WaterFurnace International announced an average price increase of 3.9 percent across all residential product lines, parts, and accessories, effective May 25, 2026. The increase adds to a 1.1 percent tariff surcharge that remains in place — bringing the effective combined increase for many WaterFurnace products to approximately 5 percent on top of the already-elevated post-2020 price baseline.
WaterFurnace is the dominant manufacturer of residential and commercial geothermal heat pump equipment in North America — the ground-source heat pump systems that qualify for the Section 25D federal tax credit through 2032. For the geothermal contracting community, this increase is directly relevant to every quote currently in process or being prepared for projects where WaterFurnace equipment is specified.
The Timing Matters — Update Your Quotes Now
WaterFurnace's announcement of an effective date of May 25, 2026 gives contractors a specific window to evaluate open quotes and in-progress projects:
• Quotes issued before May 25 using current pricing: Any quote that has not yet been accepted before May 25 may need to be reissued with updated pricing after the effective date, depending on your quote terms and validity period
• Equipment ordered before May 25: Locking in current pricing on equipment for projects with confirmed scope and signed contracts before the effective date protects against the increase on those specific projects
• New projects quoted after May 25: Factor the new pricing into all quotes prepared after the effective date — use the updated WaterFurnace price list rather than the pre-increase list
• The 1.1% tariff surcharge: This existing surcharge should already be in your current pricing. The 3.9% increase is in addition to this surcharge, not inclusive of it
WaterFurnace International, the dominant North American geothermal heat pump manufacturer, announced a 3.9% average price increase on all residential products effective May 25, 2026 — adding to the existing 1.1% tariff surcharge and continuing the pattern of incremental price increases that have added approximately 40%+ to HVAC equipment costs since 2020.
Geothermal Equipment Pricing in the 25D Tax Credit Context
The WaterFurnace increase should be evaluated in the context of the Section 25D federal tax credit, which provides a 30 percent nonrefundable credit on qualifying geothermal heat pump installations through December 31, 2032. On a $40,000 geothermal installation, the 30 percent credit returns $12,000 to the homeowner — making a 3.9 percent equipment price increase (which adds perhaps $400 to $600 to the equipment cost on a typical residential project) a secondary consideration relative to the available tax benefit.
For contractors presenting geothermal proposals to homeowners, framing the price discussion in the context of the 25D credit remains the strongest presentation. The credit significantly changes the net cost calculation in ways that make equipment price increases less impactful on the buying decision than they would be for equipment categories without a comparable incentive.
The Broader May 2026 Price Increase Pattern
The WaterFurnace increase is part of a continued wave of HVAC product price increases that ACHR News has been tracking through May 2026. The overall pattern for May:
• Carlisle HVAC Brands: 3 to 5 percent effective May 1
• Systemair/Fantech: 3.5 to 5 percent by product group effective May 1; additional 6.5 percent on residential ventilation effective May 29
• Nu-Calgon: 15 percent on specific glycol products effective May 6
• Shurtape: 3.5 to 10 percent by product category effective May 7
• WaterFurnace: 3.9 percent average on all residential products effective May 25
Each increase is individually modest in percentage terms — but stacked across all product categories simultaneously, the cumulative impact on a typical HVAC installation project's material cost is meaningful. Contractors who have not updated pricing across all their product categories since January 2026 are likely under-pricing on the material cost component of their bids.
Frequently Asked Questions
How much is the WaterFurnace price increase?
WaterFurnace announced an average 3.9% price increase on all residential product lines, parts, and accessories effective May 25, 2026. This adds to an existing 1.1% tariff surcharge, bringing the effective combined increase to approximately 5% for most WaterFurnace products.
Does the WaterFurnace price increase affect geothermal tax credits?
The Section 25D federal tax credit provides a 30% nonrefundable credit on qualifying geothermal heat pump installations through 2032. A 3.9% equipment price increase adds a relatively small amount to total project cost compared to the $10,000-plus tax credit available to qualified homeowners — making the credit discussion more impactful than the price increase discussion in most geothermal proposals.
How should contractors handle the WaterFurnace price increase?
Review all open quotes issued before May 25 and confirm whether they need reissuing with updated pricing. Evaluate ordering equipment before May 25 for confirmed projects to lock in current pricing. Update your pricing templates and job cost calculators to reflect the new rates for all quotes prepared after the effective date.
