HOMES vs HEAR: Which Rebate Program Is Right for You?
Two Programs, Completely Different Logic
The Inflation Reduction Act created two distinct residential rebate programs that are often confused with each other. They have similar names, similar goals, but fundamentally different structures. Choosing the right one — or combining both — depends on what work you're doing and your income level.
Here's the core distinction: HEAR is equipment-based. Install a qualifying appliance, get a set rebate. HOMES is performance-based. Reduce your home's energy use, get paid based on how much you saved.
HEAR: The High-Efficiency Electric Home Rebate Act
HEAR was designed for households who can't wait for a full home energy overhaul. It pays direct rebates for specific eligible equipment categories:
| Equipment Category | Maximum Rebate | Notes |
|---|---|---|
| Heat pump (space heating/cooling) | $8,000 | Highest single-category rebate |
| Electrical panel upgrade | $4,000 | Must upgrade to minimum 200A in most states |
| Insulation and air sealing | $1,600 | Combined category |
| Heat pump water heater | $1,750 | Must be ENERGY STAR certified |
| Wiring and circuits | $2,500 | Wiring enabling other HEAR equipment |
| Electric stove/induction cooktop | $840 | Includes ranges and wall ovens |
| Electric dryer | $840 | Heat pump dryers get the same rebate |
| Windows and doors | $1,600 | Must meet ENERGY STAR requirements |
Total maximum HEAR rebate per household: $14,000.
HEAR eligibility is income-dependent. Households below 80% of Area Median Income get 100% coverage up to the limits. Households at 80–150% AMI get 50% coverage. Above 150% AMI, HEAR doesn't apply. For the full AMI explanation, see how AMI affects your rebates.
HOMES: Home Owner Managing Energy Savings
HOMES was designed for households doing comprehensive retrofits — whole-home projects that achieve measurable energy savings. The rebate is calculated based on your reduction in modeled or measured energy consumption:
| Energy Savings Achieved | Standard Rebate | Low-Income Rebate (below 80% AMI) |
|---|---|---|
| 20–35% reduction | $2,000 | $4,000 |
| 35%+ reduction | $4,000 | $8,000 |
Unlike HEAR, HOMES doesn't have income eligibility cutoffs — households above 150% AMI can still access HOMES. The rebate amount is just lower than for income-qualified households.
HOMES programs use two calculation methods:
- Modeled approach: An energy auditor uses software (REM/Rate, EnergyPlus) to model your home's energy use before and after improvements. The model predicts savings. Faster and less expensive, but requires a certified energy modeler.
- Measured approach: Actual energy bills are compared before and after improvements. More accurate but requires a full year of post-installation data, meaning you wait 12 months for your rebate.
Most state programs offer both options. The modeled approach is generally more practical for households who want timely rebates.
Side-by-Side Comparison
| Factor | HEAR | HOMES |
|---|---|---|
| How rebate is calculated | Per qualifying appliance installed | % energy savings achieved |
| Income limit | Must be below 150% AMI | No income cutoff (but doubled for low-income) |
| Maximum rebate | $14,000 total | $4,000 (or $8,000 low-income) |
| Proof required | Receipt + contractor documentation | Energy audit + model or measurement |
| When you receive rebate | After installation | After modeling or after 12 months measured |
| Eligible equipment | Specific list of appliances | Any improvement that saves energy |
| DIY eligibility | No — contractor required | Professional required for audit/model |
Can You Use Both Programs?
In most states that have launched both programs: yes. HOMES and HEAR are designed to be complementary. A household doing a comprehensive retrofit — replacing their furnace with a heat pump, upgrading the panel, adding insulation, and sealing air leaks — could claim HEAR rebates on the individual appliances and equipment, then also claim a HOMES rebate if the combined project achieves 20%+ whole-home energy savings.
This stacking is explicitly allowed in the authorizing legislation. State program administrators may have specific documentation requirements for households claiming both, so confirm with your state before applying.
Learn the full approach to stacking rebates for maximum savings.
Which Program Is Better for Common Scenarios
Scenario 1: Single appliance replacement (heat pump water heater only)
Winner: HEAR. HOMES pays based on whole-home savings; replacing a single water heater typically achieves 5–10% total household energy savings — below the 20% HOMES threshold. HEAR pays up to $1,750 directly for the equipment.
Scenario 2: Comprehensive whole-home retrofit (heat pump + insulation + air sealing)
Winner: Both. HEAR covers the heat pump ($8,000 max), insulation ($1,600 max), and panel upgrade if needed ($4,000 max). HOMES covers additional savings performance if the combined project clears 20% or 35%. Stack them for maximum value.
Scenario 3: High-income household above 150% AMI doing a full retrofit
Winner: HOMES only. HEAR is unavailable above 150% AMI. HOMES pays $2,000–$4,000 based on performance, no income restriction. Also investigate utility programs, which frequently have no income limits.
Scenario 4: Low-income household, single heat pump replacement
Winner: HEAR by a large margin. A household below 80% AMI gets up to $8,000 toward a heat pump under HEAR — the entire cost of many cold-climate heat pump installations. HOMES would pay $4,000–$8,000 for a comprehensive project, but you'd need the energy audit infrastructure. HEAR is faster and simpler for single-appliance projects.
Scenario 5: Major insulation project in an old, leaky house
Consider both. HEAR pays $1,600 directly for insulation/air sealing. But a major insulation project in a poorly insulated 1950s home might achieve 20–35% total energy savings — qualifying for $2,000–$8,000 in HOMES rebates on top. The HOMES potential significantly exceeds the HEAR amount here.
Where States Are With Each Program
Not all states have launched both programs. As of 2026:
- HEAR launched in: California, New York, Massachusetts, Colorado, Michigan, Illinois, Maine, Vermont, Minnesota, Rhode Island, and approximately 20 additional states
- HOMES launched in: Fewer states — HOMES is operationally more complex (requires energy modeling infrastructure) and fewer states have fully deployed it
- Neither launched: Several states that returned or rejected IRA funding (Florida, Iowa, and others) don't offer these programs
Check your state's current program status at California HEAR/HOMES programs, New York HEAR/HOMES programs, or Texas program availability.
The Application Process Compared
HEAR applications are generally straightforward: install qualifying equipment, submit receipts and contractor documentation to your state administrator, receive rebate. The complexity is in contractor eligibility verification and income documentation.
HOMES applications are more involved: get an energy audit, have the model run, submit application with energy model results, install improvements, submit completion documentation. If using the measured approach, you also wait for 12 months of post-installation utility bills.
For most households, HEAR is the faster, simpler starting point. If you're already planning a large project and have time to work with a certified energy auditor, HOMES adds meaningful value on top.
See the step-by-step rebate claiming guide for the application process in detail.