States Expanding Heat Pump Rebates in 2025: Which Programs Pay the Most
At least 28 states have active heat pump rebate programs in 2025, with new HEEHRA programs going live throughout the year. Here are the top programs and how to stack them with the IRA tax credit.
The federal HEEHRA (High-Efficiency Electric Home Rebate Act) program, funded by the Inflation Reduction Act, is reaching consumers through state energy offices in 2025 — adding to the already substantial 25C tax credit. For many homeowners, stacked incentives can cover 40–60% of heat pump installation costs.
New State HEEHRA Programs Going Live in 2025
Several states launched or significantly expanded HEEHRA rebates this year:
Michigan: The Michigan HEEHRA program launched in spring 2025 with rebates up to $8,000 for heat pump HVAC systems and $1,750 for heat pump water heaters for income-qualified households.
Virginia: Virginia's Department of Energy began accepting HEEHRA applications in early 2025, offering up to $8,000 for air-source heat pumps.
Georgia: Georgia Power partnered with the state energy office to offer up to $1,500 for qualifying heat pump installations, stacking with federal credits.
Arizona: APS and SRP utility programs were enhanced with HEEHRA funding, bringing total available rebates to $1,200–$2,500 per installation.
Top Heat Pump Rebate Stacks by State (2025)
| State | 25C Tax Credit | State/Utility Rebate | HEEHRA (income-eligible) | Best Case Total | |-------|--------------|---------------------|--------------------------|----------------| | Massachusetts | Up to $2,000 | Up to $10,000 (Mass Save) | Up to $8,000 | Up to $20,000 | | New York | Up to $2,000 | Up to $4,000 (NYSERDA) | Up to $8,000 | Up to $14,000 | | California | Up to $2,000 | Up to $3,000 (TECH CA) | Up to $8,000 | Up to $13,000 | | Vermont | Up to $2,000 | Up to $1,500 (Efficiency VT) | Up to $8,000 | Up to $11,500 | | Colorado | Up to $2,000 | Up to $1,200 (Xcel) | Up to $8,000 | Up to $11,200 | | Oregon | Up to $2,000 | Up to $2,500 (Energy Trust) | Up to $8,000 | Up to $12,500 | | Michigan | Up to $2,000 | Up to $500 (DTE/Consumers) | Up to $8,000 | Up to $10,500 |
HEEHRA amounts are for income-eligible households (below 150% area median income). Higher-income households receive 50% of listed amounts.
How to Stack Incentives Correctly
Step 1: Apply for utility/state rebates first. Many require pre-approval or must be claimed at point of sale.
Step 2: When calculating the 25C tax credit, use your net out-of-pocket cost after rebates. The IRS requires you to reduce your credit basis by the rebate amount.
Step 3: File Form 5695 when submitting your tax return for the year of installation.
Example:
- System cost: $12,000
- Mass Save rebate received: $4,000
- Net cost: $8,000
- 25C credit (30% of $8,000): $2,400, capped at $2,000
- Total incentives: $6,000 (50% of system cost)
Finding Programs Near You
The most comprehensive database of heat pump incentives by state and utility is the Rewiring America Incentive Estimator and DSIRE (dsireusa.org). Input your ZIP code and income range to see every applicable program.
Utility rebate programs frequently change — always verify current amounts directly with your utility before committing to a project. Also ask your HVAC contractor whether they handle rebate paperwork as part of the installation quote.
The IRA's 25C credit remains available through 2032, so homeowners who don't qualify for 2025 HEEHRA programs may still benefit significantly from the tax credit alone.