Technology

Heat Pump Water Heater Rebate 2026: Federal + State Stack

Heat pump water heaters (HPWHs) qualify under federal 25C (30% up to $2,000 per year) plus IRA HEEHRA up to $1,750 for income-qualified households. State and utility programs add $300–$1,000 in most states. Total stack frequently covers 60–100% of the $4,000–$6,000 typical install cost. ENERGY STAR HPWH models (Rheem ProTerra, AO Smith Voltex, Bradford White) are the most common qualifying equipment.

Federal 25C HPWH Treatment

HPWH and whole-home heat pumps share the $2,000 annual sub-cap under 25C. If you install both in the same year, the combined credit is capped at $2,000. Spread across two tax years to capture both at $2,000 each.

IRA HEEHRA HPWH

Up to $1,750 for income-qualified households (≤150% AMI). 100% cost coverage at ≤80% AMI. Does NOT stack with 25C on the same equipment.

Top State HPWH Programs

NYSERDA Clean Heat (NY): $700–$1,000. Mass Save (MA): $750. SoCalGas (CA): $1,000. PG&E (CA): $300–$500. SCE (CA): $1,000. Energy Trust of Oregon: $500. ComEd (IL): $300. Most utilities pay $300–$700 for HPWH.

Equipment Selection

ENERGY STAR Most Efficient HPWH for highest qualifying tier in most state programs. Look for Uniform Energy Factor (UEF) 3.5+ for top performance. Rheem ProTerra Plus, AO Smith Voltex AL, Bradford White Aerotherm are common high-tier models.

Frequently asked questions

Can I claim 25C for HPWH and heat pump in same year? +

Yes, but the combined credit is capped at $2,000 (the heat pump sub-cap). Two units in two tax years lets you claim $2,000 each.

Are HPWH installs eligible for HEEHRA? +

Yes — separate $1,750 cap. Income-qualified households should choose HEEHRA over 25C if 100% AMI tier qualifies.

Plumbing modifications eligible? +

Plumbing directly required for the HPWH installation is eligible under 25C basis.