Heat Pump Rebates and Incentives: State-by-State Guide 2026
Heat pump rebates in 2026 can still cover 30% to 100% of your installation cost — but the mechanism changed. With the 25C federal tax credit gone, HOMES and HEAR federal rebate programs are now the primary federal incentives, and strong state programs in Massachusetts, New York, Colorado, Maine, and California remain active. A $15,000 heat pump installation can still cost as little as $3,000 out of pocket for income-qualifying households. Here is how to stack every available incentive in 2026.
Federal Heat Pump Incentives in 2026
The 25C Credit Expired — What You Need to Know
The Section 25C Energy Efficient Home Improvement Credit — which provided 30% of heat pump costs up to $2,000 per year — was eliminated by the One Big Beautiful Bill Act (OBBBA, P.L. 119-21), signed July 4, 2025. The credit applied to systems placed in service through December 31, 2025. Heat pumps installed on or after January 1, 2026 do not qualify, regardless of when the contract was signed or deposit paid. The IRS uses the "placed in service" date — when the equipment was installed and operational.
If your heat pump was installed and operational before December 31, 2025, you can still claim the 25C credit on your 2025 tax return using IRS Form 5695.
HOMES and HEAR Programs (Now the Primary Federal Incentives)
The Inflation Reduction Act created two major rebate programs administered by individual states. Unlike tax credits, these are funded through state energy office grants and were not terminated by the OBBBA:
| Program | Full Name | Low-Income Rebate | Moderate-Income Rebate | Market-Rate |
|---|---|---|---|---|
| HEAR | Home Electrification and Appliance Rebates | Up to $14,000 | Up to $14,000 (50% costs) | Not eligible |
| HOMES | Home Owner Managing Energy Savings | Up to $8,000 | Up to $4,000 | Up to $4,000 |
The HEAR program offers point-of-sale rebates for specific electrification upgrades, including up to $8,000 for a heat pump HVAC system and $1,750 for a heat pump water heater. Income eligibility is based on Area Median Income (AMI): households under 80% AMI get 100% of costs covered (up to caps); households between 80% and 150% AMI get 50% of costs covered.
The HOMES program rewards whole-home energy savings. If your retrofits achieve 35% or more energy reduction, low-income households receive up to $8,000 and others receive up to $4,000. These rebates can be stacked with state programs and utility rebates.
Which States Have Launched These Programs
As of mid-2026, the majority of states have launched their HOMES and/or HEAR programs. States with particularly robust programs include New York, California, Colorado, Maine, Massachusetts, and Washington. Check your state energy office or the DOE's HOMES/HEAR tracker for current funding availability — programs are first-come, first-served.
State-by-State Heat Pump Incentives
Top States for Heat Pump Rebates
- Maine: $2,000–$4,000 Efficiency Maine rebate + HEAR stack. Combined savings can exceed 70% of installation cost. Maine leads the nation in heat pump adoption per capita.
- Massachusetts: MassSave offers up to $8,500 for whole-home heat pump conversions (at $2,650/ton), plus 0% financing through the HEAT Loan program. Combined with HEAR, total incentives can approach $15,000+. No income limit for Mass Save.
- New York: NYSERDA NYS Clean Heat offers $5,000–$12,000 depending on utility territory and whether fossil fuel equipment is decommissioned. EmPower+ program covers income-eligible households at higher levels.
- Colorado: $1,000 state heat pump tax credit (2026 rate, no income restriction) plus utility rebates from Xcel Energy and Black Hills Energy. HEAR also active through Colorado Energy Office.
- California: TECH Clean California offers $3,000–$5,000 for heat pumps replacing gas furnaces, with adders for low-income and disadvantaged communities. HEAR also active.
States with Growing Programs
Several states have recently launched or expanded heat pump incentive programs. Illinois, Michigan, Minnesota, Oregon, and Washington all offer substantial rebates that combine with federal HEAR incentives. Even in states without strong state programs, utility-level heat pump rebates exist in most major service territories.
Utility-Specific Rebates
Beyond state programs, many electric utilities offer their own heat pump rebates. These typically range from $200 to $3,000 and stack with federal and state incentives. Contact your electric utility directly — many have expanded rebate programs following the expiration of federal tax credits. Some utilities also offer reduced electricity rates for homes heated with heat pumps.
How to Stack Heat Pump Incentives in 2026
The Optimal Stacking Strategy
With 25C gone, the stacking order in 2026 is: (1) point-of-sale HEAR rebates to reduce upfront cost; (2) state rebates or credits (Massachusetts, New York, Colorado, etc.); (3) utility rebates. In many states, this stacking can still reduce a $15,000 heat pump installation to $3,000–$5,000 for income-qualifying households.
Example: Stacking for a Low-Income Household
Consider a Massachusetts household at 70% AMI installing a $16,000 whole-home heat pump system.
| Incentive Source | Category | Amount |
|---|---|---|
| HEAR | Heat pump | $8,000 |
| Mass Save | Whole-home rebate ($2,650/ton × 3 ton) | $7,950 |
| National Grid / Eversource (utility) | Additional | $500 |
| Total Incentives | $16,450 |
Net cost: effectively $0 for this household — incentives exceed the project cost. Annual heating savings vs. oil or gas: $1,200–$1,800.
Choosing the Right Heat Pump
Types of Heat Pumps
Air-source heat pumps (ASHPs) are the most common and affordable, costing $4,000–$8,000 for a ducted system or $3,000–$6,000 per zone for ductless mini-splits. Ground-source (geothermal) heat pumps cost $20,000–$40,000 but offer higher efficiency — the 25D geothermal credit also expired Dec 31, 2025, so check HEAR for geothermal eligibility instead. Heat pump water heaters cost $1,500–$3,500 installed.
2026 Refrigerant Rule: What to Know
Starting in 2026, new residential heat pumps must use low global warming potential (GWP) refrigerants — specifically R-32 or R-454B, replacing the old R-410A standard. Massachusetts Mass Save now requires R-32 or R-454B to qualify for rebates. Buying a next-generation refrigerant system protects against future R-410A service cost increases as the phasedown advances.
Efficiency Requirements for Incentives
Most HEAR and state rebate programs require minimum efficiency ratings. Look for ENERGY STAR certified systems with CEE Tier 1 or higher efficiency (typically SEER2 16+ / HSPF2 9.5+). Always confirm efficiency requirements with your state program before purchasing.
FAQ
How much can I get in heat pump rebates in 2026?
Total available heat pump incentives range from $2,000 to over $15,000 depending on your income level, state, and utility. Low-income households (under 80% AMI) can receive up to $8,000 in HEAR rebates for the heat pump alone, plus HOMES rebates and state programs. Market-rate households typically qualify for $2,000–$5,000 in combined state and utility incentives. The federal 25C tax credit expired December 31, 2025 and is no longer available.
Is the federal 25C heat pump tax credit still available in 2026?
No. The Section 25C Energy Efficient Home Improvement Credit expired December 31, 2025, eliminated by the One Big Beautiful Bill Act (P.L. 119-21, signed July 4, 2025). Heat pumps installed in 2026 do not qualify. However, HEAR rebates (up to $8,000, income-restricted) and strong state programs remain available as replacements.
What is the income limit for HEAR heat pump rebates?
HEAR rebates are available to households earning up to 150% of Area Median Income (AMI). Households under 80% AMI receive 100% of costs covered (up to the $8,000 heat pump cap). Households between 80% and 150% AMI receive 50% of costs covered. Households above 150% AMI are not eligible for HEAR — but can access many state programs and utility rebates that have no income limit.