Heat Pump Rebates 2026: Federal, State & Utility Programs
Heat pumps became the most heavily incentivized home upgrade in the country when the Inflation Reduction Act passed — and they remain the biggest rebate opportunity in 2026 despite the tax credit landscape changing significantly. The 25C tax credit that used to cover heat pumps expired December 31, 2025, killed by the One Big Beautiful Bill. But the two federal rebate programs — HEAR and HOMES — are very much active, and they can get you more money than the old tax credit ever could.
The math is genuinely compelling. A low-income household replacing an aging gas furnace and central AC with a ducted heat pump could receive $8,000 from HEAR alone, before any state or utility rebates enter the picture. Layer in a HOMES whole-home retrofit for air sealing and insulation, state-level incentives, and utility rebates, and the total assistance on a $15,000 project can exceed the total project cost. Use our heat pump rebate calculator to see exact numbers for your situation.
Heat Pump Rebates in 2026: What Survived
Let’s be direct about what the OBBB changed. Before December 31, 2025, homeowners could claim a 30% federal tax credit (up to $2,000) for heat pump installation under the 25C credit. That is gone. The One Big Beautiful Bill terminated 25C along with the 25D solar and battery credit at year-end 2025.
What survived:
- HEAR (HEEHRA) — $4.5 billion in direct rebates for appliance electrification, including heat pumps. Up to $8,000 for a ducted heat pump; $4,000 for mini-splits. Requires household income below 150% of Area Median Income.
- HOMES — $4.3 billion for whole-home energy performance retrofits. Heat pumps often anchor HOMES projects because of their massive energy savings impact. Rebates up to $8,000 for low-income households.
- State programs — Dozens of states run their own heat pump incentive programs, entirely separate from federal money.
- Utility rebates — Most major utilities offer rebates on heat pumps, especially as they encourage load shifting to electricity.
The net result: if you qualify by income, the 2026 rebate landscape is better than the 2024 tax credit landscape was — more money, faster delivery, no waiting until tax season. If you are above 150% AMI, you lost the most with the 25C expiration and have fewer options now.
HEAR Heat Pump Rebate: Up to $8,000
HEAR — the High-Efficiency Electric Homes Rebate Act, often called HEEHRA — is the most direct path to heat pump rebate money in 2026. No energy modeling required, no whole-home retrofit required. Replace a qualifying heat pump and get the rebate at the point of sale.
Here is the breakdown by income tier:
| Equipment Type | ≤80% AMI Rebate | 80–150% AMI Rebate | SEER2 Minimum |
|---|---|---|---|
| Ducted air-source heat pump | $8,000 | $4,000 | ENERGY STAR certified |
| Ductless mini-split (single zone) | $4,000 | $2,000 | ENERGY STAR certified |
| Ductless mini-split (multi-zone) | $4,000 per system | $2,000 per system | ENERGY STAR certified |
| Ground-source (geothermal) heat pump | $8,000 | $4,000 | ENERGY STAR certified |
The rebate covers both the equipment cost and installation labor. Most states run HEAR as a point-of-sale program — meaning your contractor applies the rebate as a discount on your invoice rather than you filing for reimbursement afterward. You pay the net amount out of pocket and never see the full sticker price.
Not sure which income tier you fall into? Our income eligibility guide walks through how AMI works, including HUD income limits by metro area.
One thing HEAR does not cover: ground-source heat pump drilling and excavation costs, only the equipment and mechanical installation. Geothermal installation runs $15,000–$30,000 total; the $8,000 rebate is meaningful but covers a minority of the total cost.
HOMES Program and Heat Pumps
While HEAR pays a flat rebate per appliance, HOMES works differently — it rewards the overall energy savings your whole-home project achieves. Heat pumps are central to most HOMES projects because replacing a gas furnace with a heat pump is the single upgrade with the highest energy savings impact per dollar.
A typical whole-home HOMES project might include: air sealing, attic insulation, and a ducted heat pump replacing an old gas furnace. This combination routinely achieves 25–40% total energy reduction — well above the 15% minimum for HOMES rebates. See our HOMES program guide for the complete picture on energy savings requirements and rebate tiers.
The key distinction: you cannot use HOMES for the heat pump alone. You need the whole-home performance approach. But if you are planning a more comprehensive retrofit anyway, the HOMES rebate (up to $8,000 for low-income households) layers on top of the HEAR heat pump rebate for the same home — they cover different project components.
For stacking strategies, see our dedicated guide to stacking energy rebates.
Heat Pump Types: Which Qualifies?
Not all heat pumps are equal for rebate purposes. Here is what you need to know about each type:
Ducted Air-Source Heat Pumps
The most common replacement for gas furnace + central AC systems. Uses your existing ductwork to distribute heated or cooled air. Gets the highest HEAR rebate ($8,000 for low-income). Best for homes that already have ducts in reasonable condition.
Efficiency requirement: Must be ENERGY STAR certified. For 2026, this typically means SEER2 ≥16 (cooling) and HSPF2 ≥9.5 (heating) for split systems.
Ductless Mini-Splits
Individual units mounted on walls or ceilings, each controlled independently. Ideal for homes without ductwork, additions, or rooms with comfort problems. Single-zone systems get $4,000 (low-income); multi-zone systems get $4,000 per system.
Mini-splits are also the go-to solution for electrifying homes that currently use window AC and baseboard electric heat — dramatically more efficient than either.
Heat Pump Water Heaters
A separate category from HVAC heat pumps, covered by a different HEAR rebate line item. The heat pump water heater rebate is $1,750 for low-income households. See our full water heater rebates guide and water heater rebate calculator for details.
Ground-Source (Geothermal) Heat Pumps
The most efficient option available — typically 400–500% efficient versus 200–300% for air-source. Uses the earth’s constant underground temperature instead of outdoor air. Higher upfront cost ($15,000–$30,000+) but lower operating costs. The HEAR rebate is the same as for ducted air-source ($8,000 low-income), though the 25D tax credit that previously covered geothermal systems expired December 31, 2025.
Cold-Climate Heat Pumps
A subcategory of air-source heat pumps that maintain high efficiency even at outdoor temperatures down to -15°F or lower. Important for homeowners in New York, the upper Midwest, and mountain states. Cold-climate models must still be ENERGY STAR certified to qualify for HEAR rebates.
State-Level Heat Pump Rebates
On top of the federal HOMES and HEAR programs, many states run their own heat pump incentive programs. These are funded with state appropriations rather than federal IRA money, so they are not subject to the same income requirements and often serve all income levels.
| State | Program | Heat Pump Rebate | Income Limit? |
|---|---|---|---|
| California | TECH Clean California | Up to $3,000 | Yes (enhanced for low-income) |
| Massachusetts | Mass Save | Up to $10,000 | No (tiered by efficiency) |
| New York | Clean Heat Program (NYSERDA) | Up to $2,500 | No |
| Colorado | Xcel Energy + CEO | Up to $2,000 | No |
| Oregon | Oregon Energy Trust | $500–$1,200 | No (enhanced for low-income) |
| Maine | Efficiency Maine | Up to $1,500 | Enhanced for low-income |
| Connecticut | Energize CT | Up to $1,500 | No |
| Illinois | Illinois Home Weatherization | Varies | Yes |
| Minnesota | Center for Energy and Environment | Up to $1,000 | Enhanced for low-income |
State programs change frequently. Check your state’s page for current availability and amounts. Massachusetts’ Mass Save program in particular is exceptionally generous — a $10,000 state rebate on top of a federal HEAR rebate makes heat pump adoption essentially free for qualifying households in that state.
Utility Company Rebates
Most electric utilities offer heat pump rebates independent of state and federal programs. Utilities benefit from electrification because it grows electricity sales (good for their business) and because heat pumps can be controlled to run during off-peak hours, reducing grid stress. That alignment of interests means rebates tend to be meaningful.
Common utility heat pump rebate ranges:
- Large investor-owned utilities (Pacific Gas & Electric, ConEdison, ComEd, etc.): $500–$2,500 for ENERGY STAR-certified ducted heat pumps
- Municipal utilities: Highly variable; some offer $1,000–$3,000, others have no program
- Rural electric cooperatives: Many are building programs with federal Rural Energy Savings Program funding; rebates range from $200–$1,000
To find your utility’s rebate, search your utility name plus “heat pump rebate” or check our state rebates index which links to major utility programs by state. You can also call your utility directly — most have dedicated energy efficiency hotlines.
Stacking Multiple Rebates
Here is where it gets interesting. For income-eligible households, multiple programs can apply to the same heat pump installation:
- HEAR rebate — $8,000 (low-income), applied at point of sale
- State rebate — $500–$10,000 depending on state (fully stackable with federal)
- Utility rebate — $500–$2,500 (also stackable)
Add a HOMES-funded whole-home project around the heat pump (insulation + air sealing + the heat pump) and you can add another $4,000–$8,000 in HOMES rebates for the non-heat-pump components.
Concrete example: A household at 70% AMI in Massachusetts installs a ducted heat pump ($12,000 installed). They receive $8,000 from HEAR, $10,000 from Mass Save, and $500 from their local utility. That’s $18,500 in rebates against a $12,000 project. The rebates exceed the cost. The contractor handles all the paperwork and the homeowner pays nothing upfront in a point-of-sale state.
For a full stacking strategy guide, see our how to stack energy rebates article.
How to Claim Your Heat Pump Rebate
The HEAR rebate process is simpler than HOMES because it does not require energy modeling. Here is the typical flow:
Step 1: Check Your Income Eligibility
Confirm you are below 150% of AMI for your area. Use our calculator or the income eligibility guide to verify your tier before getting quotes.
Step 2: Find a Participating Contractor
HEAR rebates are typically distributed through contractors enrolled in your state’s program. Ask contractors specifically: “Are you enrolled in the HEAR/HEEHRA rebate program?” Non-enrolled contractors cannot process the point-of-sale rebate.
Step 3: Choose an ENERGY STAR-Certified Unit
The equipment must be ENERGY STAR certified to qualify. Your contractor should verify this, but you can also check the ENERGY STAR product database at energystar.gov before your appointment.
Step 4: Provide Income Documentation
Most point-of-sale rebate programs require you to show income documentation at the time of purchase — your most recent tax return plus any additional documentation your state requires. Prepare these in advance.
Step 5: Receive the Discount
In point-of-sale states, the rebate appears as a line-item discount on your invoice. In reimbursement states, you pay full price and submit for a rebate check afterward (typically 4–8 weeks processing).
Also claim utility and state rebates separately. These require their own applications, usually submitted by your contractor or by you directly after installation. Do not let them expire — most have 60–90 day claim windows.
Ready to calculate your total heat pump rebate? Use our heat pump rebate calculator for a personalized estimate, or check the 2026 energy rebates guide for everything available this year. For a full picture of the HEAR program across all eligible appliances, read the HEAR program guide.