đź’µ Does a High-Efficiency Furnace Qualify for Rebates or Tax Credits in 2025?
🌍 Why Efficiency Matters More Than Ever in 2025
Heating isn’t just about comfort anymore — it’s about sustainability, cost savings, and climate responsibility.
In 2025, high-efficiency furnaces are taking center stage as homeowners seek to reduce both energy bills and carbon footprints. The U.S. government and many state utilities are rewarding this move with rebates and tax credits that make upgrading more affordable than ever.
As part of the Inflation Reduction Act (IRA), homeowners who install ENERGY STAR®-certified furnaces can qualify for federal tax credits up to $600 on eligible models.
👉 Learn more from the official ENERGY STAR HVAC tax credit page.
🧾 Understanding Furnace Efficiency (AFUE Ratings Simplified)
Before diving into rebates, it’s important to understand what makes a furnace “high-efficiency.”
AFUE, or Annual Fuel Utilization Efficiency, measures how effectively a furnace converts fuel into usable heat.
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Older furnaces (60–80% AFUE): Waste up to 40% of fuel energy.
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High-efficiency models (90–98% AFUE): Convert nearly all energy into heat, minimizing waste.
A 92% AFUE furnace, like the Goodman model above, means only 8% of energy is lost — enough to meet most rebate requirements under ENERGY STAR guidelines.
Check the ENERGY STAR Certified Gas Furnaces list to confirm if your furnace qualifies.
🏛️ Federal Tax Credits for High-Efficiency Furnaces in 2025
đź’ˇ What the Federal Credit Covers
The Energy Efficient Home Improvement Credit (25C), extended through the Inflation Reduction Act, covers:
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High-efficiency natural gas, propane, or oil furnaces
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Systems that are ENERGY STAR-certified
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Up to 30% of the total cost, capped at $600 per furnace
🗓️ Eligibility Window
This credit applies to systems installed from 2023 through 2032, giving homeowners a long runway to upgrade.
Find full details on IRS Form 5695: Residential Energy Credits.
đź’¸ State & Local Utility Rebates: Hidden Gold in Your ZIP Code
Beyond the federal credit, state and local utilities offer additional savings — sometimes up to $1,000 off.
🗺️ Examples by State
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California: Up to $400 through the PG&E Energy Efficiency Rebate Program
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New York: NYSERDA offers up to $700 for ENERGY STAR furnaces
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Illinois: Nicor Gas Rebates provide up to $350
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Massachusetts: Mass Save provides up to $1,000 for high-efficiency heating systems
You can explore all state programs in the DSIRE Renewable & Efficiency Database.
⚙️ What Qualifies as a High-Efficiency Furnace
To qualify for most rebates and tax credits, your system must meet or exceed certain efficiency thresholds:
| Furnace Type | Minimum AFUE | ENERGY STAR Required | Typical Rebate |
|---|---|---|---|
| Gas Furnace (North) | 97% | ✅ | $300–$800 |
| Gas Furnace (South) | 95% | ✅ | $200–$600 |
| Oil Furnace | 95% | ✅ | $200–$600 |
According to the Department of Energy, the minimum efficiency standard for new furnaces will rise by 2028 — making 2025 a great time to upgrade before new rules potentially raise costs.
🏠How Rebates and Credits Stack Together
Yes — you can combine rebates and credits!
Example:
If you purchase a Goodman 92% AFUE furnace for $2,400:
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Federal Tax Credit = $600
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Local Rebate = $350
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Total Savings: $950
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Final Cost: $1,450
That’s nearly 40% in total savings — just by claiming both.
🧠Savvy Tip: Keep All Documentation
You’ll need the following to file your credit claim:
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Proof of purchase (invoice)
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AHRI certificate number (verifies system efficiency)
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Manufacturer certification statement
Goodman’s GR9S920603BN model includes this documentation, simplifying the process.
🔋 The Environmental Impact of High-Efficiency Heating
Upgrading from a 70% AFUE furnace to a 92% model can reduce fuel use by up to 25%, cutting emissions by roughly 2.5 tons of COâ‚‚ annually.
See your exact carbon savings using the EPA Greenhouse Gas Equivalencies Calculator.
That’s like planting 60 trees each year — or offsetting nearly 5,000 miles of driving.
đź’¬ What Savvy Says
“Every efficient upgrade counts. A high-efficiency furnace doesn’t just heat your home — it cools your carbon footprint and your energy bills.”
With gas prices projected to stay high in 2025, efficiency pays off faster than ever.
🔧 How to Qualify for Rebates
To make sure your new furnace qualifies:
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Hire a licensed installer. DIY installations typically don’t qualify.
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Install before December 31, 2025.
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Register your system and warranty.
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Submit proof of ENERGY STAR qualification.
Find certified professionals through the ENERGY STAR Contractor Locator.
♻️ Bonus Rebates for Whole-Home Efficiency
In addition to furnace rebates, you may qualify for:
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Heat pump tax credits (up to $2,000)
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Smart thermostat rebates ($50–$100)
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Insulation and duct sealing incentives
Learn about combination incentives at the DOE’s Home Energy Rebate Programs page.
🌡️ Smart Thermostats and Furnace Efficiency
Pairing your furnace with a smart thermostat can boost savings even further.
The Google Nest Learning Thermostat and ecobee Smart Thermostat Premium both automatically adjust temperature cycles for optimal efficiency — reducing heating costs by up to 12% according to Nest’s energy savings study.
đź’¬ Real-World Example: The Rivera Family
The Rivera family in Denver replaced their 20-year-old furnace with a Goodman 92% AFUE model.
After one year:
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22% lower gas bills
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900 fewer therms used
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$950 in combined rebates and credits
“The rebates made the upgrade affordable — but the energy savings made it worth it.”
🌿 Why Goodman Is a Smart Choice
Goodman furnaces strike a balance between performance, sustainability, and affordability.
Key highlights of the GR9S920603BN model:
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92% AFUE rating
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9-speed ECM blower for airflow precision
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Compact 17.5" cabinet for easy installation
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Eligible for federal tax credits and rebates
Explore full details on the Goodman 92% AFUE Furnace.
🌎 Final Thoughts from Savvy
In 2025, a high-efficiency furnace is more than a home upgrade — it’s an eco-conscious investment.
Between federal credits, state rebates, and utility programs, homeowners can reclaim up to 40% of their furnace cost, while slashing emissions and bills alike.
For a system that balances comfort, cost-efficiency, and sustainability, the Goodman 92% AFUE 60,000 BTU Furnace is Savvy’s top pick for 2025.
In the next blog, we shall learn more about Why Goodman’s Build Quality Matters — Materials, Reliability & Warranty
