Rules and Refrigerants

Contractor groups want 25C, 25D and 179D back, and expect the next refrigerant fight in the states

ACCA and PHCC lobbyists told an ACHR News forum that the midterms don't change the math in the Senate, and that state refrigerant bills are coming.

By The Gradient Report Staff

Key points

  • The Air Conditioning Contractors of America and the Plumbing-Heating-Cooling Contractors National Association support restoring the 25C and 25D residential credits and the 179D commercial buildings deduction, ACCA's Sean Robertson said at an ACHR News forum.
  • The 2025 tax law ended 25C and 25D after Dec. 31, 2025, and ended 179D for buildings whose construction begins after June 30, 2026, according to the IRS.
  • Rep. Brian Fitzpatrick, who ACHR News says had introduced a bill on the commercial tax credit, lost his seat on Nov. 3, the Associated Press projected.
  • Robertson said refrigerants will be the biggest concern in state legislatures and showed a map of 14 states.

The Air Conditioning Contractors of America and the Plumbing-Heating-Cooling Contractors National Association want Congress to bring back three energy tax incentives that ended under last year's tax law, but their lobbyists said the midterm results won't make that easier. Sean Robertson, ACCA's vice president of government relations, and Mark Valentini, PHCC's vice president of legislative affairs, spoke at a session called "The Morning After: What Will the Election Mean for Contractor Priorities?" at the ACHR News HVAC Contractor Forum in Frisco, Texas, ACHR News reported on Nov. 4.

Robertson said the two groups "support bringing back 25C, 25D, 179D," but that "planning for tax legislation is going to be pretty tough" in the next Congress. Neither party came out of the election with the 60 Senate votes needed to move its agenda easily, ACHR News wrote. Robertson said the result "doesn't fundamentally alter that math." "You still need 60 votes to get things done," he said.

What ended, and when

Public Law 119-21, signed July 4, 2025, set end dates for all three. According to the IRS:

  • The 25C energy efficient home improvement credit is not allowed for property placed in service after Dec. 31, 2025.
  • The 25D residential clean energy credit is not allowed for expenditures made after Dec. 31, 2025.
  • The 179D energy efficient commercial buildings deduction is not allowed for property whose construction begins after June 30, 2026.
When the three incentives endedEnd dates set by Public Law 119-21, as described by the IRSWhen the three incentives endedEnd dates set by Public Law 119-21, as described by the IRSJuly 4, 2025Public Law 119-21 signedDec. 31, 202525C: no credit for property placed in service after this date25D: no credit for expenditures made after this dateJune 30, 2026179D: no deduction for property whose construction begins after this dateSource: IRS, FS-2025-05, Aug. 21, 2025. Chart: The Gradient Report.

ACHR News reported that both groups want any new incentives tied to proper installation and system performance rather than to equipment efficiency ratings. Robertson described that as "shifting them away from more efficient boxes."

Rep. Brian Fitzpatrick, a Pennsylvania Republican who ACHR News said "had previously introduced a bill on the commercial tax credit," lost his race on Nov. 3. The Associated Press projected Democrat Bob Harvie the winner in Pennsylvania's 1st Congressional District, The Philadelphia Inquirer reported. "We're searching for new Republican champions for tax credit legislation," Robertson said.

Valentini said there are "probably about ... four or five working weeks left in Congress for the remainder of the year." "They've got to get spending bills done," he said. ACHR News wrote that an omnibus spending package or a series of smaller "minibus" bills could carry HVAC priorities, with tax provisions and permitting reform among the candidates.

ACCA and PHCC said a narrow Senate makes new tax legislation difficult in the next Congress.
ACCA and PHCC said a narrow Senate makes new tax legislation difficult in the next Congress.AI-generated illustration

Refrigerants in the states

Robertson said changes in state legislatures will put refrigerants at the top of the list. "When I see those state legislative maps shifting, refrigerants are going to be the biggest concern," he said.

ACHR News wrote that states moving ahead on their own, "like Washington state and New York," could force the next refrigerant transition, after the current move from R-410A to A2L refrigerants, and that the policies could reach R-290, or propane, in residential systems. Valentini said the industry "worked very hard to win the AIM Act so we could have some kind of long-term certainty." "They're trying to apply this European standard to residential infrastructure that's a lot different," he said.

Robertson showed a map labeled "Clean Heating Coalition," which ACHR News described as showing states targeted for direct lobbying. The 14 states on it are Washington, Oregon, California, Colorado, New Mexico, Michigan, Wisconsin, Illinois, Pennsylvania, New York, New Jersey, Maryland, Massachusetts and Maine. "If you have your state name on this map, it's time to be very afraid," Robertson said.

The 14 states on the "Clean Heating Coalition" mapStates on the map ACCA's Sean Robertson showed, as listed by ACHR News. Tile layout, not to scale.The 14 states on the "Clean Heating Coalition" mapStates on the map ACCA's Sean Robertson showed, as listed by ACHR News. Tile layout, not to scale.AKAKME (on the map)MEWI (on the map)WIVTVTNHNHWA (on the map)WAIDIDMTMTNDNDMNMNIL (on the map)ILMI (on the map)MINY (on the map)NYMA (on the map)MAOR (on the map)ORNVNVWYWYSDSDIAIAININOHOHPA (on the map)PANJ (on the map)NJCTCTRIRICA (on the map)CAUTUTCO (on the map)CONENEMOMOKYKYWVWVVAVAMD (on the map)MDDEDEAZAZNM (on the map)NMKSKSARARTNTNNCNCSCSCDCDCOKOKLALAMSMSALALGAGAHIHITXTXFLFLSource: ACHR News, "The Midterms Changed the Map. What's Next for HVAC?", Nov. 4, 2026.Chart: The Gradient Report.

Robertson asked contractors to contact their state legislators. "These are folks who are in your community," he said.

Sources

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