Boone County 2026 Energy Rebates That Apply to You

There is real money available for HVAC upgrades in Boone County right now. Federal tax credits, Duke Energy rebates, Boone REMC rebates, and income-qualified grants can collectively cut thousands of dollars off the cost of a new heat pump or high-efficiency system. But the rules are specific, the documentation requirements are real, and if you buy the wrong equipment or miss the filing window, the money goes away.

Here is what's actually available in 2026 for Boone County homeowners, how to stack it, and what not to do.

Federal 25C Tax Credit: The Foundation

The Inflation Reduction Act's Section 25C residential energy credit runs through 2032. It's a non-refundable tax credit — meaning it reduces what you owe in federal taxes, but if you owe less than the credit amount, you don't get the difference as a refund. Plan accordingly.

The credit amounts for HVAC equipment:

• Heat pumps (air-source): 30% of installed cost, up to $2,000 per year
• Central AC or gas furnace: 30% of installed cost, up to $600 per year
• Heat pump water heaters: 30% of installed cost, up to $2,000 per year (combined with space heating heat pump — they share the $2,000 cap)
• Smart thermostat: 30%, up to $150

The $2,000 heat pump credit and the $600 furnace/AC credit are separate limits. A homeowner who replaces both a furnace and an AC in the same year can claim up to $600 for the furnace and $600 for the AC, not $2,000 — unless one of those units is a heat pump, in which case the heat pump portion claims from the $2,000 bucket.

What Equipment Qualifies for 25C

Not every heat pump or furnace qualifies. The equipment must meet ENERGY STAR criteria. For 2026, the relevant efficiency thresholds are:

• Air-source heat pumps: SEER2 ≥ 15.2 (split systems), HSPF2 ≥ 7.8
• Central AC: SEER2 ≥ 15.2 (split systems, southern U.S. standard; this is the threshold that applies in Indiana)
• Gas furnaces: AFUE ≥ 97% for northern U.S. (Indiana qualifies as northern)
• Heat pump water heaters: UEF ≥ 2.2

The 97% AFUE requirement for furnaces to qualify for the $600 credit is important to note. A 96% AFUE furnace — which is what most contractors install and what makes practical sense for most Indiana homes — does not qualify for the 25C furnace credit. The heat pump credit at $2,000 has a lower bar to clear (SEER2 ≥ 15.2), so a dual-fuel system where the heat pump qualifies can still capture the larger credit.

Your installer must provide documentation confirming the equipment meets the qualifying thresholds. Get the manufacturer's certification statement — it's a document the manufacturer publishes stating the product qualifies for 25C. Keep it with your tax records.

Duke Energy Rebates for Boone County Customers

Duke Energy Indiana serves most of the incorporated areas of Boone County — Lebanon, Whitestown, Zionsville, and surrounding subdivisions. Their current residential rebate schedule for 2026 includes:

• Qualifying heat pump installation: Up to $300 (variable by efficiency tier)
• Smart thermostat: $100 (select models enrolled in their demand response program)
• Heat pump water heater: Up to $400

Duke rebates are filed post-installation through their online portal. You'll need the contractor invoice, equipment model number, and your Duke account number. Rebates typically process within 60–90 days. Duke's rebate program details change annually — verify current amounts at duke-energy.com before you buy equipment.

Boone REMC Customers: Different Rules

If your property is in rural Boone County and served by Boone REMC rather than Duke Energy, the rebate schedule is different. Boone REMC is a rural electric cooperative and operates its own incentive programs, which are generally not aligned with Duke's schedule. Their programs have changed more frequently in recent years as they navigate wholesale power cost changes.

Call Boone REMC directly at their Lebanon office before you commit to equipment: their rebates for heat pumps and heat pump water heaters can be competitive, but you need their current schedule, not last year's. Don't assume the same amounts apply as Duke.

IRA HEEHRP: Income-Qualified Households

The High-Efficiency Electric Home Rebate Act (HEEHRP), part of the IRA, provides point-of-sale rebates for income-qualified households. Indiana is administering these through the Indiana Office of Energy Development. As of 2026, the program is active for Indiana residents.

Benefit amounts depend on household income relative to area median income (AMI):

• 80–150% AMI: 50% of eligible project cost, up to $4,000 for a heat pump
• Below 80% AMI: 100% of eligible project cost, up to $8,000 for a heat pump

For Boone County, the 2026 AMI for a family of four is approximately $110,000. That means a household earning up to $88,000 (80% AMI) may qualify for the full 100% rebate tier, subject to project costs and program availability. These are applied at point of sale through a participating contractor — they are not tax credits you claim later.

HEEHRP availability depends on Indiana's program funding level. Check with the Indiana Office of Energy Development for current enrollment status before planning around this rebate.

Stacking Incentives: What's Actually Possible

For a Boone County homeowner installing a dual-fuel heat pump system who is above the HEEHRP income threshold, a realistic stack looks like this:

• Federal 25C credit (heat pump): up to $2,000
• Duke Energy heat pump rebate: up to $300
• Federal 25C credit (smart thermostat): up to $150
• Duke smart thermostat rebate: $100
• Total potential: $2,550 off a qualifying installation

For an income-qualified household below 80% AMI replacing an aging system with a heat pump, the stack can reach $8,000+ (HEEHRP) plus the Duke rebate, though the 25C credit and HEEHRP cannot both apply to the same expenditure — HEEHRP reduces the basis for the 25C calculation. Your tax preparer needs to know about both programs.

What Not to Do

• Don't buy equipment before verifying qualification. Not every heat pump qualifies for 25C. Not every installation qualifies for the Duke rebate (must be on Duke service). Confirm the specific model number against the current ENERGY STAR qualified products list before the install.
• Don't assume the installer handles the tax credit. The 25C credit is claimed on IRS Form 5695 when you file your federal return. Your installer provides documentation; you or your tax preparer file the form. They are not the same step.
• Don't miss the utility rebate filing window. Duke's rebates have submission deadlines — typically 90 days from installation date. Miss it and the money is gone.
• Don't install without getting the manufacturer's 25C certification statement. Without it, you cannot substantiate the credit if audited.

Timeline Summary

Federal 25C: Claimed on your federal tax return for the year the equipment was installed. If you install in October 2026, you claim it on your 2026 return filed by April 2027.

Duke Energy rebates: Filed within 90 days of installation through Duke's online portal. Processed in 60–90 days after submission.

HEEHRP: Applied at point of sale through a participating contractor. Ask us if we're enrolled in the Indiana program before scheduling — enrollment requirements for contractors matter here.

Questions about what applies to your specific situation? Call us at (765) 894-0047. We'll tell you what equipment qualifies before we write the quote, not after you've already signed.