HEAR Rebate Program: Eligibility, Amounts, and Contractor Rules

The Home Electrification and Appliance Rebates (HEAR) program gives households earning below 150% of their area median income up to $14,000 off heat pumps, electric appliances, and the wiring and panel work that goes with them. It was funded by the Inflation Reduction Act with $4.5 billion ($4.275 billion for states, $225 million for tribal governments) and is run locally by each state’s energy office, so your application portal, launch date, and covered upgrades depend on where you live.¹²

Who Qualifies

Eligibility comes down to your household income compared with the area median income (AMI) for your county or metro. There are two tiers:

Below 80% of AMI: rebates cover up to 100% of project costs, subject to per-item caps.
Between 80% and 150% of AMI: rebates cover up to 50% of project costs, subject to the same per-item caps.

Above 150% of AMI, you do not qualify for HEAR. The separate 25C tax credit may still be available.²

AMI is not a national number. HUD publishes it every year for each metropolitan area and nonmetropolitan county, adjusted for household size.³ A family of four at $70,000 might be well under 80% of AMI in an expensive metro and well over 150% in a rural county. The number that matters is your local one.

What Purchases Qualify

The statute limits rebates to three situations: purchases for new construction, purchases that replace a non-electric appliance (a gas furnace swapped for a heat pump, for example), and first-time purchases of an appliance the home has never had. Replacing an existing electric appliance with a newer electric model doesn’t qualify.⁴

Every appliance or piece of equipment must carry ENERGY STAR certification where applicable. The statute explicitly excludes anything that doesn’t.⁴ Confirm the exact model you want appears in the ENERGY STAR product database before buying.

States are also allowed to narrow the list further. One state might cover heat pumps and skip electric stoves; another might limit new-construction eligibility. Check your state energy office’s portal for the actual menu.²

How Much You Can Get

The federal per-item caps are:

Heat pump for space heating and cooling: up to $8,000
Electric load service center (breaker panel) upgrade: up to $4,000
Electric wiring: up to $2,500
Heat pump water heater: up to $1,750
Insulation, air sealing, and ventilation: up to $1,600
Electric stove, cooktop, range, or oven: up to $840
Electric heat pump clothes dryer: up to $840

The combined total for a single household cannot exceed $14,000.² If you’re in the 80–150% AMI tier, the 50% cost rule often bites before the per-item cap does. A $2,400 heat pump water heater in that tier yields a $1,200 rebate, not the $1,750 maximum.

Renters and Multifamily Buildings

Renters can qualify, and eligibility is judged on the tenant’s income rather than the landlord’s. You need written permission from the landlord or an authorized agent before any work begins.⁵

When rebates are used on a low-income rental unit, the owner takes on obligations for at least two years: no eviction to bring in higher-paying tenants, no rent increases tied to the energy improvements (with narrow exceptions for property tax increases and documented operating costs), and the unit must continue to be rented to a low-income tenant. If the property is sold during that period, the same restrictions transfer to the buyer. Tenants must be notified of these protections in writing.⁵

Multifamily building owners can apply directly. If at least 50% of residents earn below 80% of AMI, the owner qualifies at the 100% tier; if at least 50% earn between 80% and 150% of AMI, the owner qualifies at the 50% tier. Per-unit rebates still cap at $14,000.

How To Apply

Each state runs its own application. Start with the Department of Energy’s directory at energy.gov/save/home-upgrades, which links to the participating state programs.⁶ Documentation varies, but expect to provide:

Government-issued ID and proof of residence, usually a utility bill or lease at the address being upgraded.
Income verification. A recent federal tax return is standard; some states accept pay stubs or documentation of participation in other federal assistance programs.
Household size, since AMI thresholds adjust for the number of people living at the address.
The make, model, and ENERGY STAR certification of the equipment you plan to install.

Most portals ask you to create an account first. Enter figures carefully against your source documents. Mismatched income numbers and incorrect household counts are among the most common reasons applications stall.

Point-of-Sale Discounts vs. Post-Purchase Claims

Federal rules require that HEAR rebates for low-to-moderate-income households be applied as a discount at the point of sale through eligible contractors and retailers.² The rebate comes off your bill at purchase or installation, and the state reimburses the retailer or contractor.

Some states also run a post-purchase reimbursement path where you pay in full and file a claim afterward. Processing typically runs four to eight weeks. Find out which model your state uses before you shop: point-of-sale means working with a participating vendor, and post-purchase means having the full cash amount on hand up front.

Contractor Requirements

There is no single national contractor license for HEAR. The federal program defines an eligible contractor broadly as an entity hired to do assessments and installations “as allowed by the state.”⁷ Most states require contractors to register with the rebate program before their installations qualify, and standard state HVAC and electrical licensing usually applies.

Self-installation is not explicitly banned in federal guidance, but the program’s structure favors professional installation, and states can require it. If you’re planning DIY, confirm with your state program before you buy. There’s also a separate installer incentive of up to $500 paid to the contractor, which doesn’t count against your $14,000.²

Stacking a HEAR Rebate With the 25C Tax Credit

You can use a HEAR rebate and the Energy Efficient Home Improvement Credit (Section 25C) on the same project, but not on the full sticker price. The IRS treats the rebate as a reduction in your purchase price, so you calculate the 25C credit on what you actually paid after the rebate.⁸

An example. A qualifying heat pump costs $10,000 and you get a $5,000 HEAR rebate. Your adjusted cost is $5,000. The 25C credit for heat pumps is capped at $2,000 per year, so you could still claim up to $2,000 on the remaining $5,000.⁹ For smaller purchases where the percentage matters more than the annual cap, the rebate does shrink the credit you can claim.

A few limits on stacking:

HEAR and the other IRA rebate program, HOMES, cannot be combined on the same project or appliance.¹⁰
You cannot combine a HEAR rebate with another federal grant for the same upgrade.
The combined value of rebate plus tax credit cannot exceed the actual project cost.¹⁰

HEAR rebates are not taxable income. The IRS treats them as purchase-price adjustments, so you don’t report them on your federal return.⁸

Do Not Buy Before Your State’s Program Launches

This is the single most expensive mistake with HEAR. Federal rules pay rebates only for a project “initiated after the State receives authorization from DOE for rebate program launch.”⁵ Install a heat pump before your state goes live and that purchase is not retroactively eligible.

As of late 2025, roughly a dozen states had active HEAR programs, with others still in planning or awaiting approval. Some early launchers have paused or slowed their programs amid uncertainty about federal funding. Verify your state’s current status through the DOE portal or your state energy office the week you plan to buy.⁶ Once your state is open, expect four to eight weeks for post-purchase claims; point-of-sale discounts apply immediately. Either way, keep every receipt and confirmation number until the rebate is fully paid.

1
Congress.gov. The Inflation Reduction Act
2
ENERGY STAR. Home Electrification and Appliances Rebate Program
3
HUD Exchange. How Is Area Median Income Calculated
4
Office of the Law Revision Counsel. 42 USC 18795a – High-Efficiency Electric Home Rebate Program
5
U.S. Department of Energy. Home Energy Rebates Program Requirements and Application Instructions
6
U.S. Department of Energy. Home Upgrades
7
U.S. Department of Energy. Home Energy Rebates Program Requirements and Application Instructions
8
Internal Revenue Service. Announcement 2024-19
9
Internal Revenue Service. Energy Efficient Home Improvement Credit
10
U.S. Department of the Treasury. Coordinating DOE Home Energy Rebates with Energy-Efficient Home Improvement Tax Credits