Texas Heat Pump Rebates & Incentives (2026)
Texas has no statewide heat pump program and no state income tax. Your rebate depends entirely on which utility serves your home. Austin Energy offers approximately $3,000 for whole-home projects with 0% financing. In the deregulated market, Oncor provides performance-based incentives and CenterPoint offers up to $500. The state's $690 million IRA allocation — the largest in the country — has not launched. This guide covers all major Texas heat pump incentives available in 2026, including Austin Energy, Oncor, CenterPoint, CPS Energy, AEP Texas, CoServ, and the pending HEAR/HOMES programs. Here's what's actually available.
Last verified: March 22, 2026
Rates and program availability may change after this date.
Texas
Limited / Region-Dependent
Texas has no statewide heat pump rebate program and no state income tax. Rebates come from your local utility and vary widely. Austin Energy offers approximately $3,000 for whole-home projects plus 0% APR financing. Oncor provides performance-based incentives through approved contractors. CenterPoint offers up to $500 per unit. CPS Energy pays $90–$310 per ton. Federal tax credits (25C/25D) ended December 31, 2025. Texas received $690 million in IRA HOMES/HEAR rebate funding, but SECO has not launched the program.
Sources:
The short version
✓ Austin Energy: ~$3,000 + 0% financing
Whole-home projects average $3,000 in rebates. Heat pump rebates $1,000–$1,600 by tier, plus duct sealing, insulation, and solar screen add-ons. 0% APR loans up to $25,000 through September 2026.
✓ Deregulated TDU rebates: $300–$3,400
Oncor: performance-based, potentially $2,000–$3,400 for large high-efficiency systems. CenterPoint: up to $500/unit. CPS Energy: $90–$310/ton. AEP Texas: contractor-channel only.
✓ Potential savings: $0 to $11,000+
$0 (CoServ/NorthWestern territory) to $11,000+ (below 80% AMI, Austin Energy + HEAR when launched). Full electrification packages can reach ~$14,000 total for income-qualified households.
✗ Federal tax credits expired + no state credits
Section 25C and 25D both ended December 31, 2025. Texas has no state income tax, so no state tax credits for heat pumps are possible. Your utility is your only incentive source.
⚠ $690M in IRA rebates allocated but not launched
Texas received the largest IRA rebate allocation in the country — $690 million for HOMES and HEAR — and has distributed none of it. SECO is still in procurement for a program implementer. There are no approved contractors. Do not sign contracts based on HEAR rebate amounts until the program officially opens.
Federal tax credits: both expired
Section 25C (Energy Efficient Home Improvement Credit) and Section 25D (Residential Clean Energy Credit) both terminated for any property placed in service after December 31, 2025. The One Big Beautiful Bill Act (OBBBA) accelerated the sunset of both credits. Texas has no state income tax, so no state-level tax credits for heat pumps are possible regardless of federal policy. For more details, see our federal heat pump tax credit explainer.
Equipment purchased in 2025 but installed in 2026 does not qualify — the "placed in service" date is the controlling event. Homeowners who completed installations by December 31, 2025 can still claim credits on their 2025 tax return using IRS Form 5695.
The OBBBA did not repeal the IRA's HOMES and HEAR rebate programs. These are separately appropriated federal funds, not tax-code provisions. They survive — but Texas has not launched them yet.
$690 million in IRA rebates: allocated but not launched
Texas was allocated $690 million in federal HOMES (~$346M) and HEAR (~$344M) rebate funding — the largest allocation in the country. The State Energy Conservation Office (SECO) published an RFP for a program implementer with responses due July 30, 2025. A separate monitoring RFP was issued in early 2026. As of March 2026, the program has not launched and there are no approved contractors.
HEAR rebate amounts (when launched)
| Income tier | Coverage | Heat pump cap | Household cap |
|---|---|---|---|
| Below 80% AMI | 100% of costs | $8,000 | $14,000 |
| 80–150% AMI | 50% of costs | $8,000 | $14,000 |
| Above 150% AMI | Not eligible for HEAR (may qualify for HOMES) | ||
⚠ Common mistake: signing contracts based on HEAR amounts
SECO explicitly warns: "We strongly advise against entering into any agreements associated with the HOMES and HEAR rebate programs until they are formally launched and a list of approved contractors is made available." Installations before program launch are not eligible.
Texas received the largest IRA allocation and has distributed none of it
At $690 million, Texas's HOMES/HEAR allocation dwarfs every other state. New York ($318M), California ($290M), and Pennsylvania ($259M) have all made more progress toward launch. The gap between funding allocated and funding deployed is larger in Texas than anywhere else — meaning the eventual launch will represent the single biggest shift in heat pump economics for any state.
How Texas is different: TDU vs. REP
Most of Texas operates in a deregulated electricity market. Your TDU (Transmission & Distribution Utility) owns the power lines and administers energy efficiency rebate programs. Your REP (Retail Electric Provider) sells you electricity. Your TDU is determined by your address and cannot be changed. Switching REPs does not affect your rebate eligibility. Some areas are regulated — Austin (Austin Energy) and San Antonio (CPS Energy) handle everything.
| Utility / TDU | Service area | Heat pump rebate range |
|---|---|---|
| Austin Energy | Austin metro (regulated) | ~$3,000 whole-home + 0% financing |
| Oncor | DFW, Lubbock, Waco, Tyler (deregulated TDU) | Performance-based, up to $2,000–$3,400 |
| CPS Energy | San Antonio, Bexar County (regulated) | $90–$310/ton ($360–$1,240 typical) |
| CenterPoint | Houston, Galveston, Beaumont (deregulated TDU) | Up to $500/unit |
| AEP Texas | South & West Texas (deregulated TDU) | Contractor-channel only |
| CoServ | Denton/Collin County | No heat pump rebates |
Utility programs in detail
Austin Energy — best rebates in Texas
Austin Energy operates the most generous heat pump incentive program in Texas. The Home Energy Savings whole-home program averages ~$3,000 in total rebates (heat pump $1,000–$1,600 by tier, plus duct sealing, insulation, smart thermostats, and solar screens). The standalone AC/heat pump rebate offers $250–$425 for single-equipment replacement. Austin Energy also offers 0% APR financing through Velocity Credit Union ($1,500–$25,000, up to 10 years) available through September 30, 2026.
Income-qualified customers (≤80% MFI) can access free weatherization plus rebates and 0% financing on heat pump systems through the Customer Assistance Program.
Oncor — DFW, Lubbock, Waco, Tyler
Oncor's Home Energy Efficiency (HEE) Standard Offer Program provides performance-based incentives that vary by system size, efficiency, and calculated energy savings — potentially $2,000–$3,400 for large, high-efficiency installations. Approved contractor required. 2026 cycle runs approximately February through November (first-come, first-served — funds have historically run out before year-end). ENERGY STAR required, SEER2 16+ recommended. Oncor also offers a Retail Products Program with point-of-sale HPWH discounts up to $500.
CenterPoint Energy — Houston metro
CenterPoint's Standard Offer Program provides up to $500 per qualifying heat pump unit. ENERGY STAR required. Also offers $75 smart thermostat instant discount and free CoolSaver A/C tune-up. Hard-to-Reach program for households ≤200% FPG often covers 100% of costs.
CPS Energy — San Antonio
Tiered per-ton rebates of $90–$310 per ton depending on efficiency and replacement type. For a typical 4-ton system at the highest tier, that's roughly $1,100 in rebates. TDLR-licensed contractor required. 2026 program dates: February 1, 2026 – January 31, 2027. Casa Verde Weatherization provides ~$5,000 in free improvements for income-qualified customers.
Other utilities
AEP Texas (South/West TX): contractor-channel incentives only, no simple homeowner-facing rebate. Targeted Low-Income Program available. TNMP: tiered rebates, amounts vary. CoServ (Denton/Collin): no heat pump rebates. Some co-ops (Tri-County, United Cooperative) offer $150–$200 with limited funding.
Note about gas utilities: In the deregulated market, gas utilities like Atmos Energy do not offer electric heat pump rebates. CPS Energy and MLGW are exceptions as dual-service providers.
How programs stack in Texas
With no federal tax credit and no state programs, Texas homeowners currently rely on a single utility rebate plus manufacturer promotions. When HEAR launches, income-qualified households can stack utility + HEAR. Total combined incentives cannot exceed project cost.
Above 150% AMI — Austin Energy territory ($14,000 whole-home project)
- Austin Energy whole-home rebate: ~$3,000
- HEAR: not eligible
- HOMES (when launched, 20%+ savings): $2,000
- 0% APR financing: available now
Realistic maximum: ~$3,000–$5,000
80–150% AMI — Oncor territory ($12,000 heat pump)
- Oncor HEE incentive: $1,000–$2,500
- HEAR (when launched, 50% of cost): up to $6,000
Realistic maximum: ~$7,000–$8,500
Below 80% AMI — Austin Energy territory ($14,000 whole-home)
- Austin Energy rebate: ~$3,000
- HEAR (when launched, 100% of cost): up to $8,000
- Austin Energy Weatherization: additional free upgrades
Realistic maximum: ~$11,000+
What you'll actually pay
A typical Texas heat pump installation costs $8,000–$16,000. Today, Austin Energy customers pay $5,000–$11,000 after rebates. Most deregulated-market homeowners pay $7,500–$15,500 after a few hundred dollars in TDU incentives. When HEAR launches, income-qualified households below 80% AMI in Austin could see costs drop to $3,000–$6,000. In CoServ or NorthWestern territory with no active utility rebates, expect to pay full price.
Texas has no state income tax and no state heat pump incentive program. The stacking scenarios above do not include manufacturer rebates ($150–$1,665 seasonal, varies by brand).
Weatherization and income-qualified programs
Texas operates a statewide Weatherization Assistance Program (WAP) through the Texas Department of Housing and Community Affairs (TDHCA) for households at or below 200% of the federal poverty level. WAP provides free whole-house energy improvements — including HVAC replacement — at no cost. Contact your local subrecipient agency, call 877-541-7905, or dial 2-1-1.
The Comprehensive Energy Assistance Program (CEAP) provides utility bill payment assistance, emergency energy crisis services, and equipment for households at or below 150% of federal poverty guidelines.
Several utilities run additional low-income programs: Austin Energy Weatherization Assistance, Oncor Low-Income Weatherization, CPS Energy Casa Verde (~$5,000 average), CenterPoint Hard-to-Reach (up to 100% cost coverage), and AEP Texas Targeted Low-Income.
Texas climate and heat pump selection
Texas is a cooling-dominant market — cooling accounts for 70–80% of annual HVAC energy use. Your SEER2 rating (cooling efficiency) has 2–3x more impact on annual energy bills than HSPF2 (heating efficiency). Texas spans IECC Climate Zones 2A through 3B.
| City | ASHRAE 99% design temp | Climate zone |
|---|---|---|
| Houston | 29°F | 2A (Hot-Humid) |
| Dallas | 22°F | 3A (Warm-Humid) |
| San Antonio | 27°F | 2A (Hot-Humid) |
| Austin | 26°F | 2A (Hot-Humid) |
| El Paso | 24°F | 3B (Warm-Dry) |
The DOE minimum for Texas is SEER2 14.3, but that does not qualify for most utility rebates. Most programs require ENERGY STAR (SEER2 15.2+), and top tiers require SEER2 16+. For Houston and the Gulf Coast, variable-speed compressors are strongly recommended for humidity control. All installations require a TDLR-licensed HVAC contractor and most cities require mechanical permits.
Pairing a heat pump with a home battery system can reduce energy costs further, especially for homeowners with solar or on time-of-use rates.
✓ Best candidates for a heat pump in Texas
Austin Energy customers — highest rebates and 0% financing available today. Homes with high cooling demand — heat pumps excel in Texas's long cooling season and SEER2 improvements pay back fastest here. Homeowners upgrading a full HVAC system — whole-home programs (Austin, Oncor) offer the best stacking. Income-qualified households willing to wait for HEAR — up to $8,000 when it launches. Homes replacing electric resistance or aging AC — largest efficiency gains regardless of rebate level.
How to apply for Texas incentives
Because there is no statewide program, the process depends entirely on your utility.
Identify your utility / TDU
Check your electric bill. In the deregulated market, your TDU (Oncor, CenterPoint, AEP Texas, TNMP) administers rebates — not your REP. In Austin or San Antonio, your single utility handles everything.
Use an approved/participating contractor
Oncor, CPS Energy, and Austin Energy whole-home programs require approved contractors. The contractor handles the incentive application and passes savings through. Get at least 3 quotes.
Confirm equipment meets rebate requirements
ENERGY STAR certified minimum. SEER2 16+ recommended for best rebate value and Texas performance. Variable-speed for Houston/Gulf Coast humidity control.
Apply early — budgets deplete
Oncor's HEE program is first-come, first-served and has historically exhausted funds before year-end. Austin Energy applications due within 90 days. CPS Energy within 30 days.
What to watch for in Texas
IRA funding runway
Texas's $690 million HOMES/HEAR allocation is authorized through September 30, 2031 or until depleted. The OBBBA did not rescind these funds. SECO is in active procurement for a program implementer — no launch date announced.
Oncor budget depletion
Oncor's HEE program is first-come, first-served and has historically exhausted funds before year-end. Apply early in the calendar year for best chances.
Austin Energy 0% APR window
The Velocity Credit Union 0% financing offer runs through September 30, 2026. After that, terms may change. This is the strongest financing offer in the state.
Frequently asked questions
What heat pump rebates are available in Texas in 2026?
Texas has no statewide heat pump rebate program. Rebates come from your local utility. Austin Energy offers approximately $3,000 for whole-home projects plus 0% APR financing. Oncor provides performance-based incentives through approved contractors. CenterPoint offers up to $500 per unit. CPS Energy pays $90–$310 per ton. Federal Section 25C and 25D tax credits expired December 31, 2025. Texas has no state income tax, so no state-level credits are possible.
Can I stack utility rebates with HEAR in Texas?
When SECO launches the HEAR program, utility rebates should be stackable with federal HEAR rebates. Total combined incentives cannot exceed total project cost. Currently, only utility rebates are available. Austin Energy customers have the strongest stacking opportunity today with ~$3,000 in rebates plus 0% financing.
What is the difference between a TDU and a REP in Texas?
In Texas’s deregulated electricity market, your TDU (Transmission and Distribution Utility) owns the power lines and administers energy efficiency rebate programs. Your REP (Retail Electric Provider) sells you electricity. Your TDU is determined by your address and cannot be changed. Switching REPs does not affect your rebate eligibility. Major TDUs: Oncor (DFW), CenterPoint (Houston), AEP Texas (South TX), TNMP (select areas).
What happened to the $690 million in IRA rebates for Texas?
Texas was allocated $690 million in federal HOMES and HEAR rebate funding through the Inflation Reduction Act — the largest allocation in the country. The State Energy Conservation Office (SECO) is still in the procurement process for a program implementer and has not launched either program. SECO warns there are no approved contractors yet. When launched, income-qualified households could receive up to $8,000 for heat pump installations.
Which Texas utility offers the best heat pump rebate?
Austin Energy offers the most generous rebates in Texas, with whole-home heat pump projects averaging $3,000 in rebates plus 0% APR financing through Velocity Credit Union. CPS Energy in San Antonio offers $90–$310 per ton. In the deregulated market, Oncor provides performance-based incentives that can reach $2,000–$3,400 for large, high-efficiency installations.
What SEER2 rating should I get for a heat pump in Texas?
The DOE minimum for Texas is SEER2 14.3, but this does not qualify for most utility rebates. SEER2 16+ is recommended for Texas’s cooling-dominant climate. Variable-speed compressors are important for humidity control, especially in Houston and the Gulf Coast. Higher-efficiency systems also qualify for larger utility rebates.
Sources
- Austin Energy — Rebates & Incentives
- Oncor — Home Energy Efficiency Program
- CenterPoint Energy — Residential Efficiency Programs
- CPS Energy — SaveNow Rebates
- SECO — IRA Rebates (HOMES/HEAR Status)
- IRS 25C (expired)
- AEP Texas — Residential Programs
- CoServ — Energy Saving Programs
- TDHCA — Weatherization Assistance Program
Disclaimer: This page covers the main utility and IRA-related heat pump incentives available to Texas homeowners in 2026. It does not calculate savings, guarantee eligibility, or represent any incentive program. Texas has no statewide heat pump program — rebates vary entirely by utility territory and may change without notice. Oncor and CenterPoint incentives are performance-based and amounts shown are estimates. We verify status regularly but programs can change without notice. Always confirm current amounts and eligibility with your utility and your contractor before making decisions.