Heat Pump Rebates in 2026: What’s Left After the Federal Credit Ended

Here’s the awkward part of shopping for a heat pump this year: the number on the quote didn’t change much, but one of the ways you used to knock it down disappeared.

For three years, almost every homeowner could count on the same $2,000 federal credit. It was simple, it was national, and installers quoted it automatically. That’s over. What replaced it isn’t one program — it’s dozens, and none of them are advertised to you.

The good news is that the money that’s left is often bigger than the federal credit ever was. Some utility programs pay four figures per ton. Some states hand you a discount right on the invoice. The bad news is that you have to go looking, and what you find depends on your zip code, your utility, your income and sometimes just what month it is.

This guide walks through every category of rebate that still exists in 2026, what each one typically pays, who qualifies, and how the money actually reaches you. Then it shows you the exact order to search so you don’t miss anything.

1. What changed, and exactly when

Two things happened, about a year apart, and they pull in the same direction.

The first was the tax credit. Section 25C, the Energy Efficient Home Improvement Credit, paid 30 percent of a qualifying heat pump’s cost up to $2,000 a year. The 2025 federal budget law (Public Law 119-21, signed July 4, 2025) terminated it for property placed in service after December 31, 2025. The companion Section 25D credit, which covered geothermal heat pumps at 30 percent with no dollar cap, ended for expenditures after the same date.

“Placed in service” is the phrase that matters. It means installed and running — not ordered, not paid for, not sitting in your garage. A system that started up on December 30, 2025 qualifies on your 2025 return. One that started up on January 2, 2026 does not. There’s no phase-out, no reduced rate, and no grandfathering for deposits paid in 2025. We covered the details when it happened in what to do now the federal credit has ended.

The second change is quieter but arguably bigger. The Inflation Reduction Act of 2022 funded two rebate programs — roughly $8.8 billion total — that states administer themselves. One is for whole-home energy savings. The other, originally branded Home Electrification and Appliance Rebates (HEAR), paid income-qualified households up to $8,000 toward a heat pump at the point of sale.

On May 29, 2026, the Department of Energy issued Program Notice 26-2, which renamed that program High-Efficiency Electric Home Rebates (HEEHR) — its original statutory name — and rewrote several core rules. The most consequential one for heat pump shoppers: the program no longer covers fuel switching. Rebates are now for upgrading from existing electric equipment to more efficient electric equipment, plus new construction. Swapping a gas, propane or oil furnace for a heat pump is, under that guidance, no longer an eligible retrofit.

Launched state programs were given three months from publication to bring their rules into line. Programs that hadn’t launched yet must align before they do. Existing approved rebate reservations were allowed to be honored, but no new ones outside the new rules.

The federal money didn’t disappear. It just stopped paying for the swap most homeowners actually want to make.

— on the 2026 HEEHR guidance change

2. The state-run federal rebates (HEAR, now HEEHR)

This is the program with the headline numbers, so it’s worth understanding properly — including why it may not apply to you.

The caps. The underlying statute sets a maximum of $8,000 toward a heat pump for space heating and cooling, $1,750 toward a heat pump water heater, and up to $4,000 toward an electrical panel upgrade, with a total ceiling of $14,000 per household across all measures. Those figures come from the law itself and were not changed by the 2026 notice.

The income tiers. Eligibility is based on area median income (AMI) for your county and household size, not a flat national number. There are two tiers:

Note what the percentages mean. A household under 80 percent AMI can in principle have the whole project paid for, up to the caps. A household between 80 and 150 percent AMI pays at least half, even if the rebate cap would allow more. So on a $12,000 install, the moderate-income tier tops out at $6,000, not $8,000.

The 2026 restriction. Here’s the part that changes the calculation for most readers. Under the May 2026 guidance, HEEHR rebates apply to upgrading existing electric equipment to more efficient electric equipment, and to new construction. If your home currently heats with a gas furnace, an oil boiler or a propane furnace, the program as revised does not cover replacing it with a heat pump.

Who does still qualify? Households heating with electric resistance — baseboards, wall heaters, electric furnaces with strip heat — and households replacing an older, less efficient heat pump. If that’s you, and you’re under 150 percent AMI, this is by far the largest incentive available and worth chasing hard.

Availability is the other catch. These are state-run programs funded from fixed pots. Some states launched in 2024 and 2025 and have already paused single-family rebates after exhausting reservations; others were still preparing to launch through 2026 and into 2027; a couple declined to participate at all. As of late summer 2026, published reporting indicated programs were live in a number of states and the District of Columbia, with more scheduled — but the picture shifts month to month, and we’d rather you check than trust a list in an article. Your state energy office page is the only authority.

3. State tax credits and state-run rebates

Separate from the federal money, a number of states run their own incentives with their own budgets. These fall into two shapes, and the difference matters for your cash flow.

State tax credits reduce what you owe when you file. Colorado is the clearest example: the state heat pump tax credit has been reported at $1,000 for a qualifying air-source heat pump in 2026 (higher for ground-source, lower for heat pump water heaters), and it’s structured unusually — a registered contractor claims it and is required to pass a defined minimum share through to you as a discount on the invoice. So you feel it as a price cut, not a tax refund. Other states have enacted or proposed credits, and the amounts move with legislative sessions. Your state department of revenue is the place to confirm.

State-run rebate programs pay cash or an invoice discount. These are usually funded by ratepayer surcharges or state climate funds and are often branded around the utility rather than the state — Mass Save in Massachusetts, NYS Clean Heat in New York, Efficiency Maine, Energy Trust of Oregon. Amounts range from a few hundred dollars to five figures for a whole-home conversion in the most aggressive states, with enhanced tiers for income-qualified households.

Almost all of them share three requirements. First, a listed model — usually ENERGY STAR certified, and in cold climates often a NEEP-listed cold-climate model with a minimum capacity retention at low temperature. If you’re not sure what separates those, our guide to SEER2, HSPF2 and COP explains the ratings programs actually check. Second, a participating or registered contractor. Third, pre-approval before work starts on the larger programs.

State programs also change mid-year more often than you’d expect. Budgets get topped up or run dry, per-ton amounts step down on a scheduled date, and application windows close. A program page that a search engine surfaced last month may describe a cycle that has already ended. Look for a “last updated” date, and if you can’t find one, call.

4. Utility rebates: the most reliable money left

If you only do one thing after reading this, do this one: go to your electric utility’s website and search “heat pump rebate.”

Utility rebates are the least publicized and most dependable incentive category in 2026. They’re funded by energy-efficiency charges already on your bill, they renew on annual or biennial cycles, and most of them have no income test at all. They’re also the reason two neighbours in different service territories can get wildly different deals on the same equipment.

Typical amounts run from about $300 to $3,000 for a qualifying air-source heat pump, with heat pump water heaters commonly in the $300 to $1,000 range. But the top of the market is much higher. Utilities in states with electrification targets have offered per-ton structures that add up fast: one Colorado program was reported in mid-2026 at roughly $2,250 per heating ton for cold-climate systems rated at 5°F, which on a three-ton install works out to around $6,750. Amounts like that don’t last forever, and that particular program was reported to be stepping down later in the year — which is exactly why you check the tariff yourself rather than trusting a number in a blog post.

A few structural things to know about utility programs:

1. Check both utilities, not just one

   Your electric utility runs the heat pump rebate. But if you’re leaving gas, your gas utility may also have a program — sometimes a weatherization rebate, occasionally a decommissioning incentive. Municipal utilities and rural electric co-ops often have their own programs that never appear in national databases.

2. Look for the per-ton structures

   Flat rebates are easy to compare. Per-ton rebates, sized by heating capacity at a low outdoor temperature, reward buying a properly sized cold-climate machine — and can be several times the flat amount. Getting the sizing right matters both for comfort and for the check, so insist on a proper Manual J load calculation.

3. Watch for the contractor requirement

   Many programs pay only through a participating installer list. Picking a contractor who isn’t on it can silently cost you thousands. Ask for their program registration number, not just a verbal yes.

4. Ask how and when you get paid

   Some utilities apply the rebate as an instant discount on your invoice. Others mail a check six to twelve weeks after paperwork is filed. A third group applies it as a bill credit spread over months. That difference matters if you’re budgeting the job.

Utility programs also tend to layer well. In most states you can take a utility rebate on top of a state rebate on top of a state tax credit, and the combined total can approach or exceed what the federal credit used to be worth. The limit is usually the project cost itself — most programs won’t let stacked incentives exceed what you actually paid.

5. Manufacturer and distributor promotions

The last category is the one your installer is most likely to bring up unprompted, because it comes out of someone else’s budget.

Manufacturers run seasonal promotions on matched systems — typically a few hundred to a couple of thousand dollars off a qualifying outdoor unit, indoor coil and controls bought together. They cluster in spring and autumn shoulder seasons when factories want to move inventory, and they’re often tied to a specific product family rather than the whole catalogue. Distributors layer their own spiffs on top, which is why the same brand can be priced differently by two contractors in the same town.

These promotions have real value, but they behave differently from public rebates in three ways. They’re usually structured as instant discounts through the dealer, so you never handle paperwork. They often require the full matched system — mixing an outdoor unit with an existing indoor coil will disqualify it and can also void the AHRI-certified performance rating your utility rebate depends on. And they’re not always passed through in full. A contractor who receives a $1,000 factory promotion may show you $500 of it.

There’s also a timing angle. Because promotions run seasonally and installer schedules are lightest in spring and autumn, those windows tend to combine a factory discount with softer labor pricing. Our 2026 cost guide covers the seasonal pricing pattern in more detail.

One caution: a manufacturer promotion is not a rebate program, and it carries no consumer protection beyond your contract with the installer. If the discount is conditional on financing through a particular lender, read the financing terms carefully — a promotional discount tied to a deferred-interest loan can cost more than it saves. We break those down in how to pay for a heat pump.

6. Every rebate type, side by side

Here’s the whole landscape in one place. Amounts are typical ranges reported in 2026 and vary enormously by state, utility and program cycle — verify every one of them before you sign a contract.

7. How to find what you actually qualify for

There’s a right order to this, and doing it out of order wastes time. Work from the most local and most reliable outward.

1. Your electric utility’s website, first

   Search the utility’s own site for “heat pump rebate” or “rebates” and look for a residential efficiency programs page. Find the current program year, the qualifying product list, the participating contractor list and the application deadline. Print or save the page — program terms change and you want a record of what you relied on. If you’re a municipal or co-op customer, this step is essential, because those programs often appear nowhere else.

2. Your gas utility, if you have one

   Even if you’re keeping gas as a backup, gas utilities frequently fund insulation and air sealing rebates. Since the 2026 federal guidance requires weatherization before heating upgrades in the HEEHR program, that work may be a prerequisite anyway — and it makes the heat pump work better regardless.

3. Your state energy office

   This is where the HEEHR and whole-home rebate programs live. Look for launch status, income tier calculators, the approved measure list and whether reservations are currently open. Many states publish a queue or waitlist. This is also where you’ll find state-funded programs that aren’t run through a utility.

4. Your state department of revenue

   For state tax credits specifically. These are administered separately from rebates and are easy to miss because energy offices don’t always mention them.

5. The DSIRE database, as a cross-check

   DSIRE (dsireusa.org, run by the NC Clean Energy Technology Center) catalogues state, local, utility and federal incentives. Enter your zip code and filter for heat pumps. Use it to catch programs the first four steps missed — but always click through to the program’s own page, because DSIRE entries can lag behind mid-cycle changes.

6. Ask two or three installers what they’re seeing

   Contractors who file rebate paperwork weekly know which programs are actually paying and which have quietly run dry. Ask each one to itemize the incentives they’ll apply and who files what. Then verify independently — an installer’s list is a lead, not a guarantee.

Do this before you accept a quote, not after. Most programs require pre-approval or a participating contractor, and the single most common way people lose rebate money is by signing a contract first and discovering the requirements afterward. Once you know your real net cost, run it through our heat pump cost calculator to see what the payback actually looks like.

8. What usually doesn’t qualify

A fair amount of rebate disappointment comes from projects that were never eligible in the first place. The common exclusions are consistent enough to list.

Garages, workshops and detached structures. Most rebate programs are written around primary conditioned living space. A mini split going into an attached garage, a detached shop, a shed or a barn usually falls outside the definition, because the program’s savings model assumes you’re heating a space that was already being heated. Some programs say this explicitly; others enforce it at inspection when the installer photographs the location. If your project is a garage conversion, check the program’s definition of conditioned space before you count on anything — and read our guide to picking a mini split for a garage, which assumes you’re paying full freight.

Additions and new conditioned space. Similar logic. Programs designed around retrofit savings often exclude equipment serving space that didn’t previously exist. New construction has separate rules and separate programs.

Second homes and rentals. Many programs require the property to be your primary residence. Rental properties sometimes qualify under separate landlord or multifamily tracks with different paperwork.

DIY installs. Almost every rebate program requires a licensed contractor for HVAC work, and the 2026 federal guidance explicitly carved HVAC installations out of the do-it-yourself pathway it opened for other appliances. A self-installed mini split, however competent, generally won’t qualify — and refrigerant handling, electrical work and load calculations belong with licensed professionals anyway.

Unlisted equipment. If the exact outdoor unit, indoor unit and control combination isn’t on the program’s qualified product list with a matching AHRI reference number, the claim fails. This trips people up on mix-and-match jobs where a contractor reuses an existing coil.

Work already started. Programs that require pre-approval mean it. Equipment delivered or installed before the application is approved is typically ineligible, with no appeal.

9. 6 mistakes that cost people money

10. Frequently asked questions