EmPOWER Maryland Commercial HVAC Rebates: 2026 Guide

EmPOWER Maryland in 2026: What Building Owners Need to Know

Replacing an RTU, chiller, or VRF system is a capex decision, and in 2026 EmPOWER Maryland incentives can move the payback math significantly. This guide covers the current commercial and industrial HVAC incentives offered through Maryland’s utilities — BGE, Pepco, Delmarva Power, Potomac Edison, and SMECO — as of August 2026, with figures taken from each utility’s published 2026 program materials.

What Changed From 2025

• Pepco and Delmarva Power boosted prescriptive HVAC incentives by 40% in June 2026. Heat pump and VRF incentives went from $500/ton to $700/ton, with eligible chillers also qualifying for enhanced incentives. Preapproval and online application are required.
• 2026 is the final year of the 2024–2026 EmPOWER program cycle. Incentive structures reset when the next cycle begins, so projects scoped this year lock in known rates.
• Program goals now include greenhouse gas reduction alongside energy savings, which is why electrification measures (air source and water source heat pumps, VRF) carry the strongest per-ton values.

Overview of EmPOWER Maryland

Established under the EmPOWER Maryland Energy Efficiency Act of 2008, the program is funded through a charge on utility bills and administered by the state’s utilities. Since inception it has delivered $14.5 billion in savings on installed measures. For commercial buildings, that funding takes the form of prescriptive rebates on named equipment, custom incentives for engineered projects, and instant discounts at participating distributors.

2026 Commercial HVAC Incentives by Utility

Pepco & Delmarva Power — Energy Savings for Business

Current prescriptive incentives for commercial HVAC measures (standard rates, with the June 2026 boosted rates in parentheses):

• Air source heat pumps, mini split heat pumps, and VRF (no heat recovery): $500/ton ($700/ton boosted)
• Water source heat pumps, A/C-only units, water-cooled A/C: $300/ton ($420/ton boosted)
• Geothermal: $500–$700/ton ($700–$980/ton boosted)
• PTACs/PTHPs: $75–$135 per unit; hotel room HVAC controls: $140/room
• Variable frequency drives: $500–$5,000 per unit ($700–$7,000 boosted)
• EC motors: $100–$400 per unit; smart thermostats: $100 each

Small businesses (average monthly demand of 100 kW or less) can have up to 70% of total project cost covered; medium and large businesses up to 50%. Preapproval is required before installation.

BGE — Energy Solutions for Business

Incentives cover up to 50% of total cost for retrofit projects and up to 75% of the cost difference between standard- and high-efficiency equipment for new construction and end-of-life replacement. All commercial, industrial, government, institutional, and nonprofit customers on rate schedules G, GS, GL, P, and T are eligible, regardless of energy supplier. Prescriptive, custom, and instant-discount tracks are available.

SMECO — Business Solutions

SMECO covers up to 75% of incremental cost when replacing older equipment with high-efficiency alternatives, with no detailed engineering analysis required. Facilities averaging 85 kW demand or less qualify for the Small Business Solutions program, and HVAC tune-up incentives can cover up to 75% of service costs.

Potomac Edison

Potomac Edison offers prescriptive HVAC incentives, instant discounts through participating distributors, a direct-install track for smaller facilities, retro-commissioning for existing buildings, and custom incentives for larger retrofit and process projects in Western Maryland.

Rebates are only half the capex picture — federal rules shifted this year too. See our companion guide to federal tax incentives for commercial HVAC in 2026, including the Section 179 expensing limits that now do the heavy lifting.

Utilities adjust incentive levels during the program year. Where a figure matters to your project decision, we confirm current values with the utility when we scope the work.

Eligibility Criteria

• Location: the facility must be in Maryland and served by a participating utility (BGE, Pepco, Delmarva Power, Potomac Edison, or SMECO).
• Project type: retrofits, end-of-life replacements, and new construction all qualify under different incentive structures.
• Equipment standards: installed equipment must meet the utility’s published efficiency ratings (SEER2, EER, IEER, depending on measure).
• Preapproval: most prescriptive and all custom projects require approval before installation begins. Skipping this step forfeits the incentive.

Application Process

1. Confirm the equipment appears on your utility’s qualifying-measures list.
2. Submit the application with equipment specifications and project scope.
3. Receive preapproval before ordering or installing anything.
4. Complete installation to the approved specification.
5. Pass post-installation verification where required.
6. Receive the incentive payment.

Additional Resources

• Pepco Energy Savings for Business and current program updates
• BGE Energy Solutions for Business
• SMECO Commercial Programs
• Potomac Edison Business Programs
• Maryland Energy Administration — EmPOWER

Making the Numbers Work for Your Building

At $700/ton, a 60-ton VRF replacement in Pepco territory carries a $42,000 incentive before efficiency savings are counted — the kind of figure that changes an equipment deferral into an approved project. Arminco Air handles EmPOWER paperwork, preapproval, and post-installation verification as part of commercial HVAC projects across Maryland, Washington DC, and Northern Virginia from our Sterling, VA base.

Call (703) 430-7100 to scope a project against 2026 incentive rates, or send us a request through our contact page.