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2025 Federal Incentive · IRC Section 25C

Heat Pump Rebates — Get Up to $2,000 Back

Switch from gas to an electric heat pump and claim up to $2,000 in federal tax credits — plus state rebates that can add thousands more. HomeShark finds every incentive available at your address.

Takes 2 minutes. Used by 12,000+ homeowners.

$2,000
max federal tax credit (25C)
3x
more efficient than gas furnaces
$1,400
avg annual energy savings

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Enter your address — we'll find every rebate and credit available for your specific home.

🔒 PRIVATE ⚡ INSTANT 💰 FREE
AS FEATURED IN
Forbes
This Old House
Architectural Digest
CNET
WSJ
$2,000
federal tax credit (25C)
$3,500+
typical combined federal + state
9 yrs
avg payback period

Stack multiple rebates on one heat pump

The 25C credit is just the starting point. Most homeowners can layer federal, state, and utility rebates for a combined benefit of $3,000–$6,000.

🌡️
Federal 25C Heat Pump Credit
ENERGY STAR-certified air-source or geothermal heat pump
$2,000
🏠
HEEHRA Rebate (Low/Moderate Income)
Point-of-sale rebate for income-qualifying households
Up to $8,000
Utility Company Rebates
Varies by utility — typically $200–$1,500
Varies
🏛️
State Incentive Programs
Massachusetts, NY, CO, CA offer substantial additional credits
Varies
Typical combined value (federal + state + utility)$3,000–$10,000

Why heat pumps are the most impactful home upgrade

A modern ENERGY STAR heat pump operates at 200–400% efficiency — meaning for every unit of electricity it uses, it delivers 2–4 units of heat. A gas furnace tops out at 98% efficiency. At current utility rates, this translates to $500–$1,400 in annual savings for most homes.

Cold-climate heat pumps work in freezing temperatures

Second-generation cold-climate heat pumps (models from Mitsubishi, Bosch, Daikin, and others) maintain high efficiency down to -13°F (-25°C) — making them viable in all but the most extreme northern climates. HomeShark factors in your climate zone when calculating savings.

Heat pump water heaters also qualify

Heat pump water heaters (HPWHs) qualify for a separate $600 credit under 25C. They use 70% less energy than a standard electric water heater, saving $300–$500/year.

Your free report in 2 minutes

No technician visit. No lengthy forms. HomeShark does the work of a $500 professional audit in under two minutes.

01 — ADDRESS

Enter your address

We pull your home's public property record — square footage, year built, roof type, HVAC age, and solar potential — automatically.

02 — BILL (OPTIONAL)

Upload a utility bill

Drop in a photo or PDF of any bill. Our AI reads your exact kWh usage, costs, and provider — making your report 3× more accurate.

03 — REPORT

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Receive a personalized efficiency score, neighbor comparison, itemized savings opportunities, and every federal and state rebate you qualify for.

04 — QUOTES

Get 3 competitive quotes

Request free quotes from 3 vetted local installers for solar, HVAC, EV chargers, and more. They compete — you choose the best price.

Real savings, real homeowners

★★★★★
"I had no idea I qualified for a $6,600 solar credit plus another $2,500 from Austin Energy. HomeShark took 3 minutes and I'm now saving $187 every month."
Sarah K. · Austin, TX · Solar + EV Charger
★★★★★
"The neighbor comparison was eye-opening — I was using 34% more electricity than similar houses. The insulation upgrade paid for itself in under two years."
Marcus T. · Denver, CO · Insulation Upgrade
★★★★★
"I uploaded my electric bill photo and within 2 minutes had a full report showing $9,200 in available credits. The contractor match was seamless."
Jennifer R. · Portland, OR · Heat Pump + Solar

Frequently asked questions

How much is the 2025 heat pump federal tax credit?

The Inflation Reduction Act Section 25C credit provides up to $2,000 for a qualifying heat pump installation. This directly reduces your federal tax bill — dollar for dollar.

What types of heat pumps qualify?

ENERGY STAR-certified air-source heat pumps and geothermal heat pumps qualify. Central systems must meet SEER2 ≥ 16 minimum efficiency standards. Ductless mini-splits are also eligible.

Can I combine the federal credit with state rebates?

Yes — most states allow stacking. High-rebate states include Massachusetts ($1,000–$3,000), New York (up to $2,500), Colorado, and California. HomeShark finds your specific state and utility rebates.

Heat pump vs. gas furnace — which is cheaper to run?

Heat pumps move heat rather than generate it, achieving 200–400% efficiency vs. a gas furnace's 80–98%. At average utility rates, a heat pump typically saves $500–$1,400/year compared to gas.

Does the $2,000 cap apply per year or per home?

The $2,000 cap is per year. If you install a heat pump this year and want additional home energy improvements, you can claim those in subsequent years under the 25C annual cap.

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