SEER2 rules, tax credits and AC rebates in Texas
If you are shopping for a new air conditioner or heat pump in Texas, you will run into two acronyms that affect both what you are allowed to install and what it might cost you after rebates: SEER2, the efficiency rating now required by federal rule, and 25C, a federal tax credit that homeowners often ask about and that has changed for 2026. Here is what is actually true right now, verified against the Department of Energy and IRS, plus the Texas utility rebates we could confirm directly.
What SEER2 is and why it changed
Starting 1 January 2023, the Department of Energy updated how central air conditioners and heat pumps are tested, moving from the old SEER rating to a new metric called SEER2, measured under a revised test procedure (DOE Appendix M1) that better reflects real-world duct resistance. At the same time, DOE introduced regional minimum efficiency standards, meaning the minimum SEER2 a newly installed system must meet depends on where in the country it is installed.
Texas is in the DOE's Southeast region
Texas falls in the group of states DOE calls the Southeast region for this rule, which also includes states like Florida, Georgia and Louisiana. According to DOE's own compliance guidance, beginning 1 January 2023 only basic models that meet the amended regional standards may be installed in this region. In practical terms, that means a split-system central air conditioner installed in Texas on or after 1 January 2023 must meet:
| System size | Minimum SEER2 in Texas |
|---|---|
| Under 45,000 Btu/h (roughly under 3.5 tons) | 14.3 SEER2 |
| 45,000 Btu/h and above (roughly 3.5 tons and up) | 13.8 SEER2 |
A contractor cannot legally install a system below these minimums in Texas, regardless of what is sitting in a warehouse. If you are getting quotes, the SEER2 rating should be on the AHRI certificate for the specific indoor and outdoor unit combination, not just the outdoor unit on its own, since DOE's guidance is specific that compliance is judged on the full combination as installed.
The federal 25C tax credit: what changed for 2026
Homeowners often ask about the federal Energy Efficient Home Improvement Credit, known as 25C, which used to cover up to $2,000 for a qualifying heat pump and up to $1,200 for other efficiency upgrades. That credit has ended. The IRS's own instructions for Form 5695, revised 30 April 2026, state plainly: "You can't claim energy efficient home improvement credits for expenditures or property placed in service after December 31, 2025." The credit was terminated early by the One Big Beautiful Bill Act, signed into law in July 2025.
What this means in practice:
- A qualifying heat pump or AC system installed and placed in service on or before 31 December 2025 can still be claimed on your 2025 federal tax return using IRS Form 5695.
- A system installed anytime in 2026 does not qualify for this federal credit, no matter how efficient it is.
- There is no indication on the IRS's page of the credit being reinstated for 2026; if that changes, it would show up as an update to Form 5695's instructions.
Texas utility rebates we could verify
With the federal tax credit gone for 2026 installations, utility rebates matter more. Programs change their rebate tables often, so these are the figures we found directly on each utility's own rebate page; always confirm the current numbers before you buy, since tiers and amounts are adjusted from year to year.
Austin Energy
Austin Energy's residential cooling and heating rebate page, last reviewed 24 February 2026, lists these tiers for central split and mini-split systems, available when you use an Austin Energy participating contractor and your existing system is at least 10 years old:
| System type and tier | Rebate |
|---|---|
| Central AC, Tier 1 (SEER2 15.2) | $600 |
| Central AC, Tier 2 (SEER2 17.0) | $700 |
| Central AC, Tier 3 (SEER2 18.0) | $800 |
| Heat pump, Tier 1 (SEER2 15.2, HSPF2 7.8) | $650 |
| Heat pump, Tier 2 (SEER2 16.0, HSPF2 8.0) | $750 |
| Heat pump, Tier 3 (SEER2 17.0, HSPF2 9.0) | $950 |
CPS Energy
CPS Energy's HVAC rebate page for San Antonio customers lists rebates of $90 to $310 per ton for qualifying central air conditioning and heat pump installations, and $50 to $75 for window units. Equipment must be installed by a Texas-licensed HVAC contractor, and CPS Energy requires applications be filed within a set window after installation, so confirm the current deadline on their site before you commit.
Oncor
Oncor, which serves much of North and West Texas, runs a residential energy efficiency rebate program that includes HVAC upgrades. We were not able to load Oncor's current rebate table directly to confirm specific dollar amounts at the time of writing, so check oncor.com for the current rebate figures and eligible equipment before you buy rather than relying on a number from a contractor or a third-party site.
What to do with this
Before you sign a contract, ask your contractor for the AHRI certificate showing the SEER2 rating of the exact system they are proposing, confirm it meets the Texas minimum above, and separately check your utility's current rebate page yourself rather than taking a contractor's word on the amount. For help vetting the contractor itself, see our guide to how to pick an HVAC company in Texas.
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Common questions
What SEER2 rating is required for a new AC in Texas?
Texas is in the DOE's Southeast region. Split-system central air conditioners installed on or after 1 January 2023 must meet 14.3 SEER2 if under 45,000 Btu/h, or 13.8 SEER2 if 45,000 Btu/h or larger.
Is the federal 25C tax credit still available for a new AC in 2026?
No. The IRS's Form 5695 instructions, revised 30 April 2026, state that energy efficient home improvement credits cannot be claimed for property placed in service after 31 December 2025. A system installed in 2026 does not qualify.
Does Austin Energy offer a rebate for a new air conditioner?
Yes. Austin Energy's rebate page lists $600 to $800 for qualifying central AC systems and $650 to $950 for heat pumps, depending on SEER2 tier, when installed by a participating contractor on a system 10 years or older.
Does CPS Energy offer an AC rebate in San Antonio?
Yes. CPS Energy's HVAC rebate page lists $90 to $310 per ton for qualifying central AC and heat pump installations, done by a Texas-licensed HVAC contractor.
Sources
- U.S. Department of Energy, central air conditioner regional standards compliance guidance (issued 16 December 2021)
- Internal Revenue Service, Instructions for Form 5695, Energy Efficient Home Improvement Credit (revised 30 April 2026)
- Austin Energy, residential air conditioning and heat pump rebate (last reviewed 24 February 2026)
- CPS Energy, HVAC rebates
Checked 2026-10-19.