Heat Pump Water Heater Rebate
Through state Home Energy Rebates programs, a heat pump water heater rebate can lower your purchase price by up to $1,750. In addition, local electric utilities give instant discounts or mail-in checks, with amounts from $100 to $5,000 set by how much your household earns.
- Federal State Rebate Cap
- Up to $1,750 Under the High-Efficiency Electric Home Rebate when you switch to electric
- Bill Savings Each Year
- About $550 By ENERGY STAR's estimate for a four-person household
- Biggest Utility Incentive
- Up to $5,000 Through income-qualified programs, including TECH Clean California.
- Federal Tax Credit Under 25C
- Ended Water heaters installed after December 31, 2025 no longer qualify
Rebates for heat pump water heaters, state by state
Across the country, electric utilities and state energy offices pay rebates on heat pump water heaters that qualify.
| State | Biggest standard rebate | Program | Home Energy Rebates cap |
|---|---|---|---|
| Alabama | $900 | TVA EnergyRight Residential Rebates (heat pumps) | Not open |
| Alaska | None open | Not open | |
| Arizona | $500 | SRP heat pump water heater rebate | $1,750 |
| Arkansas | Up to $500 per unit | Heat Pump Water Heaters covered under Entergy Arkansas Residential Point of Purchase Solutions | Not open |
| California | Up to $2,500 per unit | LADWP Consumer Rebate Program | Not open |
| Colorado | $1,500 | Xcel Energy Colorado Heat Pump Rebates | Not open |
| Connecticut | $900 for qualifying units | Energize CT Residential Heat Pump Water Heater Incentive | Not open |
| Delaware | $1,100 | Energize Delaware Home Performance with ENERGY STAR, plus Assisted Home Performance with ENERGY STAR | Not open |
| District of Columbia | $1,600 | DCSEU Residential Heating & Cooling and Electrification Rebates | Not open |
| Florida | $800 | Heat Pump Hybrid Water Heater Rebates from Duke Energy Florida | Not open |
| Georgia | 50% of cost up to $800 | Georgia Power Home Energy Improvement Program (HEIP) | Not open |
| Hawaii | $700 instant in-store rebate | Hawaii Energy Water Heating Rebates – Heat Pump Water Heater | Not open |
| Idaho | $500 | Avista Idaho HVAC and water heating pass-through discounts | Not open |
| Illinois | The online rebate or instant coupon through Lowe's or The Home Depot pays $800; a contractor can instead pass along a $1,150 distributor discount | HVAC and Water Heating Discounts available under Ameren Illinois Instant Incentives | Not open |
| Indiana | $750 | NIPSCO Energy Efficiency Home Rebates | $1,750 |
| Iowa | $650/unit | Eastern Iowa Light & Power Cooperative Heat Pump Rebates | Not open |
| Kansas | None open | Not open | |
| Kentucky | $900 | TVA EnergyRight Residential Rebates (heat pumps) | Not open |
| Louisiana | Up to $400 per unit | Entergy Louisiana Residential Retail and Products, covering Heat Pump Water Heaters | Not open |
| Maine | $1,200 instant discount | Efficiency Maine Heat Pump Water Heater Incentives | Not open |
| Maryland | $1,500 (Switch-to-Electric up to $2,500) | Potomac Edison Maryland HVAC Program and Switch-to-Electric Program (EmPOWER Maryland) | Not open |
| Massachusetts | $1,500 per system | Mass Save Heat Pump Water Heater Rebates | Not open |
| Michigan | $100 | Great Lakes Energy Energy Wise Rebates | $1,750 |
| Minnesota | $400; those eligible to enroll in Demand Management get $500 | Xcel Energy Minnesota Heat Pump Rebates | Not open |
| Mississippi | $900 | TVA EnergyRight Residential Rebates (heat pumps) | Not open |
| Missouri | 50% up to $750 (limit two per meter) | Take Control & Save, run by Associated Electric Cooperative and its member co-ops | Not open |
| Montana | Up to $3,000 | NorthWestern Energy Heat Pump Water Heater (HPWH) Program | Not open |
| Nebraska | $500 | LES Sustainable Energy Program + City of Lincoln Heat Pump Incentives | Not open |
| Nevada | $800 | NV Energy PowerShift Residential Heat Pump Water Heater incentive | Not open |
| New Hampshire | $900 | NHSaves Heat Pump Water Heater Rebate | Not open |
| New Jersey | $750 | PSE&G HVAC Instant Rebates Program and Residential Building Decarbonization Rebates | Not open |
| New Mexico | $300 Rebate | PNM Rebates (after a Home Energy Checkup) | $1,750 |
| New York | An instant rebate of $1,500 for purchases Sept 1-Nov 30, 2026; otherwise $1,300 | Con Edison NYS Clean Heat heat pump incentives | Not open |
| North Carolina | $500 | Duke Energy Smart $aver Home Improvement Rebates for HVAC and heat pump water heaters | $1,750 |
| North Dakota | None open | Not open | |
| Ohio | None open | Not open | |
| Oklahoma | Up to $750 | Power Forward with PSO Heat Pump Rebates | Not open |
| Oregon | $1800 for Tier 4 qualified units | Emerald PUD residential heat pump incentives | Not open |
| Pennsylvania | $400 | PPL Electric Utilities Home Energy Rebates (Act 129) | Not open |
| Rhode Island | Rebates of up to $625 | Rhode Island Energy High-Efficiency Electric Heat Pump Rebates | Not open |
| South Carolina | $750 | Dominion Energy South Carolina Heating & Cooling Rebates | Not open |
| South Dakota | $250 per unit | Black Hills Energy South Dakota Residential Electric Rebates | Not open |
| Tennessee | $900 | TVA EnergyRight Heat Pump Water Heater Retail Coupon | Not open |
| Texas | $1,650/unit | SWEPCO HVAC Incentive Program and Texas rebates | Not open |
| Utah | $350 | Utah heat pump rebates through Rocky Mountain Power Wattsmart Homes | Not open |
| Vermont | $600 instant discount or post-purchase rebate | Efficiency Vermont Heat Pump Water Heater Rebate | Not open |
| Virginia | Up to $400 | Dominion Energy Virginia Home Energy Evaluation plus Water Energy Rebates | Not open |
| Washington | $1,000 | PSE heat pump water heater rebate | Not open |
| West Virginia | $400 | Appalachian Power Take Charge WV Appliance Rebates | Not open |
| Wisconsin | None open | $1,750 | |
| Wyoming | $600 | Wyoming heat pump water heaters through Rocky Mountain Power Wattsmart Homes | Not open |
Heat Pump Water Heater: How Much Does It Save?
An ENERGY STAR certified unit cuts about $550 per year from the electric bills of a family of four. Total savings over a 13-year life pass $5,610, and the $1,503 extra upfront cost pays for itself in about three years. For a two-person household, the yearly savings run about $270, with a payback of 5.5 years.
Because the unit takes warmth from the surrounding air and sends it into the tank, you get these savings. Much as a toaster does, standard electric resistance heaters make heat straight from hot coils. Making heat costs far more electricity than moving it. ENERGY STAR points to that difference to explain the savings: the tank acts as a refrigerator running in reverse.
These units go by the name hybrid electric water heaters in stores, too. If your household needs a lot of hot water in a short burst, the tank switches to electric resistance heat on its own.
Federal Rules for a Heat Pump Water Heater Rebate
State energy offices take part in the High-Efficiency Electric Home Rebate, offering as much as $1,750 for ENERGY STAR models. Before you count on that money, find out which type of water heater your home has.
Federal grants no longer fund fuel-switching, following a 2026 update in Department of Energy Program Notice 26-2. The $1,750 discount is only available when an older electric tank is being replaced, not a natural gas unit.
The former federal tax credit of 30%, worth as much as $2,000, has ended too. Per IRS guidance, that credit cannot be claimed for equipment placed in service once December 31, 2025 has passed.
Claiming a Utility or State Heat Pump Hot Water Rebate
Today, cash back mostly comes from your electric company or state efficiency agency. Local utilities will often pay you to switch, even if the tank you replace runs on natural gas. One example: Alabama Power pays $600 when you replace a gas unit, and TECH Clean California offers $3,500 to $5,000 to homes that meet income limits.
There are three ways programs deliver these savings, so check the rules before you buy your tank:
- Instant retail coupons cut the price right at the register; Energy Trust of Oregon gives a $1,000 retail discount as one example.
- When the installer you hire is a participating one, contractor pass-through discounts bring your plumber's invoice down directly.
- With a post-purchase rebate, a check comes once you mail in the receipt and model number.
Which Units Meet the Rules for ENERGY STAR Rebates?
A tank has to meet ENERGY STAR product criteria under most programs run by states and utilities. Three numbers prove a unit qualifies, so look for them when comparing yellow EnergyGuide labels in the store.
Begin with the Uniform Energy Factor. This rating tells you how much hot water comes out for the electricity used. A rating of 3.30 or higher is needed for standard all-in-one tanks. Split systems, which keep the heat pump unit apart from the tank, need at least 2.20, as do plug-in 120-volt units.
Next comes the First Hour Rating: how many gallons of hot water the tank can deliver during one busy hour. A qualifying model delivers at least 45 gallons per hour and has its sealed system covered by a six-year warranty.
Lastly, put the tank in a spot that stays between 40° and 90°F all year, with 1,000 cubic feet of surrounding air, per ENERGY STAR.
Heat Pump Water Heater Rebates: Questions People Ask
What are the drawbacks of putting in a heat pump water heater?
Two things count against it most: it costs more upfront, and the tank needs open air space around it. Even so, the Federal Energy Management Program finds that a unit priced as much as $2,500 over a standard model still saves money. An unheated garage that falls below 40°F is another spot where the tank cannot go.
How much less electricity will my home use with a heat pump water heater?
Water heating accounts for about 12% of the total energy budget in a typical home, ENERGY STAR reports. Switch to a heat pump tank and that electricity use drops to roughly one-quarter of a standard model's. Using a rate of $0.146 per kilowatt-hour for electricity, the yearly savings for a family of four reach up to $600.
Which efficiency rating earns the largest utility rebate?
Past the standard 3.30 rating, a number of utilities in northern states pay more for units rated Tier 3 or Tier 4. In Washington, for example, Puget Sound Energy pays $1,000 for models rated Tier 3 or Tier 4. In Oregon, Emerald PUD will pay $1,800 if the Tier 4 unit you install qualifies. Many utilities also set a limit, requiring a tank capacity below 85 or 120 gallons.
Can I still get the federal tax credit if my water heater was bought in 2025?
Yes, you can claim it, as long as the installation happened between January 1, 2023, and December 31, 2025. Those earlier installations qualified for 30% back under the ENERGY STAR tax credit rules, with a cap of $2,000. The credit applied to heat pump water heaters, electric or natural gas, that were placed in service before the deadline.
Get installer quotes that include your rebates
Most rebates on this page are paid through the installer or need the installer's paperwork, so the quote is where the money is settled. Tell us the ZIP code and what you want installed, and installers who work with these programs send a written price with the rebates taken off.