Federal ENERGY STAR rebates worth $2,000 to $14,000 are available right now through two Inflation Reduction Act programs: HEAR (Home Electrification and Appliance Rebates) for specific equipment, and HOMES (Home Owner Managing Energy Savings) for whole-house efficiency projects. Unlike the Section 25C tax credit that expired in December 2025, these rebates reduce your purchase price on the spot.
The catch: every state runs its own version of these programs, and the rollout is staggered. Some states have been processing applications since 2024. Others won’t open until mid-2026. And the money is first-come, first-served from a fixed federal allocation.
How These Rebates Actually Work
HEAR and HOMES both function as point-of-sale discounts. The contractor handles the rebate paperwork, the program reimburses the contractor, and you pay the reduced price. A qualifying household buying an $8,000 heat pump with a full HEAR rebate pays $0 for the equipment.
That might sound like the old 25C tax credit, but the mechanics are completely different. The 25C energy efficiency credit required you to pay the full price, wait until tax season, then claim a nonrefundable credit. “Nonrefundable” was the painful part: if your federal tax liability was $4,000 and the credit was $6,000, you got $4,000 back and lost the rest. Point-of-sale rebates sidestep that problem. The discount happens at purchase regardless of your tax situation, making these programs far more useful for cash-constrained households than any prior federal energy incentive.
HEAR: Equipment-Specific Rebates
HEAR assigns a dollar cap to each appliance category. The combined household limit across all categories is $14,000.
| Upgrade | Maximum Rebate |
|---|---|
| Heat pump (space heating/cooling) | $8,000 |
| Electrical panel upgrade | $4,000 |
| Electrical wiring | $2,500 |
| Heat pump water heater | $1,750 |
| Insulation, air sealing, ventilation | $1,600 |
| Heat pump clothes dryer | $840 |
| Electric stove, cooktop, range, or oven | $840 |
Income determines what percentage of each cap you receive. Households below 80% AMI get up to 100% of project costs, subject to the per-item caps above. At 80%–150% AMI, that drops to 50% of costs with the same per-item caps. Above 150% AMI, HEAR is off the table entirely. The combined household maximum across all categories is $14,000 regardless of income tier.
“AMI” is area median income, and it varies wildly by county. In San Francisco, 150% AMI for a family of four exceeds $200,000. In lower-cost rural areas, the number can be a fraction of that. Before you assume you earn too much, run the county-specific eligibility checker on your state program portal. The results surprise people in both directions.
One timing wrinkle: the income check uses your household’s gross income from the most recent tax year, not what you earn right now. A mid-year job loss or pay cut won’t change your bracket until the following year’s filing.
HOMES: Whole-House Performance Rebates
HOMES pays based on measured results, not what equipment you bought. If your project achieves verified energy savings of 20% or more (confirmed through DOE-approved modeling software or measured utility bills), the program writes a check.
| Energy Savings Level | Standard Rebate | Low-Income Rebate (below 80% AMI) |
|---|---|---|
| 20–35% modeled savings | $2,000 or 50% of costs (whichever is less) | $4,000 or 80% of costs |
| Over 35% modeled savings | $4,000 or 50% of costs | $8,000 or 80% of costs |
Any homeowner can access the $2,000–$4,000 base tiers regardless of income, as long as the project hits the savings target. Below 80% AMI, the amounts double and the cost-coverage cap jumps from 50% to 80%.
Reaching 20% energy savings usually means bundling air sealing, insulation, and HVAC work. A home energy audit identifies which combination gets you over the threshold for your specific house. If window replacement is part of the plan, the full window replacement cost breakdown helps estimate whether that upgrade alone clears the bar or needs pairing with envelope improvements.
The honest assessment of HOMES: the rebate dollars look modest against actual project costs. A whole-house retrofit that achieves 20%+ savings typically runs well into five figures. A $2,000 rebate on a $15,000 project covers 13%. But the real value of HOMES is the modeling process. The assessor’s software ranks every possible upgrade by savings per dollar, and that ranking often reveals that $800 in air sealing outperforms a $4,000 insulation job. Homeowners who skip the assessment and jump straight to a heat pump routinely miss cheaper envelope fixes that would have delivered more savings per dollar.
Stacking Rebates With Other Incentives
HEAR and HOMES can both apply to the same project, but not to the same piece of equipment. A practical split:
- HEAR for the heat pump (up to $8,000 at the below-80% tier)
- HEAR for the electrical panel if you need a service upgrade ($4,000 cap)
- HOMES for the insulation and air sealing (tied to verified savings percentage)
- Utility rebates and state incentives layered on top of both
A realistic scenario: you install a heat pump for $12,000. HEAR provides $6,000 (50% at the 80–150% AMI tier). Your utility offers a separate $1,500 rebate. Out of pocket: $4,500. If a federal tax credit applies in the future, it calculates on that $4,500 reduced basis, not the original $12,000 — Treasury guidance treats these rebates as nontaxable purchase-price reductions.
One hard ceiling: total incentives from all sources combined cannot exceed the actual project cost. Nobody gets paid to install a heat pump. But between HEAR, HOMES, utility programs, and any remaining state credits, projects at the lower income tiers can sometimes reach near-zero out-of-pocket cost.
Check the current landscape on the federal tax credit side too, since the 25C energy efficiency credit and 25D residential clean energy credit have both changed. The federal tax credit overview has the full picture.
The Contractor Enrollment Problem
This is where more applications die than at the income verification stage.
States require the work to be done by a contractor enrolled in the rebate program. The reimbursement paperwork flows through that contractor. Getting a quote from a non-enrolled installer, having the work done, and then discovering the problem means forfeiting the rebate. Full stop. No retroactive fix.
Your state energy office publishes the enrolled contractor list. Get that list before you get quotes.
The pre-approval trap is equally dangerous. Some states reimburse after installation; others require written authorization before work starts. Projects that begin without pre-approval are disqualified even if the equipment and contractor both qualify. Before signing any contract, check your state’s program page for “pre-approval required” language.
HOMES adds another gate: a certified energy assessor must run DOE-approved modeling software on your home before any work begins. This is essentially a professional energy audit . Some states fold the assessment fee into the HOMES program, so ask before paying separately.
What “ENERGY STAR Certified” Means for Each Category
ENERGY STAR certification is required under both programs, but the definition shifts by product category.
Heat pumps must carry ENERGY STAR certification for your climate zone. Cold-climate models have separate performance specs, and some states set efficiency floors above the national ENERGY STAR minimum. A unit that qualifies in Georgia may not qualify in Minnesota. Water heaters need the ENERGY STAR label and must meet Uniform Energy Factor thresholds that vary by tank size.
For dryers, ENERGY STAR means heat pump technology specifically. Conventional electric resistance dryers do not qualify. Electric stoves need standard ENERGY STAR certification.
Insulation is different: no ENERGY STAR label exists for insulation materials. The work must meet state-defined performance standards verified through pre- and post-installation blower door testing. Some states maintain qualified product lists narrower than the national database, so check your state’s approved list before buying materials.
Funding: How Much Is Left
The Inflation Reduction Act allocated $8.8 billion across both programs — $4.3 billion for HOMES, $4.5 billion for HEAR. Each state received a formula-based share, and once that share runs out, no additional federal funding is guaranteed.
States that launched early (2024–2025) have reported strong demand and could exhaust their allocations well before late-launch states even open. If your state has not opened yet, the full allocation is untouched. The risk arrives after launch: first-come, first-served until gone. Funds are available through September 30, 2031 at the latest.
Separately, the Weatherization Assistance Program covers free upgrades up to $8,497 per home for households below 200% of the federal poverty level. WAP runs on its own funding and timeline. Households qualifying for both WAP and HEAR/HOMES can use them on different improvements in the same house, but duplicate funding for the same upgrade is not allowed.
Where to Start
Skip the appliance shopping. Start with an energy assessment .
The common mistake is picking a heat pump first and working backward through eligibility. An assessor running DOE software ranks every possible upgrade by energy savings per dollar, and that ranking determines which program covers more, which measures to assign to HEAR versus HOMES, and whether bundling envelope work unlocks the higher HOMES tier.
After the assessment: verify your AMI bracket on your state portal, get quotes exclusively from enrolled contractors, and confirm whether your state requires pre-approval before work starts. Program status by state is at the DOE Energy Savings Hub and the ENERGY STAR Rebate Finder .