State-by-state replacements for the federal heat pump tax credit.
When OBBBA eliminated Section 25C in July 2025, headlines declared the heat pump movement dead. Eight months later, eighteen states picked up the slack with their own programs — some larger than the federal credit was. Here is exactly where the money still flows, and how to stack it.
Quick context: what died and what survived federally
OBBBA, signed July 2025, eliminated three home-electrification credits:
- Section 25C — Energy Efficient Home Improvement Credit: up to $2,000/yr for heat pumps, $600 for HVAC, $1,200 for insulation/windows. Gone.
- Section 25D — Residential Clean Energy Credit: 30 % on solar, battery, geothermal. Gone.
- Section 45L — New Energy Efficient Home Credit: $2,500-$5,000 for builders. Gone for residential.
The High-Efficiency Electric Home Rebate Act (HEEHRA) — part of the IRA's $4.5 B point-of-sale rebate pool — survived but distribution remains state-by-state and was not affected by OBBBA. DOE's HEEHRA tracker shows which states have actually deployed funds — at May 2026, 19 states are accepting applications.
States with active heat-pump rebates (May 2026)
Ranked by the maximum stackable incentive a typical 2,200 ft² household can claim today. Excludes income-restricted programs unless noted.
| State | Program | Max incentive (2026) |
|---|---|---|
| Massachusetts | Mass Save Whole-Home Electrification | $10,000 |
| Maine | Efficiency Maine ASHP + ccASHP bonus | $8,000 |
| New York | NY Clean Heat + LMI Bonus | $4,000-$8,000 |
| California | TECH Clean California (CSI) | $3,800 |
| Rhode Island | Rhode Island Energy + state HEEHRA | $3,500 |
| New Hampshire | NH Saves heat pump rebate | $3,000 |
| Vermont | Efficiency Vermont ccASHP | $2,800 |
| Connecticut | Energize CT (Eversource + UI) | $2,500 |
| Washington | BPA territory utilities (PSE, Avista) | $2,400 |
| New Jersey | NJ Clean Energy heat pump | $2,000 |
| Minnesota | Xcel Energy + CenterPoint | $1,800 |
| Oregon | Energy Trust of Oregon | $1,800 |
| Colorado | Xcel Energy heat pump + state rebate | $1,500 |
| Illinois | ComEd / Ameren residential incentives | $1,500 |
| Michigan | DTE Energy + Consumers Energy | $1,200 |
| North Carolina | Duke Energy rebate | $800 |
| Maryland | EmPOWER MD (BGE / Pepco) | $800 |
| Pennsylvania | PECO + utility rebate combos | $600 |
Source: DSIRE database queried May 12, 2026 + state energy-office program pages. Programs change quarterly — verify before installing.
What a heat pump nets out to after a state rebate — same project, three states
There is no longer a federal $2,000 credit to subtract for a 2026 install — that line is now $0. So your only "discount" is the state/utility rebate from the table above. Hold the project fixed and change one thing: the rebate. Assumption: a whole-home ducted air-source heat pump installed for a gross $16,000 (your real quote may differ — swap your own number in below). Formula: net = gross − state/utility rebate.
| Massachusetts — $16,000 − $10,000 (Mass Save) − $0 federal | $6,000 net |
| New York — $16,000 − $8,000 (NY Clean Heat, high end) − $0 federal | $8,000 net |
| North Carolina — $16,000 − $800 (Duke Energy) − $0 federal | $15,200 net |
Put your real quote and your state's rebate into the heat pump calculator to get your own net cost and payback.
How to actually stack the rebates
The combinations that work in 2026:
- State rebate + utility rebate is the most common stack. Confirm with the installer that they are an approved contractor with BOTH programs — many state-level rebates pay through your utility, so the installer must file once.
- HEEHRA point-of-sale (where deployed) + state rebate works in 8 states currently (MA, ME, RI, NY, MD, MI, OR, WA). Income-restricted: ≤150 % AMI gets the full $8,000 federal HEEHRA on the ccASHP line; ≤80 % AMI gets it without co-pay.
- Manufacturer rebate (e.g. Mitsubishi $300, LG $400) on top of state. Doesn't conflict; the installer just files both.
- Low-interest financing (Mass Save HEAT Loan 0 %, Efficiency Maine 4.5 % via partner credit unions) does NOT stack with rebates that "buy down" the price — pick one. Loan paths usually win for liquidity reasons.
Act now on a rebate, or wait?
With the federal credit gone, timing is now about state and utility budgets, not the IRS. Most of these programs are funded in fixed pools or annual cycles that shrink, not grow.
Lock in a rebate now if…
- You're in a top-tier state (MA, ME, NY, CA, RI) where the rebate dwarfs the $2,000 the federal credit ever gave — the net cost is genuinely transformed.
- Your program has a known sunset or step-down: Mass Save's current cycle ends Dec 31, 2026, and NY Clean Heat drops from $1,200 to $1,000/ton when Block 5 runs out.
- You can stack a state rebate with a utility and/or manufacturer rebate — file all of them with one approved installer.
- Your old system is failing anyway. You're buying heat either way; the rebate only applies to the heat pump path.
Don't rush — or skip the rebate math — if…
- You're in a low/no-program state (NC, MD, PA, or no-state-program TX/FL/TN/IN). An $800-or-less rebate barely moves a $16,000 project — decide on running cost, not the incentive.
- You were only doing it for the (now-eliminated) federal $2,000 credit — that reason is gone; re-run the numbers honestly before committing.
- Your system still works and your rebate has no near-term sunset — there's no penalty for waiting a season to get competing quotes.
- You'd need to switch to a more expensive cold-climate certified model just to qualify — confirm the model is on the NEEP list before assuming the rebate makes it cheaper overall.
Watch-outs & sunset dates
- Mass Save 2026 cycle ends December 31, 2026. The next 3-year plan filing (2027-2029) is being negotiated; expected to maintain similar levels but with a shift toward income-targeted tiers.
- NY Clean Heat block grants decline as more applications come in. Block 5 (current) pays $1,200/ton; once exhausted, Block 6 will drop to $1,000/ton. Plan installs ahead of block changes.
- Texas, Florida, Tennessee, Indiana: no state-level program, but Duke Energy + TVA + utility-specific incentives may still apply. Search the DSIRE entry for your utility name.
- "Cold-climate certified" often required. Make sure the model on your quote appears on the NEEP ccASHP list if you're claiming a cold-climate incentive.
Frequently asked questions
Did the $2,000 federal heat pump tax credit really go away?
Yes. Section 25C was eliminated by OBBBA (signed July 4, 2025) for systems placed in service after December 31, 2025. Systems placed in service on or before December 31, 2025 can still claim it; 2026 installs cannot.
Which state has the largest heat pump rebate in 2026?
Massachusetts via Mass Save: up to $10,000 for whole-home electrification (ducted ASHP + air sealing + insulation). Maine and New York follow at $4-8k.
Are utility-level rebates still active?
Yes. Many utilities run independent programs: Eversource (CT/MA/NH), National Grid (NY/MA/RI), Xcel Energy (MN/CO/WI), Duke Energy (NC/SC/FL/IN). Stack with state rebates where allowed.
Sources: DSIRE incentive database (May 12, 2026 snapshot), Mass Save 2024-2026 plan filings, NY Clean Heat block reports, NEEP ccASHP specification list, DOE HEEHRA state-implementation tracker. Last reviewed May 12, 2026.