Tankless Water Heater Rebates and Incentives in 2026

The federal 25C tax credit has expired. Here's what's actually available in 2026 to reduce your installation cost.

Federal Tax Credit (25C) — Current Status

25C Credit Expired December 31, 2025
Installations before Dec 31, 2025
Eligible
Claim on 2025 tax return (filed early 2026). Keep receipts + ENERGY STAR certification.
Installations in 2026
NOT eligible
Federal credit expired. State and utility rebates are your primary option.
Future extension?
Possible
Congress may extend the credit. Monitor energystar.gov for legislative updates.

If your installation qualifies (completed 2025, ENERGY STAR unit): the credit is 30% of cost up to $600 for qualifying water heaters. Use IRS Form 5695 on your 2025 federal tax return. Consult a tax professional for specific guidance.

State & Utility Rebate Programs (2026)

These programmes are current as of April 2026. Amounts and availability change — always verify directly with your utility before purchasing. Most require ENERGY STAR certification.

California
SoCal Gas
$100–$200
PG&E
$100–$150
SMUD
$100
Massachusetts
MassSave
$200–$300
New York
NYSERDA
$100–$250
Con Edison
$100–$150
Washington
Puget Sound Energy
$100–$200
Seattle City Light
$75–$150
Oregon
Energy Trust of Oregon
$100–$200
Pacific Power
$75–$150
Colorado
Xcel Energy
$50–$150
Maryland
BGE
$75–$150
Pepco
$75–$125
New Jersey
PSE&G
$75–$150
Minnesota
CenterPoint Energy
$50–$100
Xcel Energy MN
$50–$100
Michigan
Consumers Energy
$50–$100
Illinois
ComEd/Nicor Gas
$50–$100
Texas
CPS Energy
$50–$100
Oncor
$50–$100
Arizona
APS
$50–$100
SRP
$50–$100
Pennsylvania
PECO
$50–$100
Florida
FPL
$50–$100
Find your local rebate: Not listed above? Visit dsireusa.org — the definitive US rebate database — and search your state for active water heater incentives.

Manufacturer Rebates & Promotions

Rinnai
$50–$200
Seasonal promotions. Check rinnai.us/rebates
Check current offers →
Navien
$100–$200
Rebate centre on Navien website; varies by season
Check current offers →
Rheem
$50–$150
Home Depot promotions + manufacturer rebates stacked
Check current offers →
Home Depot
0% financing
Project Loan and Consumer Credit Card promotions on qualifying purchases
Check current offers →
Lowe's
0% financing
Advantage Card deferred interest on qualifying water heater purchases
Check current offers →

How to Stack Incentives for Maximum Savings

Example: Massachusetts homeowner, ENERGY STAR Rinnai gas unit
MassSave rebate
$200–$300
Rinnai manufacturer promotion (seasonal)
$50–$150
Utility conservation programme credit
$50–$100
Home Depot 24-month 0% financing
Interest savings
Total potential savings
$300–$550

Documentation to Keep for Rebate Claims

Purchase receipt
From retailer or installer; must show model number and price
ENERGY STAR certification
Usually shown on packaging — note the certification number
Installer invoice
Showing contractor name, license number, and work scope
Permit (if issued)
Some programmes require proof of permitted installation
Before/after photos
Some utility programmes request photographic evidence
Completed rebate form
Download from your utility's website; submit within their deadline

Frequently Asked Questions

Yes. If you completed a qualifying tankless water heater installation in 2025, you can claim the 25C Energy Efficient Home Improvement Credit on your 2025 tax return (filed in early 2026). The credit is 30% of cost, up to $600 for a qualifying water heater. Ensure the unit is ENERGY STAR-certified and keep your receipts and the product's ENERGY STAR certification number.
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