Your state is now your best source for HVAC savings. With federal tax credits (25C and 25D) terminated as of December 31, 2026, state-administered rebate programs and utility incentives are the primary financial tools for reducing HVAC upgrade costs in 2026. Depending on your state, income level, and utility provider, you could save $2,000 to $14,000+ on a new heat pump system — in some cases more than the old federal credits offered.
This guide covers the two major IRA-funded state programs (HOMES and HEAR), state-by-state rollout status, and how to find every utility rebate in your area.
Understanding the Two Major State Rebate Programs
The Inflation Reduction Act (IRA) allocated $8.8 billion for two residential rebate programs. Unlike the expired federal tax credits, these are administered by individual states, which means eligibility rules, rebate amounts, and application processes vary.
HOMES: Home Energy Performance-Based, Whole-House Rebates
Federal allocation: $4.3 billion across all states and territories.
HOMES incentivizes comprehensive energy retrofits — not single equipment swaps. Your rebate amount is based on the percentage of energy savings your project achieves.
| Energy Savings | Any Income | ≤80% AMI | Multifamily (per unit) |
|---|---|---|---|
| 20–34% reduction | Up to $2,000 | Up to $4,000 | Up to $2,000 (or $4,000 LMI) |
| 35%+ reduction | Up to $4,000 | Up to $8,000 | Up to $4,000 (or $8,000 LMI) |
HOMES requires either modeled energy savings (using DOE-approved software before installation) or measured energy savings (based on actual utility data after installation). This means you'll typically need a home energy assessment as part of the process.
HEAR: Home Electrification and Appliance Rebates
Federal allocation: $4.5 billion across all states and territories.
HEAR provides point-of-sale rebates for individual electric appliances and upgrades. It's income-restricted and focused on electrification.
| Equipment | ≤80% AMI | 80–150% AMI |
|---|---|---|
| Heat pump (HVAC) | $8,000 | $4,000 |
| Heat pump water heater | $1,750 | $1,750 |
| Electric stove/cooktop | $840 | $840 |
| HP clothes dryer | $840 | $840 |
| Insulation & air sealing | $1,600 | $1,600 |
| Electrical panel upgrade | $4,000 | $2,000 |
| Electrical wiring | $2,500 | $1,250 |
| Max per household | $14,000 | Varies (~$7,000+) |
Income qualification is based on Area Median Income (AMI) for your county, not statewide averages. A family of 4 earning $60,000 might qualify as ≤80% AMI in one county but 80–150% AMI in another. Look up your county's AMI using the HUD Income Limits dataset at huduser.gov.
State-by-State Rebate Program Status (2026)
The following table shows the rollout status of HOMES and HEAR programs as of early 2026. Programs are launching on a rolling basis, so check your state energy office for the latest information.
This information changes frequently. States are launching programs throughout 2026. Use this as a starting point, then verify current status with your state energy office or the DOE's Home Energy Rebate Programs page.
States with Active HEAR Programs
These states have launched HEAR programs and are accepting applications or processing rebates:
| State | HEAR Status | Key Details | Max HP Rebate (≤80% AMI) |
|---|---|---|---|
| California | Active (regions filling fast) | Northern CA still open; Central/Southern fully reserved as of Jan 2026 | $8,000 |
| Colorado | Active (Nov 2026 launch) | Through CO Energy Office; point-of-sale via registered contractors | $8,000 |
| Connecticut | Active | Via Energize CT | $8,000 |
| Hawaii | Active | Via Hawaii Energy | $8,000 |
| Maine | Active | Via Efficiency Maine Trust | $8,000 |
| Massachusetts | Active | Via Mass Save / MassCEC | $8,000 |
| Michigan | Active | Via Michigan Saves | $8,000 |
| Minnesota | Active | Via Dept. of Commerce | $8,000 |
| New Mexico | Active | Via Energy, Minerals & Natural Resources Dept. | $8,000 |
| New York | Active | Via NYSERDA | $8,000 |
| North Carolina | Active | Energy Saver NC — available in all counties by Jan 2026 | $8,000 |
| Oregon | Active | Via Oregon Dept. of Energy | $8,000 |
| Rhode Island | Active | Via Rhode Island Energy | $8,000 |
| Vermont | Active | Via Efficiency Vermont | $8,000 |
| Washington | Active | Via Dept. of Commerce; multiple third-party administrators | $8,000 |
| Wisconsin | Active | Via Focus on Energy | $8,000 |
States Launching HEAR in 2026
| State | Expected Launch | Notes |
|---|---|---|
| Arizona | Q1–Q2 2026 | Program design in progress |
| Florida | 2026 (TBD) | Via Dept. of Agriculture & Consumer Services |
| Georgia | 2026 (TBD) | Via GA Environmental Finance Authority |
| Illinois | Q1 2026 | Via IL EPA |
| Indiana | 2026 (TBD) | Program development underway |
| Maryland | Q1 2026 | Via MD Energy Administration |
| Missouri | 2026 (TBD) | Program development underway |
| New Jersey | Q1–Q2 2026 | Via NJ Board of Public Utilities |
| Ohio | 2026 (TBD) | Via OH Development Services Agency |
| Pennsylvania | Q1–Q2 2026 | Via PA DEP |
| South Carolina | 2026 (TBD) | Active program design; rebates not yet available |
| Tennessee | 2026 (TBD) | Via TN ECD |
| Texas | 2026+ | RFP for program management issued; no launch date set |
| Virginia | Q1–Q2 2026 | Via VA Dept. of Energy |
HOMES Program Status
HOMES programs are generally launching later than HEAR because they require more complex energy modeling infrastructure.
| Status | States (Examples) |
|---|---|
| Active | New York, Maine, Rhode Island, Vermont, Wisconsin |
| Launching Q1 2026 | Colorado (multifamily & manufactured homes), Massachusetts, Minnesota |
| Launching mid-2026 | California, North Carolina, Oregon, Washington |
| Still in development | Texas, Florida, Georgia, most Southern and Midwestern states |
Major Utility Rebate Programs by Region
Regardless of state HOMES/HEAR status, utility companies offer their own rebates. Here are some of the largest programs:
Northeast
| Utility | Heat Pump Rebate | Central AC Rebate | Furnace Rebate |
|---|---|---|---|
| Eversource (CT, MA, NH) | $1,000–$10,000 (via Mass Save) | $250–$500 | $200–$500 |
| National Grid (MA, NY, RI) | $1,000–$10,000 (via Mass Save) | $250–$500 | $200–$500 |
| NYSERDA (NY) | $1,000–$4,000 | $250–$500 | $300–$500 |
| PSEG Long Island | $500–$1,500 | $200–$400 | $200 |
| Efficiency Vermont | $3,500–$6,000+ | N/A | N/A |
Southeast
| Utility | Heat Pump Rebate | Central AC Rebate | Furnace Rebate |
|---|---|---|---|
| Duke Energy (NC, SC, FL) | $500–$1,200 | $200–$500 | $150–$300 |
| Georgia Power | $250–$750 | $200–$500 | N/A |
| TVA (multi-state) | $500–$1,500 | $200–$500 | $150–$300 |
| FPL (FL) | $200–$600 | $200–$400 | N/A |
| Dominion Energy (VA, NC, SC) | $500–$1,000 | $200–$500 | $150–$250 |
Midwest
| Utility | Heat Pump Rebate | Central AC Rebate | Furnace Rebate |
|---|---|---|---|
| Xcel Energy (MN, CO, WI) | $800–$2,500 | $200–$500 | $200–$400 |
| ComEd (IL) | $500–$2,000 | $200–$500 | $200–$400 |
| DTE Energy (MI) | $500–$1,500 | $200–$400 | $200–$300 |
| Consumers Energy (MI) | $500–$1,500 | $200–$400 | $200–$300 |
| Ameren (MO, IL) | $300–$1,000 | $200–$400 | $200–$300 |
| Focus on Energy (WI) | $800–$1,600 | $200–$400 | $200–$400 |
West
| Utility | Heat Pump Rebate | Central AC Rebate | Furnace Rebate |
|---|---|---|---|
| PG&E (CA) | $1,000–$3,000 | $200–$500 | N/A (gas discouraged) |
| SCE (CA) | $1,000–$2,500 | $200–$500 | N/A |
| Portland General Electric (OR) | $600–$1,500 | $200–$500 | N/A |
| Puget Sound Energy (WA) | $500–$2,000 | $200–$500 | $200 |
| Arizona Public Service | $300–$800 | $200–$500 | N/A |
| NV Energy (NV) | $300–$800 | $200–$400 | $200 |
Southwest / Mountain
| Utility | Heat Pump Rebate | Central AC Rebate | Furnace Rebate |
|---|---|---|---|
| Salt River Project (AZ) | $300–$750 | $200–$500 | N/A |
| Rocky Mountain Power (UT, WY, ID) | $400–$1,200 | $200–$400 | $200–$300 |
| Oncor (TX) | $200–$400 | $200–$400 | $150–$200 |
| CPS Energy (TX) | $300–$800 | $200–$500 | $150 |
| Xcel Energy (CO) | $800–$2,500 | $200–$500 | $200–$400 |
These amounts change frequently. Utilities update rebate programs annually or even quarterly. Always check your specific utility's website or call their rebate hotline for current amounts and requirements. The numbers above represent typical ranges as of early 2026.
How to Stack Incentives for Maximum Savings
The best savings come from combining multiple incentive sources. Here's the general stacking hierarchy:
| Layer | Source | Typical Amount | Income Restricted? |
|---|---|---|---|
| 1 | HEAR or HOMES (state-administered) | $2,000–$14,000 | HEAR: Yes (≤150% AMI). HOMES: Partially |
| 2 | Utility rebate | $200–$2,500 | Usually no |
| 3 | Manufacturer promotion | $200–$1,500 | No |
| 4 | Local/municipal incentive | $200–$1,000 | Varies |
| Potential total | $2,600–$19,000 |
Stacking Rules
Can stack: HEAR + utility rebate + manufacturer promotion is generally allowed. HOMES + utility rebate + manufacturer promotion is generally allowed.
Cannot stack: HOMES + HEAR on the same project. Total incentives cannot exceed total project cost.
Must check: Individual program terms. Some utilities reduce their rebate amount when state rebates are also applied. Some states have specific anti-double-dipping rules.
Real-World Example: Maximum Stack in Massachusetts
Mike and Amy in Worcester, MA (household income $52,000, family of 4 — qualifies as ≤80% AMI for Worcester County). Installing a cold-climate heat pump system at $13,500 total cost:
| Incentive | Source | Amount |
|---|---|---|
| HEAR rebate (≤80% AMI) | MassCEC | $8,000 |
| Mass Save heat pump rebate | Utility program | $2,500 |
| Manufacturer rebate | Mitsubishi seasonal | $500 |
| Total incentives | $11,000 | |
| Out-of-pocket cost | $2,500 |
They're paying just 18.5% of the total project cost out of pocket. In some scenarios, the total incentives cover 100% of project costs for low-income households.
Real-World Example: No State Program Available
Angela in Houston, TX (household income $95,000). Texas hasn't launched HOMES or HEAR yet. She's limited to utility incentives:
| Incentive | Source | Amount |
|---|---|---|
| CenterPoint Energy rebate | Utility | $300 |
| Trane Cool Cash promotion | Manufacturer | $1,200 |
| Total incentives | $1,500 | |
| Heat pump installed cost | $10,800 | |
| Out-of-pocket cost | $9,300 |
Angela pays 86% out of pocket. Once Texas launches its programs, future homeowners in her position will have access to significantly more savings.
Real-World Example: Rural Electric Cooperative
James in rural Iowa (household income $48,000, family of 3). His electric cooperative offers its own generous heat pump rebate, plus Iowa is rolling out HEAR:
| Incentive | Source | Amount |
|---|---|---|
| HEAR rebate (≤80% AMI) | Iowa state program | $8,000 |
| Corn Belt Power Cooperative rebate | Utility | $1,800 |
| Total incentives | $9,800 | |
| Geothermal heat pump installed cost | $22,000 | |
| Out-of-pocket cost | $12,200 |
Rural electric cooperatives often offer some of the most generous utility-level rebates because they benefit from reduced peak demand and wholesale power cost savings when members install efficient equipment.
Step-by-Step: How to Find and Claim Your Rebates
Step 1: Determine Your Income Eligibility
Look up your county's AMI (Area Median Income) at HUD's income limits website. Then calculate where your household falls:
| Household Size | Approximate 80% AMI (National Average) | Approximate 150% AMI (National Average) |
|---|---|---|
| 1 person | $43,000 | $81,000 |
| 2 people | $49,200 | $92,200 |
| 3 people | $55,350 | $103,800 |
| 4 people | $61,500 | $115,300 |
These are national averages. Your county's AMI varies significantly — San Francisco's is much higher than rural Mississippi's. Always check the HUD dataset for your specific county.
Step 2: Check Your State Energy Office
Visit your state's energy office website. Search for "home energy rebates," "HEAR program," or "HOMES program." Most state energy offices maintain dedicated pages for IRA-funded rebate programs.
Step 3: Check the DSIRE Database
Visit dsireusa.org and enter your zip code. DSIRE catalogs every state, utility, and local incentive program in the country, updated regularly.
Step 4: Contact Your Utility Company
Call your electric and gas utility's customer service line or visit their website. Ask specifically about:
- Heat pump rebates (both air-source and ground-source)
- High-efficiency AC rebates
- Furnace/boiler rebates
- Weatherization rebates (insulation, air sealing)
- Smart thermostat rebates
- Low-income assistance programs
Step 5: Get Contractor Quotes with Rebate Breakdowns
Ask at least 3 HVAC contractors for quotes that include a written breakdown of all applicable rebates. Good contractors are up to date on every available program and can help you navigate applications.
Step 6: Apply Before You Install
For HEAR programs, most states require income verification and rebate reservation before work begins. For utility rebates, some require pre-approval while others accept post-installation applications. Confirm the sequence with each program.
First-come, first-served funding. California's HEAR program for Central and Southern California was fully reserved within months of launching. When your state's program opens, apply immediately. Once the federal allocation is exhausted, there's no guaranteed additional funding.
Programs to Watch in 2026 and Beyond
Denver Regional Council of Governments (DRCOG) Grant
DRCOG received a $200 million federal grant to support cleaner buildings across the Denver metro area. This is separate from Colorado's HEAR program and provides additional rebates for energy upgrades in the region.
Massachusetts Mass Save Program
Mass Save continues to be one of the most generous utility-backed incentive programs in the country. Combined with state HEAR rebates, Massachusetts homeowners can access $10,000+ in total incentives for heat pump installations.
New York EmPower+ Program
NYSERDA's EmPower+ program provides free energy efficiency upgrades to income-eligible New Yorkers, including insulation, air sealing, and HVAC equipment. Combined with HEAR, qualifying households may pay nothing out of pocket.
Weatherization Assistance Program (WAP)
The federal WAP program (administered by states) provides free weatherization services to low-income households, regardless of HOMES/HEAR status. WAP covers insulation, air sealing, and sometimes HVAC equipment. Contact your state's WAP provider to check eligibility.
Key Takeaways:
- With federal credits expired, state programs and utility rebates are your primary savings tools in 2026.
- HEAR offers up to $8,000 for heat pumps (≤80% AMI) or $4,000 (80–150% AMI). HOMES offers up to $8,000 for comprehensive retrofits.
- Program availability varies dramatically by state. Some have been active since 2024–2026; others haven't launched yet.
- Utility rebates ($200–$2,500) are available in nearly every service territory regardless of income.
- Stacking incentives (state + utility + manufacturer) can cover 50–100% of project costs for qualifying households.
- Apply early — funding is first-come, first-served with finite budgets.
- Check DSIRE (dsireusa.org) and your state energy office for the most current information.