Utility rebates from DTE Energy and Consumers Energy are the main incentives for Detroit homeowners now that the federal 25C credit has ended. Furnace and AC replacements need a mechanical permit. Michigan licenses mechanical contractors, and you can check a license online.
Does DTE give rebates for a new furnace, AC or heat pump?
Yes. DTE Energy offers replacement rebates on natural gas furnaces rated 95% AFUE or higher and tune-up rebates for furnace tune-ups with combustion analysis. For electric customers, it lists rebates on air-source and ground-source heat pumps and ductless mini-splits. A DTE participating contractor must do the work.
We are a participating contractor with DTE's rebate programs. Amounts and dates change, so ask which rebate applies to your equipment and check DTE's current rules. New construction and first-time installations do not qualify for the furnace rebate.
What rebates does Consumers Energy have?
Consumers Energy's heating and cooling rebates cover higher-efficiency furnaces, central air conditioners, air-source, ground-source and ductless heat pumps, and tune-ups. Only systems installed, or tune-ups done, by a Consumers Energy participating contractor qualify.
We are a participating contractor with Consumers Energy as well. Whether you use DTE or Consumers Energy depends on your address and which company supplies your gas and electricity.
Is there still a federal tax credit for a furnace or heat pump?
No, not for new installs. The IRS says the Energy Efficient Home Improvement Credit applies to qualifying property placed in service from January 1, 2023 through the end of 2025. Equipment installed after December 31, 2025 does not qualify.
Some websites, including cost guides, still describe the credit. If you installed equipment in 2025, ask a tax preparer whether you can claim it on that return.
Are there income-based programs to help replace a furnace?
Yes. Michigan's State Emergency Relief program, run by MDHHS, covers repair or replacement of a non-working furnace for eligible homeowners. The state also runs the Michigan Home Energy Rebates (MiHER) program for income-qualified households, but its website says new income-qualified applications are paused for now in the Detroit district.
Check with MDHHS and your utility for what is open now. Be wary of anyone who charges a fee to get you into a free program.
Do I need a permit to replace a furnace?
Yes. In Detroit, the Buildings, Safety Engineering and Environmental Department (BSEED) requires a permit for furnace and other mechanical work. Licensed contractors apply online. A homeowner may apply for a single-family home with proof of ownership.
Michigan's mechanical rules say work must not start until the permit is issued, with an exception for replacing minor parts. We pull the permit and schedule the inspection for replacements we install.
The installer didn't pull a permit. What happens now?
If the installer didn't pull a permit, ask them to pull one now and schedule the inspection. Without a permit and inspection, safety problems may go unnoticed, and it can cause trouble when you sell or file an insurance claim.
If the contractor refuses, you can contact the city building department. Doing mechanical work without a required permit is something the state's Bureau of Construction Codes takes complaints about.
How do I check if an HVAC contractor is licensed in Michigan?
Use LARA's Find or Verify a Licensed Professional or Business search on michigan.gov to check a mechanical contractor's license. Michigan licenses mechanical contractors by classification, such as HVAC equipment, ductwork and hydronic heating, so check that the license covers the work you need.
A homeowner may do mechanical work on a single-family home they live in without a license, but still needs a permit. Anyone you hire should be licensed. The Heating and Cooling Company Of Detroit is licensed and insured.
The only way to get a real price for your home is an on-site visit and a written quote. Call or text (313) 488-2188.