Air-source · Ground-source · Mini-split
The single biggest rebate stack in the IRA
Heat pumps are the centerpiece of the federal energy strategy. They get the largest 25C credit category ($2,000), the largest HEAR cap ($8,000), and almost every utility runs a generous heat pump rebate. A single ducted heat pump can stack $11,000+ in rebates if you're income-eligible for HEAR.
Federal stack
| Program | Cap | Eligibility |
|---|---|---|
| IRA 25C tax credit | $2,000 (30% of cost) | ENERGY STAR Most Efficient; cold-climate spec in N. zones |
| IRA 25D tax credit (geothermal) | 30% of cost, no cap | Ground-source ENERGY STAR heat pumps |
| DOE HEAR rebate | $8,000 | ≤150% AMI |
| DOE HOMES rebate | $2,000-$8,000 | Modeled energy savings; performance-based |
Utility rebates
Nearly every U.S. utility runs a heat pump rebate. Cold-climate states (NY, MA, MN, ME, VT, MI) offer $1,000-$3,000+ rebates because heat pumps reduce winter electric peak. Hot-climate utilities offer smaller rebates ($300-$800) but many have launched mid-tier programs in the last 2 years.
State programs
Mass Save (MA), NYSERDA (NY), Energize CT (CT), Efficiency Maine (ME), and Energy Trust of Oregon all add $1,000-$10,000 on top of federal stack for cold-climate heat pumps. CA and CO have launched income-targeted whole-home electrification add-ons.
Heat pump types
- Air-source ducted — replaces existing central AC + furnace; works in most climates with cold-climate specs in the North
- Ductless mini-split — one outdoor unit serving multiple indoor heads; great for additions, retrofits, and homes without ducts
- Ground-source (geothermal) — most efficient, highest install cost, qualifies for 30% uncapped 25D credit instead of 25C
- Heat pump water heater — separate page; same federal incentives apply
Cold-climate heat pump (CCHP) requirement
Starting 2025, the IRA 25C credit in Northern climate zones (zones 5-7) requires the heat pump to meet the additional ENERGY STAR Cold Climate spec — which guarantees efficient performance below 5°F outdoor temp. Verify the AHRI certificate shows the cold-climate designation.