Texas Heat Pump Rebates 2026 — Utility Programs After Federal 25C Expired and No State HEEHRA Yet

Texas is the outlier — and not in a good way

Most states had a simple story after January 1, 2026: the federal IRS Energy Efficient Home Improvement Credit (Section 25C) expired, and the state stepped in with a HEEHRA implementation to soften the blow. California, New York, Massachusetts — all of them channeled IRA funding into active state programs that can reduce a heat pump installation by $4,000 to $10,000 or more.

Texas has not done this.

SECO — the State Energy Conservation Office, which sits inside the Texas Comptroller’s office and is the designated vehicle for the state’s IRA home rebate programs — has explicitly confirmed that both the HOMES (Home Owner Managing Energy Savings) rebate program and the HEAR (Home Electrification and Appliance Rebates) program have not yet launched. SECO has gone so far as to post a fraud alert warning Texans that there are currently no approved contractors for either program, and that any contractor claiming to be SECO-approved for these rebates is misrepresenting the program’s status.

That leaves most Texas homeowners with utility-territory rebate programs as the only active incentive avenue. Those programs exist, they’re real, and they vary meaningfully by where in Texas you live. But they’re narrower than the stacked programs available in states that have activated HEEHRA. For many Texas homeowners — particularly those in rural co-op territory, and particularly low-income households — the post-25C, pre-HEEHRA window looks like a stretch of $0 in available incentives.

There’s a uniquely Texas counterpoint worth naming: the ERCOT grid. Texas operates its own standalone electricity grid, separate from the Eastern and Western interconnections that serve the rest of the contiguous United States. ERCOT runs into capacity stress during August heatwaves — the summer of 2022, for example, saw the grid come within a narrow margin of rolling blackfires. Heat pumps reduce peak summer cooling demand by running more efficiently than resistance-heat systems, and this is genuinely worth something in Texas beyond just the rebate math. Some analysts expect Texas utilities to increase efficiency incentives specifically because of the grid reliability pressure — but as of mid-2026, that shift has not materialized into substantially higher rebate amounts.

Here is what the current landscape actually looks like, which programs exist for which territories, and how two specific households would fare under the 2026 rules.

The programs, territory by territory

State level — what’s missing

Texas has not implemented HEEHRA via SECO or any other state vehicle as of mid-2026. The federal IRA allocated approximately $400 million in HEEHRA funding to Texas — one of the largest state allocations in the country, reflecting Texas’s population. That money is not being delivered to homeowners yet.

SECO is the designated state administrator. If and when the programs launch, check the SECO portal directly at comptroller.texas.gov/programs/seco/ for contractor approval status and enrollment details. Do not engage any contractor who claims SECO certification for these programs before that list is published.

Utility territory — the real options in 2026

Texas’s electricity market adds a layer of confusion that other states don’t have: most Texans in the deregulated zones (which cover most of the state) choose their own Retail Electric Provider (REP), but the physical wires and the rebate programs are run by the Transmission and Distribution Utility (TDU) serving their area. The TDU is who you pay a small delivery charge to; the REP is who you pay for the electricity itself. When a rebate program says “Oncor customers” or “CenterPoint customers,” it means customers in those TDU service territories — regardless of which REP they’ve chosen.

A note on municipal utilities: Austin Energy and CPS Energy are city-owned utilities that operate outside the retail electricity choice market. Austin Energy customers don’t choose an REP — they pay Austin Energy directly. Same for CPS Energy customers in San Antonio. These utilities have their own rebate programs that are independent of the Oncor/CenterPoint/AEP structure.

A note on co-ops: Pedernales Electric, Bluebonnet Electric, and the several dozen other rural electric cooperatives in Texas often have no heat pump rebate program. Their members in the Hill Country, East Texas, and rural Central Texas are, as of mid-2026, in a window with $0 in available incentives — no state HEEHRA, no utility rebate, no federal 25C.

Oncor — Take Control & Save

Oncor serves the largest TDU territory in the state and runs the Take Control & Save program for residential efficiency rebates. Historically this has included per-unit incentives for qualifying heat pump installations — structured as a per-ton rebate or a flat per-system amount tied to minimum efficiency ratings (typically SEER2 / HSPF2 thresholds).

Important caveat: The Take Control & Save website was inaccessible during our source verification in May 2026 (ECONNREFUSED). We cannot confirm current rebate amounts from the primary source. Verify directly at takecontrolandsave.com or by calling Oncor’s efficiency programs line. The typical range for residential heat pump rebates in Oncor programs has historically been $150–$500 per ton for qualifying equipment — but figures change annually and we are not publishing a specific current amount we couldn’t verify.

CenterPoint Energy

CenterPoint serves the Houston metro area as the TDU for one of the most heavily air-conditioned cities in the country. CenterPoint has run residential efficiency rebate programs including heat pump incentives. The CenterPoint rebate page was inaccessible (HTTP 404) during our verification. Verify current amounts and qualifying equipment directly at centerpointenergy.com before making any installation decision.

AEP Texas — TX SMART

AEP Texas covers the western and southern areas of the state — Corpus Christi, the Rio Grande Valley, San Angelo, and much of west Texas. AEP’s TX SMART (Standard Metering and Rate Tool, though the program is primarily an efficiency incentive) program includes residential rebates. Verify current program details at aeptexas.com.

Austin Energy

Austin Energy is the municipal utility serving Austin city limits. Austin Energy has historically maintained one of the more active residential efficiency programs in Texas, with rebates for qualifying heat pump installations. Note the geographic restriction: Austin Energy serves Austin city limits only. Residents of Round Rock, Cedar Park, Pflugerville, or other Austin-area municipalities are in Oncor territory and use the Oncor program instead.

Verify current Austin Energy rebate amounts and qualifying equipment at austinenergy.com. The city utility’s programs page was inaccessible (HTTP 404) during verification.

CPS Energy

CPS Energy serves San Antonio and surrounding areas as the municipal utility. Like Austin Energy, CPS operates independently and has its own residential efficiency incentive programs. Verify current heat pump rebate details at cpsenergy.com.

Federal 25C — expired for 2026

The IRS Energy Efficient Home Improvement Credit (Section 25C) allowed homeowners to claim up to $2,000 per year (30% of project cost, nonrefundable) for qualifying heat pump installations through December 31, 2025.

The credit expired. For 2026 installations, there is no federal 25C credit. If you installed a qualifying heat pump in 2023, 2024, or 2025, you can still claim the credit on the relevant year’s return — 2025 installations are claimable on your 2025 return filed in spring 2026, and require the Qualified Manufacturer Identification Number (QMID) for the equipment on Form 5695.

Incentive stack table

Worked example: Austin household, moderate-income

Scenario: A homeowner in Austin (Travis County), Austin city limits, in Austin Energy territory. Household of four, income of $95,000. Replacing a 15-year-old central AC with a 24k BTU single-zone heat pump. Home is 1,400 sq ft, zone 3A.

AMI calculation (required):

Travis County falls within the Austin–Round Rock–Georgetown, TX HUD Metro FMR Area. Per HUD’s FY2024 Income Limits tables (huduser.gov/portal/datasets/il.html), the 4-person median family income for this metro area is approximately $108,000. (HUD updates these annually — verify the current year’s figure at huduser.gov before applying to any income-tested program.)

• 4-person AMI (HUD 2024, Austin metro / Travis County): approximately $108,000
• 80% threshold: 0.80 × $108,000 = approximately $86,400
• 150% threshold: 1.50 × $108,000 = approximately $162,000

A $95,000 household income sits between the 80% threshold ($86,400) and the 150% threshold ($162,000), placing this household at approximately 88% of AMI — the moderate-income tier (80–150% AMI) under HEEHRA’s framework.

This household qualifies for the moderate-income tier IF Texas’s HEEHRA program were operational — which it is not as of mid-2026.

Available incentives in May 2026:

• Federal 25C: $0 — credit expired December 31, 2025.
• SECO HEAR program (moderate-income HEEHRA tier): $0 — program not launched. If/when it launches, a household at ~88% AMI would qualify for the moderate-income tier covering 50% of costs up to approximately $4,000. That is money sitting undelivered because SECO has not built the delivery vehicle.
• Austin Energy heat pump rebate: Austin Energy has historically offered efficiency rebates for qualifying HVAC equipment. Because the Austin Energy rebate page was inaccessible during our May 2026 verification, we cannot confirm a current dollar amount. Verify directly at austinenergy.com. For planning purposes, Austin Energy residential heat pump rebates have historically been in the $100–$800 range depending on equipment efficiency and capacity.

What this means in practice:

This household’s out-of-pocket cost is essentially the full installation cost minus whatever Austin Energy is currently offering — likely $100–$800, not the $4,000+ they’d capture under HEEHRA. A comparable household in Massachusetts would receive the Mass Save whole-home rebate (up to $10,000) plus a moderate-income component of up to $4,000, bringing the total stack to potentially $14,000 off a $16,000 job. A California household in SMUD territory would get at least $3,000 from SMUD alone. The TX gap relative to active-HEEHRA states is stark.

Practical step: Verify Austin Energy’s current rebate portal before installation. Ask your HVAC contractor whether they’re enrolled in any Austin Energy rebate program — Austin Energy has historically required contractor enrollment for rebate processing.

Worked example: Houston household, low-income

Scenario: A homeowner in Houston, Harris County, in CenterPoint Energy TDU territory. Household of four, income of $70,000. Replacing a failing 1-ton window unit with a 18k BTU mini-split. Home is a 900 sq ft older bungalow in a pre-war neighborhood.

AMI calculation (required):

Harris County falls within the Houston–The Woodlands–Sugar Land, TX HUD Metro FMR Area. Per HUD’s FY2024 Income Limits tables (huduser.gov/portal/datasets/il.html), the 4-person median family income for this metro area is approximately $95,000. (HUD updates these annually — verify current figures at huduser.gov.)

• 4-person AMI (HUD 2024, Houston metro / Harris County): approximately $95,000
• 80% threshold: 0.80 × $95,000 = approximately $76,000
• 150% threshold: 1.50 × $95,000 = approximately $142,500

A $70,000 household income sits below the 80% threshold ($76,000), placing this household at approximately 74% of AMI — the low-income tier (≤80% AMI) under HEEHRA’s framework.

In any state that has activated HEEHRA, a household at this income level would qualify for 100% coverage of qualifying installation costs, up to approximately $8,000. That would make a modest single-zone mini-split installation essentially free.

Available incentives in May 2026:

• Federal 25C: $0 — credit expired December 31, 2025.
• SECO HEAR program (low-income HEEHRA tier): $0 — program not launched. This household, with income at ~74% AMI, is exactly who HEEHRA was designed to fully cover. The federal allocation exists; the delivery mechanism does not.
• CenterPoint Energy efficiency rebate: CenterPoint has operated residential heat pump rebates for Houston-area customers. Because the CenterPoint rebate page was inaccessible (HTTP 404) during May 2026 verification, we cannot confirm a current specific amount. Verify directly at centerpointenergy.com. Historically, CenterPoint has offered flat rebates for qualifying split-system heat pumps, typically in the $150–$400 range for a single-zone unit.

What this means in practice:

Texas low-income households are the biggest losers from the current gap between 25C expiration and HEEHRA non-launch. A Houston household at 74% AMI would receive up to $8,000 in free installation money under HEEHRA in a state like New York or Massachusetts. In Texas, they receive the CenterPoint rebate — historically a few hundred dollars — and nothing else. The $8,000+ gap is real and it falls hardest on the households the program was designed to help most.

If SECO launches the HEAR program before your planned installation date, this household would qualify for the full low-income tier and the calculus changes dramatically. Check comptroller.texas.gov/programs/seco/ before scheduling your installation.

Eligibility gotchas specific to Texas

The TDU vs. REP confusion is the most common mistake. Most Texans in the deregulated market pay their electricity bill to a Retail Electric Provider — Reliant, TXU, Green Mountain, Pulse Power, and dozens of others. The REP handles billing, plans, and customer service. The REP does NOT administer efficiency rebates and does NOT know what TDU territory you’re in. Your TDU is the entity that physically delivers electricity to your home, and your TDU is who administers rebate programs. To find your TDU: look at your electricity bill for the delivery charges line item (it will say “Oncor Delivery” or “CenterPoint Delivery” etc.), or enter your address at powertochoose.org which maps TDU territory.

Municipal utilities are completely separate from the deregulated TDU structure. Austin Energy and CPS Energy customers don’t have REPs — they pay the municipal utility directly, and the municipal utility runs its own rebate programs. If you live in Austin city limits, you’re in Austin Energy territory; if you’re in San Antonio, you’re in CPS territory. Residents of suburban municipalities adjacent to these cities are often NOT in the municipal utility territory even if they live 5 miles from downtown. Confirm your exact utility by entering your address at the utility’s service area map or calling their customer service line.

Co-op territory means no utility rebate. Roughly a quarter of Texas’s land area is served by rural electric cooperatives rather than IOUs or municipal utilities. Cooperatives like Pedernales Electric (serving the Hill Country west of Austin), Bluebonnet Electric (Bastrop, Lee, Caldwell counties), and many others typically have no heat pump rebate program. Homeowners in co-op territory currently have no active rebate — federal 25C is gone, state HEEHRA isn’t launched, and most co-ops don’t offer equipment incentives. This gap is especially acute in rural areas where heat pump penetration is lowest and the efficiency gains from adoption would be highest.

TDLR contractor licensing is required. The Texas Department of Licensing and Regulation (TDLR) requires an Air Conditioning and Refrigeration contractor license for any HVAC installation in Texas, including mini-splits and ducted heat pumps. DIY installation on a split system is not legal under Texas licensing rules, unlike some other states. In addition to the TDLR contractor license, most municipalities require a mechanical building permit for HVAC replacement. Non-permitted installations can void manufacturer warranties and, importantly, can disqualify rebate claims — most utility rebate programs ask for permit documentation during verification.

Utility rebate contractor enrollment varies by program. Each TDU program has its own contractor enrollment process. Oncor’s Take Control & Save requires enrollment in the Oncor Service Provider Network. CenterPoint has its own approved contractor list. Austin Energy and CPS Energy run separate enrollment processes for their programs. A highly-rated HVAC company that isn’t enrolled in your specific TDU’s program cannot generate a rebate for you — even if they do excellent work. Before signing any contract, ask the contractor directly: “Are you enrolled in [Oncor/CenterPoint/Austin Energy/CPS] rebate programs?” and verify it.

Hot-climate performance claims deserve skepticism. Texas is the state where heat pumps make the strongest economic case — cooling-dominant climates are where heat pumps shine hardest against gas and resistance alternatives — but it’s also the state where some contractors oversell heating performance. For Houston, Austin, and San Antonio (zones 2A–3A), you don’t need a cold-climate rated unit. For the Dallas/Fort Worth metro (zone 3A), a standard inverter heat pump handles typical winter conditions adequately. Only the Panhandle (Amarillo, Lubbock, zone 4A) sees winters that make cold-climate performance specs genuinely important. Don’t pay a cold-climate premium for a Houston installation.

Eligible product picks by Texas climate zone

Texas spans more climate zone diversity than any other state in the contiguous US — and most of that diversity runs toward heat, not cold. Here’s how the recommended equipment maps to the state’s zones:

Houston, Gulf Coast, southeast Texas (zone 2A) — cooling is the priority

Houston’s climate is defined by long, humid summers with heat indices that regularly exceed 105°F, and mild winters that rarely see temperatures below 30°F. The average Houston January low is 45°F. For this climate, standard inverter heat pumps deliver outstanding efficiency — there’s no need for cold-climate specifications, and the extended-capacity heat pumps designed for New England winters are overkill for Houston.

A single-zone inverter mini-split in the 24k BTU class covers a typical Houston bedroom suite, converted garage, or home office conversion efficiently. The Mr Cool DIY 24k is sized right for these applications and uses a pre-charged line set that licensed HVAC technicians can complete without specialty refrigerant handling equipment.

Dallas, Austin, San Antonio metros (zone 3A) — whole-home retrofit

The zone 3A corridor — Dallas/Fort Worth, Austin, and San Antonio — combines punishing summers with occasional winter cold snaps. The 2021 February freeze event was the tail end of an extreme statistical outlier, but the DFW area does see multiple weeks per year with overnight lows in the 20s–30°F range. Standard inverter heat pumps perform adequately in these temperatures; you don’t need extended cold-climate specs for a zone 3A home.

For a whole-home retrofit in the zone 3A corridor — replacing a central gas furnace or an aging ducted AC with a multi-zone heat pump system — a 36k BTU multi-zone system covers a 1,400–2,000 sq ft Texas home without oversizing. Multi-zone configurations handle the large open-plan floor plans common in Texas homes better than single-head alternatives.

Texas Panhandle — Amarillo, Lubbock (zone 4A) — cold-climate matters here

The Panhandle is the one part of Texas where cold-climate heat pump specifications matter. Amarillo’s January average low is 23°F, and multi-day stretches below 10°F are not uncommon. Lubbock sees similar conditions. For zone 4A applications, an extended-cold-climate rated system is the right specification — not to match New England standards, but to maintain useful heating capacity on the coldest Panhandle nights without relying entirely on supplemental resistance heat.

The Mr Cool Hyper 18k is built for exactly this operating range, with performance specs extending to −13°F. For a single zone in an Amarillo home — a main bedroom, a home office, or a supplemental zone in an older home — this is the appropriate unit class. Note: for most of Texas, this is overkill. The Hyper line is the right recommendation only for the Panhandle and the small cluster of high-elevation west Texas communities on the New Mexico border.

What changes after mid-2026

The most important variable is SECO’s HOMES and HEAR program launch date. Federal IRA funding is allocated to Texas — the state has been assigned one of the largest HEEHRA funding pools in the country. SECO’s challenge has been building the administrative and contractor-approval infrastructure to deliver it. Watch comptroller.texas.gov/programs/seco/ for updates. When the program launches, Texas households will have access to the same HEEHRA tier structure as other states: up to $8,000 for low-income households (≤80% AMI), up to $4,000 for moderate-income households (80–150% AMI).

The ERCOT grid’s summer capacity constraints are a secondary driver. ERCOT has identified demand reduction during peak summer afternoons as a reliability priority. Texas utilities have a structural incentive to encourage heat pump adoption because heat pumps lower summer peak demand compared to less-efficient cooling systems — and several ERCOT-adjacent efficiency programs (like Oncor’s demand response offerings) are already structured around peak demand reduction. If ERCOT experiences another near-capacity event in summer 2026, that political pressure may accelerate utility incentive increases for high-efficiency HVAC equipment. We’ll update this page when utility program changes become confirmed.

On the federal side, 25C’s expiration was a policy decision. If Congress acts to reinstate or extend the credit, we’ll update this page. For 2026 installations, plan around utility programs only.

Related

Tools and guides:

• BTU sizing calculator — size the system before specifying any equipment; Texas’s range from coastal Gulf to Panhandle plateau means the right BTU class can swing 50% for similar square footage.
• DIY mini-split installation guide — step-by-step on the install process for permit-eligible systems.
• Federal heat pump rebates — 25C history and the 2025 cutoff; for Texans, this was the only tax-side incentive while it was active.

Other state rebate pages:

• California heat pump rebates — TECH Clean’s funding-cap situation, the SMUD Contractor Network requirement, EBD Direct Install.
• New York heat pump rebates — NY Clean Heat’s seven-utility administration model, Con Edison’s $8–10k air-source tier, EmPower+ for low-income.
• Massachusetts heat pump rebates — Mass Save’s $10k whole-home tier, the Home Energy Assessment gate, the MLP-town carve-out.
• Washington heat pump rebates — Pacific Northwest utility programs and Pacific-state policy contrast.

Frequently asked questions

Why doesn’t Texas have a state HEEHRA program?

Texas was allocated IRA funding for both the HOMES and HEAR programs, but implementing these rebates required SECO to build a contractor approval system, income verification pipeline, and rebate payment infrastructure from scratch. Texas has been slower than most states to complete this build-out. The process is also politically complicated — Texas has historically been skeptical of federally structured energy programs, and some of the implementation delays reflect deliberate caution about program design rather than pure administrative bottleneck. The funding exists; the delivery mechanism has not been approved and launched as of mid-2026.

Does my retail electricity provider handle the rebate?

No. This is the most common point of confusion for Texas homeowners in the deregulated market. Your REP (Retail Electric Provider — Reliant, TXU, Green Mountain, etc.) handles billing and customer service. Rebate programs are administered by your TDU (Transmission and Distribution Utility — Oncor, CenterPoint, AEP Texas, etc.). The TDU is who physically owns the wires delivering power to your home. To find your TDU, look at the delivery charge line on your electricity bill or enter your address at powertochoose.org. Contact your TDU’s efficiency programs office — not your REP — to ask about heat pump rebates.

Can I stack multiple utility rebates?

No — you’re in one TDU service territory. The TDU serving your address is fixed by geography; you can’t receive Oncor rebates if you’re in CenterPoint territory. If you’re in Austin Energy or CPS Energy territory (Austin city limits or San Antonio metro), those municipal programs are separate from the TDU structure and you deal only with the municipal utility. The rebate from your one applicable utility is the only utility rebate available to you.

What if I’m in a rural co-op territory?

Most Texas electric cooperatives do not currently offer heat pump rebates. If your electric bill comes from Pedernales Electric Cooperative, Bluebonnet Electric, Sam Houston Electric, or another co-op, you are not in an IOU or municipal utility territory. The federal 25C credit expired, SECO HEEHRA has not launched, and your co-op likely has no rebate program. As of mid-2026, there is currently no incentive stack available for most Texas co-op members planning a heat pump installation. When SECO launches the HEAR program, co-op members will be eligible just as IOU customers will — the HEEHRA income eligibility is not utility-territory-dependent. Check comptroller.texas.gov/programs/seco/ for launch updates.

What permits do I need for a heat pump installation in Texas?

A TDLR (Texas Department of Licensing and Regulation) Air Conditioning and Refrigeration contractor license is required for any HVAC installation in Texas — split systems cannot be DIY-installed legally under state licensing rules. In addition, most Texas municipalities require a mechanical building permit for HVAC replacement work, including mini-splits. Some smaller municipalities have streamlined permit processes; others require inspection. Confirm with your local building department. Non-permitted work can void manufacturer warranties and can disqualify you from utility rebate programs that require permit documentation during the verification process.