Heat pump rebates and incentives

Heat pump incentives in the U.S. come from three places: your electric or gas utility, your state, and federal money that states run as rebate programs. The federal tax credit for heat pumps (25C) ended for equipment placed in service after December 31, 2025; see Federal tax credit for heat pumps (25C). Which incentives you can get depends on your address, your utility, your household income for some programs, the exact equipment, and whether your contractor is enrolled in each program.

To look up a specific system's efficiency data and its manufacturer's QMID, rebate.blue is one tool for that.

Utility rebates

Utilities run most of the heat pump rebates available to the most households. Common features:

• Equipment thresholds. Programs set minimum SEER2, EER2 and HSPF2 ratings, and many have a higher tier for cold-climate units tested at 5°F.
• Per-ton amounts. Rebates are often paid per ton of capacity rather than per system.
• Contractor networks. Many require a contractor enrolled in the utility's program.
• Deadlines. Programs are set for a calendar or program year and change each year.

An example of how specific these get, from Xcel Energy's Colorado rebate summary effective October 1, 2026:^{[Source 7]}

Equipment	Minimum ratings	Rebate with bonus	Standard rebate
Ducted air-source heat pump	15.2 SEER2, 11.7 EER2, 7.8 HSPF2	$600 per cooling ton	$300 per cooling ton
Ducted cold-climate heat pump	15.2 SEER2, 10 EER2, 8.1 HSPF2; COP at 5°F of 1.75 or more; capacity at 5°F at least 70% of capacity at 47°F	$1,500 per heating ton at 5°F	$750 per heating ton at 5°F

The same sheet says bonuses stopped being available, effective November 16, 2025, for customers whose existing heating is already electric, and that rebate plus bonus cannot exceed the invoiced cost.^{[Source 7]} Other utilities use different rules. Read the current program sheet for your utility, and check its date.

State incentives

States use tax credits, rebates and sales tax exemptions, and these change on fixed schedules or with new legislation. Colorado, as of October 2026:

• State heat pump tax credit, claimed by the contractor. A contractor registered with the Colorado Energy Office claims the credit and must pass at least one third of it to the customer as an upfront discount. For installations on or after January 1, 2026, the credit is $1,000 for an air-source heat pump (minimum $333 customer discount), $2,000 for ground-, water- or combined-source ($667), and $250 for a heat pump water heater ($83). The 2024 and 2025 amounts were higher ($1,500, $3,000 and $500), and the office says the amounts will drop again in tax year 2029.^{[Source 6]}
• Equipment rules for that credit. Equipment must be ENERGY STAR certified, air-source systems must be AHRI-matched, and space heating heat pumps must be designed to meet at least 80% of annual heating needs.^{[Source 6]}

Federal home energy rebates (run by states)

The Inflation Reduction Act created two rebate programs that the Department of Energy funds and states run. Neither is a tax credit, and they are only available where a state has launched them.

HEEHR (sec. 50122). Originally called Home Electrification and Appliance Rebates (HEAR); DOE renamed it High-Efficiency Electric Home Rebates in May 2026.^{[Source 3]} The statute sets these caps:^{[Source 1]}

Item	Statutory cap
Heat pump for space heating and cooling	$8,000
Heat pump water heater	$1,750
Electric panel (load service center)	$4,000
Electric wiring	$2,500
Insulation, air sealing and ventilation	$1,600
Total per household	$14,000

Households under 80% of area median income can receive up to the full cost; households from 80% to 150% can receive up to 50%.^{[Source 1]} States may set lower amounts; Colorado set $8,000 for a cold-climate heat pump and $3,000 for a non-cold-climate heat pump.^{[Source 5]}

HOMES (sec. 50121). A whole-house program based on modeled or measured energy savings: $2,000 for 20% to 35% savings or $4,000 for 35% or more, capped at 50% of project cost, with higher amounts for low- and moderate-income households.^{[Source 2]}

Changes in 2026. DOE Program Notice 26-2, effective May 29, 2026, changed HEEHR rules. The notice removes rebates for fuel switching, allowing HVAC and appliance rebates "only from existing electric equipment to more efficient electric equipment." It requires insulation and air sealing before HVAC upgrades unless the home already meets a state's DOE-approved level, and allows a home to keep an existing fossil-fuel system alongside a heat pump. It gives launched states three months to conform.^{[Source 3]} As of October 2026, DOE's program page says rebates "are now available in select states" and does not list them.^{[Source 4]}

Colorado status, as of October 2026. The Colorado Energy Office says its HEAR single-family program for Regions 1 and 2 is closed, with Region 2 applications submitted after August 1, 2026 denied. Small multifamily rebates and HOMES-funded rebates for manufactured homes and large multifamily buildings are listed as expected to launch in winter 2026.^{[Source 5]}

How stacking works

Combining incentives is limited in specific ways:

• Federal rebates with each other. HEEHR rebates "may not be combined with any other Federal grant or rebate" for the same project, and HOMES may not be combined with HEEHR for the same single upgrade.^{[Source 1][Source 2]}
• Federal rebates with state and utility money. DOE encourages states to combine its rebates with other funding where the statute allows.^{[Source 3]} Colorado says its federally funded rebates can be combined with the Colorado heat pump tax credit if the contractor is registered with both programs.^{[Source 5]}
• Rebates and tax credits. For federal tax credits, the IRS requires the claimable cost to be reduced by rebates, and it treats federal home energy rebate payments as rebates.^{[Source 8]} This mattered for 25C claims on 2025 installs.
• Utility caps. Utilities commonly cap their own rebate at the invoiced cost and do not pay twice for the same improvement.^{[Source 7]}

What to keep

Most programs ask for proof of the exact equipment. Keep the itemized invoice with model numbers, the AHRI certificate, the permit, and any program approval letters. See Heat pump buying checklist.