Michigan Heat Pump Rebates & Incentives (2026)
Federal tax credits are gone, but Michigan's $210 million MiHER program offers up to $8,000 per heat pump for qualifying households. Utility rebates add $200–$3,000 depending on your provider. Ann Arbor stacks even higher. This guide covers all major Michigan heat pump incentives available in 2026, including MiHER HEAR and HOMES, utility rebates from DTE, Consumers Energy, TCLP, and BWL, plus Ann Arbor's A2ZERO program. Here's what's actually available.
Last verified: March 22, 2026
Rates and program availability may change after this date.
Michigan
Open
Michigan's $210 million MiHER program offers up to $8,000 for heat pumps at point of sale for income-qualifying households (≤150% AMI). DTE Energy rebates run $150–$1,200. Consumers Energy offers $300–$350. Traverse City Light & Power offers up to $3,000. Ann Arbor's A2ZERO adds $4,000–$5,500. Federal tax credits (25C/25D) ended December 31, 2025.
Sources:
The Short Version
✓ MiHER HEAR Rebates
Up to $8,000 per heat pump at point of sale for households ≤150% AMI. Enhanced rebates (100% of costs) for ≤80% AMI. Covers fuel-switching from gas/propane. $14,000 total household cap.
✓ Utility Rebates
DTE Energy up to $1,200. Consumers Energy $300–$350. TCLP up to $3,000. BWL up to $600. Ann Arbor A2ZERO adds $4,000–$5,500. All stack with MiHER.
✓ Total Potential Savings
$600 (above 150% AMI, utility only) to $14,700+ (low income, Ann Arbor). Full electrification packages with HEAR + A2ZERO + DTE can reach ~$14,700 total incentives.
✗ Federal Tax Credits Expired
Both Section 25C ($2,000/year for heat pumps) and Section 25D (30% for geothermal) expired December 31, 2025. Not available for 2026 installations.
⚠ DTE and Consumers Energy Restrict Gas-to-Electric Conversions
Michigan's two largest utilities restrict most heat pump rebates to customers replacing existing electric heating — not gas furnaces. Since most Michigan homes heat with gas, this pushes fuel-switching households toward MiHER HEAR, which specifically covers gas-to-electric conversions.
Federal Tax Credits: Both Expired
The One Big Beautiful Bill Act (signed July 4, 2025) terminated both residential energy tax credits effective December 31, 2025. Section 25C had provided up to $2,000/year for heat pumps. Section 25D had covered 30% of geothermal heat pump costs with no cap. Equipment must have been installed by December 31, 2025 to qualify — the IRS defines the expenditure date as when installation is completed, not when equipment is purchased or paid for. For 25D, unused credit from qualifying 2025 expenditures can be carried forward to future tax years. Section 25C offers no carryforward. As of March 2026, no replacement federal heat pump credit is active. Full details on the federal credit expiration →
MiHER: Michigan's $210 Million State Rebate Program
Michigan launched both components of the Michigan Home Energy Rebates (MiHER) program statewide on April 14, 2025, administered by the Department of Environment, Great Lakes, and Energy (EGLE). Total IRA funding: $210 million. CLEAResult handles implementation and application processing (call center: 855-510-7080).
HEAR (Home Electrification and Appliance Rebates)
Point-of-sale rebates applied as a discount at installation through approved MiHER contractors. Specifically supports fuel-switching (gas/propane to electric heat pump). Rebate income is not taxable per IRS Announcement 2024-19.
| Measure | Maximum Rebate |
|---|---|
| Heat pump (space heating/cooling) | Up to $8,000 |
| Heat pump water heater | Up to $1,750 |
| Electric panel upgrade | Up to $4,000 |
| Insulation, air sealing, ventilation | Up to $1,600 |
| Electric wiring | Up to $2,500 |
| Electric stove or dryer | Up to $840 |
| Total household cap | $14,000 |
Income determines the rebate percentage:
| Income Tier | Rebate Coverage | HEAR Eligible? |
|---|---|---|
| ≤80% AMI | Up to 100% of approved costs | Yes (enhanced) |
| 81–150% AMI | Up to 50% of approved costs | Yes (standard) |
| >150% AMI | Not eligible for HEAR | No — HOMES only |
All work must be pre-approved and performed by an approved MiHER contractor. Retroactive claims are not accepted.
⚠ Common Mistake: Pre-Approval Is Required
MiHER does not accept retroactive claims. Your project must be pre-approved before installation starts. If you install a heat pump before getting MiHER approval, you cannot receive the rebate after the fact — even if you would have qualified.
HOMES (Home Efficiency Rebates)
Whole-home performance approach. Rebates scale with modeled energy savings. Available at all income levels — the main option for households above 150% AMI.
| Energy Savings | Standard Rebate | ≤80% AMI Rebate |
|---|---|---|
| 20–34% savings | $2,000 | $4,000 |
| 35%+ savings | $4,000 | $8,000 |
| Low-income cap | — | Up to 80% of costs, $20,000 max |
HOMES and HEAR cannot be combined for the same individual measure but can fund different upgrades within the same project.
Utility Rebates
Michigan's utility rebates vary enormously. DTE and Consumers Energy restrict most heat pump rebates to customers replacing existing electric heating, not gas-to-electric conversions. Since most Michigan homes heat with natural gas, this pushes fuel-switching households toward MiHER HEAR.
Traverse City Offers Michigan's Best Utility Rebates
TCLP customers can receive up to $3,000 per cold-climate heat pump system — far more than DTE's $1,200 or Consumers Energy's $350. TCLP also offers on-bill financing ($5,000–$30,000). If you're in the Traverse City area, the utility rebate alone covers a significant portion of project cost.
DTE Energy
Detroit metro, ~2.3 million electric customers
| Equipment | Rebate |
|---|---|
| Cold-climate ASHP (16+ SEER2, 9.1+ HSPF2, EER2 ≥10) | $1,200 |
| Cold-climate ASHP (lower efficiency tiers) | $900–$1,000 |
| Standard ASHP (non-cold-climate) | $150–$500 |
| Ductless mini-split | $700–$1,000 |
| Ground-source heat pump | $600–$800 |
All equipment must be AHRI-certified matched systems. Rebates limited to customers replacing existing electric heating. Monitor fund availability — DTE shows a 20% funding indicator.
Consumers Energy
Western/central Michigan, ~1.9 million electric customers
| Equipment | Rebate |
|---|---|
| ASHP (SEER2 15.2+) | $300 |
| Ductless mini-split (SEER2 17+, HSPF2 8+) | $350 |
| Ground-source heat pump | $200–$300 |
2026 program runs through December 31, 2026 or until funds are exhausted. Does not differentiate between cold-climate and standard ASHPs.
Traverse City Light & Power (TCLP)
Traverse City area — Michigan's most generous utility rebates
| Equipment | Rebate |
|---|---|
| Cold-climate ducted ASHP (SEER2 ≥15.2, EER2 ≥9, HSPF2 ≥8.1, COP ≥1.75 at 5°F) | $3,000/system |
| Standard ducted ASHP (SEER2 ≥15.2, no COP requirement) | $1,500/system |
| Cold-climate ductless mini-split (SEER2 ≥16, COP ≥1.75 at 5°F) | $3,000/system |
| HPWH (≤55 gal, UEF ≥2.2) | $1,000 |
| Electric panel upgrade | $1,000 |
Program year: July 1, 2025 – June 30, 2026. On-bill financing available ($5,000–$30,000).
Lansing Board of Water & Light (BWL)
Lansing area — Hometown Energy Savers® program
| Equipment | Rebate |
|---|---|
| Central ASHP (tiered by SEER2: 15.2–21+) | $200–$600 |
| Mini/multi-split | $300 ($500 if replacing electric resistance) |
| HPWH (ENERGY STAR, EF ≥2.0) | $500 |
Program runs January–December 2026. Administered by Michigan Energy Options.
Other Michigan Utilities
UPPCO (Upper Peninsula)
Offers heat pump rebates and an EMPOWER program with free upgrades for income-qualified customers. UPPCO territory was a MiHER pilot region. Contact (906) 449-2222 or energyefficiency@uppco.com for current rebate amounts.
Great Lakes Energy (cooperative)
Air-source heat pump rebates of $250–$750. Geothermal rebates of $500–$750. Members using heat pumps as primary heat may qualify for the Efficient Electric Heating (EEH) rate — a 3¢/kWh credit on heat pump energy use during the November–May heating season. Contact (888) 485-2537 for current program details.
Cherryland Electric (cooperative)
Most recent published schedule (2025): $500 for centralized ASHPs, $500 for mini-splits, $500 for HPWHs, $1,000 for geothermal. $10,000 annual cap per membership. Supports fuel-switching from gas/propane. Contact (231) 486-9261 to confirm 2026 availability.
Ann Arbor: A2ZERO Home Energy Rebate Program
Ann Arbor operates Michigan's only major city-level heat pump incentive, funded by a voter-approved Community Climate Action Millage ($1.9M annually). Dual-fuel systems (heat pump + gas furnace backup) are not eligible — the program pushes toward full electrification. Equipment must be NEEP-listed with minimum SEER2 15.2 and HSPF2 8.0.
| Measure | Market Rate | Income-Qualified (≤120% AMI) |
|---|---|---|
| Cold-climate HP (central or mini-split) | $4,000 | $5,500 |
| Ductwork modifications | $1,500 | $2,500 |
| Heat pump water heater | $1,000 | $2,000 |
| Electric panel upgrade | $1,000 | $2,000 |
Program runs through June 30, 2026 with plans for annual renewal. Ann Arbor explicitly encourages stacking A2ZERO with MiHER and utility rebates.
How Programs Stack
Utility rebates, MiHER (HOMES/HEAR), and A2ZERO draw from different funding sources and can stack. The key constraint: HOMES and HEAR cannot cover the same measure. Scenario: $17,500 whole-home ducted cold-climate ASHP installation.
Above 150% AMI — HOMES + Utility
- HEAR: not eligible
- HOMES: up to $4,000 (if 35%+ savings)
- Utility rebate: $300–$1,200
- Federal 25C/25D: $0 (expired)
Realistic maximum: ~$600–$5,200
Above 150% AMI in Ann Arbor
- HOMES: up to $4,000 (if 35%+ savings)
- A2ZERO (market rate): $4,000
- DTE rebate: up to $1,200
Realistic maximum: ~$9,200
80–150% AMI — HEAR + Utility
- HEAR heat pump rebate: up to $8,000
- DTE or Consumers rebate: $300–$1,200
Realistic maximum: ~$8,300–$9,200
Below 80% AMI in Ann Arbor — Best Case
- HEAR heat pump rebate: up to $8,000
- A2ZERO (income-qualified): $5,500
- DTE rebate: up to $1,200
Realistic maximum: ~$14,700
What You'll Actually Pay
On a $17,500 project: $2,800 (low-income Ann Arbor) to $16,900 (above 150% AMI, utility rebate only) out of pocket. Most qualifying households (≤150% AMI) will see $8,000–$9,000 in MiHER incentives alone. The loss of the $2,000 Section 25C credit is most acutely felt by households above 150% AMI. No state tax credit exists for air-source heat pumps in Michigan.
The 25C loss adds ~$2,000 to out-of-pocket for above-150% AMI households. HOMES partially offsets this for whole-home projects achieving 35%+ energy savings.
Weatherization & Financing
Michigan Saves
Michigan Saves offers unsecured financing through participating credit unions, with advertised rates as low as 6.24% APR and terms up to 180 months. Maximum loan amounts vary by lender and can reach $100,000 in some cases. Can be combined with all rebate programs.
Weatherization Assistance Program (WAP)
Michigan's WAP provides free energy upgrades — potentially including heat pump installation — for households at or below 200% of the Federal Poverty Level. Administered by the Michigan Department of Health and Human Services through 26 Community Action Agencies across the state.
✓ Best Candidates for Heat Pumps in Michigan
Households ≤150% AMI who qualify for MiHER HEAR (up to $8,000). Homeowners switching from propane or fuel oil in rural and northern Michigan (largest operating cost savings). Ann Arbor residents who can stack A2ZERO + MiHER + DTE. TCLP customers in Traverse City (up to $3,000 utility rebate alone). Low-income households who may qualify for both WAP and HEAR.
Cold Climate: Why Equipment Choice Matters
Michigan spans IECC Climate Zones 5A through 7. Cold-climate ASHPs meeting ENERGY STAR criteria (COP ≥1.75 at 5°F) are essential statewide, and equipment rated to −15°F or lower is strongly recommended for northern Michigan and the Upper Peninsula.
| City | Design Temp | Primary Heating Fuel |
|---|---|---|
| Detroit | 0°F | Natural gas |
| Grand Rapids | ~0°F | Natural gas |
| Lansing | −3.5°F | Natural gas |
| Marquette | −8 to −10°F | Propane / fuel oil |
Natural gas dominates southern Michigan heating. Propane and fuel oil concentrate in rural areas, northern Michigan, and the UP. Heat pumps are most economically attractive where they displace propane or fuel oil, making rural and UP households the strongest economic candidates for conversion — and also the areas requiring the most capable cold-climate equipment.
Manual J load calculations are important in Michigan's climate. Proper ductwork assessment matters too — many Michigan homes have aging duct systems designed for furnaces that may need modification for optimal heat pump performance. For information on pairing heat pumps with home battery storage, see our guide to home batteries in 2026.
How to Apply
Check your income eligibility
HEAR requires ≤150% AMI. Enhanced rebates at ≤80% AMI. Use your household size and county to determine your AMI level.
Find an approved MiHER contractor
HEAR rebates must go through an approved contractor who applies the discount at point of sale. Call 855-510-7080 for the contractor list.
Get pre-approval before work begins
MiHER does not accept retroactive claims. Your project must be pre-approved before installation starts.
Apply for your utility rebate separately
Utility rebates use their own application processes. Your contractor can often help with this. Ann Arbor residents should also apply for A2ZERO through the City of Ann Arbor — it stacks with MiHER and utility rebates.
What to Watch
IRA Funding Runway
MiHER's $210 million in IRA funding is expected to last until September 2031 or until depleted. Federal policy changes could affect the timeline. Monitor fund levels at michigan.gov/egle or call 855-510-7080.
DTE Funding Indicator
DTE shows a 20% funding indicator for its heat pump rebate program. When funds run out, the program pauses until the next cycle. Check availability before committing to a project.
A2ZERO Program Renewal
Ann Arbor's A2ZERO program runs through June 30, 2026 with plans for annual renewal. Budget and rebate amounts may change for the next program year.
Utility Gas-to-Electric Policy
DTE and Consumers Energy currently restrict most heat pump rebates to electric-to-electric replacements. If either utility expands to cover gas-to-electric fuel-switching, it would significantly change the rebate landscape for most Michigan homeowners.
Frequently Asked Questions
What heat pump rebates are available in Michigan in 2026?
Michigan’s main heat pump rebate is the MiHER HEAR program, which offers up to $8,000 for a heat pump at point of sale for households at or below 150% of Area Median Income. Utility rebates add $200–$3,000 depending on your provider. DTE Energy offers $150–$1,200, Consumers Energy offers $300–$350, Traverse City Light & Power offers up to $3,000, and Lansing BWL offers $200–$600. The federal Section 25C tax credit expired December 31, 2025.
Is the Michigan MiHER program still open?
Yes. Michigan’s MiHER program launched statewide on April 14, 2025 and is accepting applications. It includes both HEAR (appliance-specific rebates) and HOMES (whole-home performance rebates). Funding of $210 million is expected to last until depleted or September 30, 2031.
Can I get a heat pump rebate if I heat with natural gas in Michigan?
DTE Energy and Consumers Energy restrict most heat pump rebates to customers replacing existing electric heating, not gas-to-electric conversions. However, the MiHER HEAR program specifically supports fuel-switching from gas or propane to electric heat pumps. Ann Arbor’s A2ZERO program also covers gas-to-electric conversions.
Do I need a cold-climate heat pump in Michigan?
Yes. Michigan’s winter design temperatures range from 0°F in Detroit and Grand Rapids to -10°F in Marquette. Cold-climate heat pumps rated to operate efficiently at 5°F or below are essential statewide. Look for equipment meeting ENERGY STAR cold-climate criteria: COP of 1.75 or greater at 5°F.
Can I stack Michigan heat pump rebates?
Yes. Utility rebates, MiHER (HEAR or HOMES), and local programs like Ann Arbor’s A2ZERO draw from different funding sources and can stack. The key constraint is that HOMES and HEAR cannot cover the same individual measure. A low-income household in Ann Arbor could potentially combine HEAR ($8,000) + A2ZERO ($5,500) + DTE ($1,200) for over $14,000 toward a cold-climate system.
What happened to the federal heat pump tax credit?
Both the Section 25C ($2,000/year for heat pumps) and Section 25D (30% for geothermal) federal tax credits expired December 31, 2025 under the One Big Beautiful Bill Act. As of March 2026, the IRS guidance reflects the credits as ended and no replacement federal heat pump credit is active.
Disclaimer: This page covers the main statewide, utility, and local heat pump incentives available to Michigan homeowners in 2026. It does not calculate savings, guarantee eligibility, or represent any incentive program. Michigan has additional cooperatives and municipal utilities that may offer rebates not listed here. We verify status regularly but programs can change without notice. Always confirm current amounts and eligibility with EGLE, your utility, and your contractor before making decisions.
See how this state compares → Heat Pump Rebates by State (2026)