rebates and 0% on-bill repayment can reduce upfront cost; other NJ utilities have parallel offerings.

PSE&G 2025 Heating Rebates*

Public Service Electric & Gas (PSE&G) is the largest utility provider in New Jersey, serving about 70–75% of the state’s population, which is why we highlight their rebate programs. For more info on their programs, click here.

SEER-2 Rated Electric Appliances (including heat pumps)

System	Rebate	Minimum Efficiency Requirements
Central Air Conditioning Split System – Tier 1	$60	SEER2 ≥ 15.2, EER2 ≥ 12
Central Air Conditioning Split System – Tier 2	$120 + Tax Credit Eligible	SEER2 ≥ 17, EER2 ≥ 12
Central Air Conditioning Single Package – Tier 1	$60 + Tax Credit Eligible	SEER2 ≥ 15.2, EER2 ≥ 12
Central Air Conditioning Single Package – Tier 2	$120 + Tax Credit Eligible	SEER2 ≥ 17, EER2 ≥ 12
Air-Source Heat Pump Split System – Tier 1	$300	SEER2 ≥ 15.2, EER2 ≥ 11.7, HSPF2 ≥ 7.8
Air-Source Heat Pump Split System – Tier 2	$450	SEER2 ≥ 17.1, EER2 ≥ 11.7, HSPF2 ≥ 7.8
Air-Source Heat Pump Single Package – Tier 1	$300	SEER2 ≥ 15.2, EER2 ≥ 10.6, HSPF2 ≥ 7.2
Air-Source Heat Pump Single Package – Tier 2	$450	SEER2 ≥ 17.1, EER2 ≥ 10.6, HSPF2 ≥ 7.2
Air-Source Heat Pump – Cold Climate	$600 + Tax Credit Eligible	SEER2 ≥ 15.2, EER2 ≥ 10, HSPF2 ≥ 8.1, COP ≥ 1.75 at 5°F
Heat Pump Water Heater	$450

Efficient Gas Appliances

System	Rebate	Minimum Efficiency Requirements
Reset Controls for Boiler	$75
Gas Boiler – Tier 1	$540	AFUE ≥ 90% – Must replace a non-condensing unit. Condensing-to-condensing replacement not eligible.
Gas Boiler – Tier 2	$600	AFUE ≥ 95% – Must replace a non-condensing unit. Condensing-to-condensing replacement not eligible.
Gas Furnace	$540	AFUE ≥ 95% – Must replace a non-condensing unit. Condensing-to-condensing replacement not eligible.
Gas Combi Heat – Tier 1	$780	AFUE ≥ 95% – Must replace a non-condensing unit. Condensing to condensing replacement not eligible.
Gas Combi Heat – Tier 2	$1,050	AFUE ≥ 97% – Must replace a non-condensing unit. Condensing-to-condensing replacement not eligible.
Tankless Water Heater – Tier 1	$300	UEF ≥ 0.87
Tankless Water Heater – Tier 2	$450	UEF ≥ 0.95
Indirect Fired Storage Tank Water Heater	$150	Must be attached to a boiler with AFUE ≥ 90%.
Furnace Fan	$60	ECM motor install
Smart Thermostat	$60	ENERGY STAR certified; new installation or replacement of manual or conventional programmable thermostat (as part of HVAC install).

*Eligibility varies by model ratings, installation date, and utility territory. Confirm before purchase.

New Jersey’s Decarbonization Rebates

If you’ve been thinking about upgrading to a heat pump or cutting back on fossil fuel use at home, New Jersey is basically handing out coupons like it’s Black Friday. These Residential Building Decarbonization Rebates make energy-efficient upgrades way more affordable — and Princeton Air can help you grab every dollar you qualify for.

Clean Heat (Full System Replacement)

Go all-electric and remove your old gas or oil system. This is where the biggest rebates live.

What it includes:

• Cold-climate heat pumps sized to cover 100% of your home’s heating load
• Required Manual J & S load calculations
• Full decommissioning of your fossil-fuel system

Rebates:

• Up to $10,000 for standard customers

Extra incentives:

• Up to $2,000 for decommissioning
• Up to $2,000 for re-ducting (if needed)
• +$2,000 for each additional heat pump required

Best for: Homeowners ready to go all-in on electric comfort and long-term efficiency.

Dual Heat (Dual-Fuel System)

Not ready to break up with your furnace? Totally fine. With dual heat, a cold-climate heat pump does the heavy lifting, and your furnace only steps in when needed.

What it includes:

• Heat pump sized for 100% of the heating load
• Integrated controls that automatically choose the most efficient fuel source

Rebates:

• Up to $5,000 for standard customers

Extra incentives:

• Up to $1,500 per required control unit (max 2)
• +$2,000 for additional heat pumps

Best for: Homeowners who want efficiency without ditching their furnace — or who just like options.

Hybrid Heat (Partial Displacement)

This one replaces your old AC with a heat pump that handles all cooling and some heating — your furnace stays as the primary heat source in winter.

What it includes:

• High-efficiency heat pump covering all cooling + up to 90% of heating
• Integrated controls required

Rebates:

• Up to $2,000 for standard customers

Extra incentives:

• Up to $1,500 per integrated control unit

Best for: Homeowners already planning to replace an aging AC but wanting a heating boost at the same time.

Ground Source Heat Pumps (Geothermal)

If you’re looking for the “set-it-and-forget-it” system of your dreams, geothermal is truly peak efficiency — and NJ backs it with some huge incentives.

What it includes:

• High-efficiency open- or closed-loop geothermal system
• Loop design, heat-load sizing, and decommissioning documentation

Rebates:

• Up to $3,000 per 10,000 BTUH for gas customers
• Up to $4,000 per 10,000 BTUH for delivered-fuel customers

Extra incentives:

• Up to $2,000 for re-ducting
• Up to $2,000 for decommissioning

Best for: Homeowners planning a long-term, ultra-efficient system — especially if they’re staying in their home awhile.

NJ-Specific Guidance: where each option shines

• Central and Southern NJ: Cold-climate heat pumps cover most winter hours; dual-fuel adds resilience during arctic snaps.
• Mercer County (Princeton, West Windsor): Newer envelopes often allow smaller, quieter variable-speed systems; townships may require mechanical + electrical permits and inspections—built into our process.
• Older homes (Trenton/boroughs): Ductless can solve comfort room-by-room without major renovation—qualifies for remaining 25C if installed by 12/31/25 and meeting specs.

Schedule a consultation with Princeton Air now so your project can be right-sized, permitted, and installed before year-end. We’ll confirm model eligibility, coordinate permits/inspections, and guide you on tax documentation and NJ utility rebates.

• Request a right-sizing assessment
• Explore heat pump options
• Learn about ductless mini-split installation
• Review financing and rebates

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