HOMES vs HEAR Rebates: Which One Pays You More in 2025?

Start Here: What These Rebates Actually Do

If you’re planning an HVAC upgrade, two Inflation Reduction Act programs can lower your bill: HOMES (Home Efficiency Rebates) and HEAR (Home Electrification and Appliance Rebates). Both are real, federally funded, and administered by state energy offices. But they work differently. Think of HOMES as whole-home performance you’re rewarded for measured energy savings after multiple improvements. HEAR is an appliance-first you get point-of-sale discounts on specific electrification gear like a heat pump or heat-pump water heater.

Here’s the decision in one line: if you’re income-eligible and planning a heat pump, HEAR typically puts more money in your pocket upfront. If your income is too high for HEAR or you’re doing a deeper, multi-measure retrofit, HOMES can still pay well, especially when your project hits bigger energy-savings thresholds. We’ll break down amounts, eligibility, and real-world scenarios so you can pick the path that fits your home, budget, and timeline.

HOMES in Plain English: How It Works

HOMES is performance-based. Instead of paying for a specific piece of equipment, the rebate scales with how much energy your home will save after the project. Key points:

• No income limit any homeowner can apply.
  
  

• Energy assessment required to establish your baseline and projected savings.

• Minimum 20% savings to qualify; more savings = larger rebate tiers.

• Rebates vary by income and savings (we’ll show ranges below).

• Some states allow retroactive rebates if your project recently finished.

This structure nudges you to plan a package: air sealing, insulation, duct improvements, plus efficient HVAC. It’s a great fit if you’re already considering a whole-home tune-up. The flip side: it’s more paperwork and takes longer. If you want a quick heat-pump discount at checkout, HOMES won’t do that. But if your goal is to cut your energy use across the board, HOMES can be the bigger long-term win.

HEAR in Plain English: How It Works

HEAR is appliance-focused and income-restricted. If your household income is below 150% of Area Median Income (AMI), you may qualify for instant, point-of-sale rebates on specific electrification equipment most notably heat pumps for space heating and cooling, plus heat-pump water heaters. Highlights:

• No energy assessment needed.

• Discounts come at purchase/installation, reducing cash outlay.

• Eligible measures are specific (primarily electric heat pumps and related wiring/panel upgrades).

• Not retroactive you must claim at the time of purchase.

• Often geared toward replacing non-electric systems with electric.

For many households under the income cap, HEAR is the simplest, fastest way to bring down project costs. If you qualify and you’re switching to a heat pump, HEAR is likely the first lever to pull then we’ll look at what else you can stack (tax credits, utility rebates) without running afoul of program rules.

Show Me the Money: Side-by-Side HVAC Payouts

HEAR (income-restricted)

• Heat pump: up to $8,000.

• <80% AMI: up to 100% of project costs (capped by measure limits).

• 80–150% AMI: up to 50% of project costs.

• Total household cap: typically $14,000 (including panel/wiring/insulation add-ons).

HOMES (no income cap, performance-based)

• 20–34% energy savings:

• <80% AMI: lesser of $4,000 or 80% of project cost.

• >80% AMI: less than $2,000 or 50% of cost.

• 35%+ energy savings:

• <80% AMI: lesser of $8,000 or 80% of cost.

• >80% AMI: lesser of $4,000 or 50% of cost.

• Some states boost caps further (example: higher maximums for deep-savings projects).

Bottom line: If you qualify by income and you’re installing a heat pump, HEAR often pays more, faster. If you don’t qualify or you’re bundling multiple upgrades for big savings HOMES can be competitive.

Eligibility Checklist: Do You Qualify Today?

Quick self-check before you call a contractor:

1. Household income:

• ≤150% AMI? You might be HEAR-eligible.

• >150% AMI? Look to HOMES.

2. Project scope:

• Single appliance (heat pump/HPWH)? HEAR fits.

• Whole-home performance plan? HOMES fits.

3. Assessment:

• HOMES requires an energy assessment; HEAR does not.

4. Timing:

• HEAR is point-of-sale; HOMES funds after savings are documented.

5. Fuel switch:

• HEAR often requires moving from non-electric to electric.

6. State rollout:

• Availability and exact amounts vary by state and administrator.

Need help matching equipment to your plan? Browse efficient R-32 heat pump systems and ductless mini-splits to right-size before you buy.

Real-World Scenarios (What Pros Actually See)

Scenario A: Low income, aging gas furnace + window ACs

• Goal: replace it with an efficient cold-climate heat pump.

• Likely path: HEAR for up to $8,000 at purchase, plus wiring/panel help if needed. Stack a federal tax credit and any utility rebate.

Scenario B: Moderate income, drafty home, high bills

• Goal: comfort + cost control.

• Likely path: Bundle air sealing, insulation, duct fixes, and a heat pump. If income-eligible, HEAR for the heat pump; otherwise pursue HOMES targeting 35%+ savings.

Scenario C: High income, whole-home modernization

• Goal: long-term efficiency and property value.

• Likely path: HOMES with a performance plan. Combine with tax credits and utility rebates.

For equipment ideas, compare air handlers or get a Design Center consult.

Stacking Incentives Without Breaking the Rules

You can’t claim HOMES and HEAR on the same measure (e.g., the same heat pump), but you can use them on different parts of a project. Smart stack examples:

• HEAR for the heat pump, then add federal tax credits (subject to limits) and utility rebates for other measures.

• HOMES for a whole-home package (air sealing, insulation, ducts) and separate utility rebates for a water heater.

Tips that keep applications clean:

• Keep clear invoices per measure.

• Make sure your contractor codes each line item correctly.

• Confirm with your state program admin which combinations are allowed.

Need help budgeting? Check HVAC financing options like line sets and thermostats you may need for a qualifying install.

Timing, Paperwork, and What to Expect

HEAR is the quick hit: if you’re income-eligible, expect instant discounts when you buy/contract the install (rules vary by state). Keep proof of income handy, and be prepared to show you’re electrifying (switching from non-electric).

HOMES takes more steps: schedule an energy assessment, settle on a scope that achieves at least 20% savings, complete work, then submit documentation showing your projected (or measured) savings. The payback can be worth it especially once you cross the 35%+ threshold.

Both programs are rolling out state by state, so timelines and portals differ. If you’re unsure which paperwork you’ll need, check our Help Center to understand equipment and installation steps before you apply.

Choosing Equipment That Actually Qualifies

For HEAR, focus on high-efficiency heat pumps that meet your state’s eligibility list. If your panel is undersized or wiring is dated, budget for panel/wiring upgrades—many states include separate rebate caps for those. For HOMES, design a package: air sealing + insulation + the right-sized heat pump usually unlocks better savings modeling.

Shopping pointers from the field:

• Match capacity using the Sizing Guide (don’t oversize).

• Consider R-32 mini-splits for low GWP refrigerant and strong efficiency.

• If you manage units in hotels or multifamily, compare PTAC heat pumps.

When in doubt, ask for AHRI certificates and the exact model numbers you’ll submit with your rebate.

Common Mistakes (and How to Avoid Them)

• Mixing measures across programs: Don’t claim the same heat pump under both HOMES and HEAR. Split measures cleanly.

• Skipping the assessment (HOMES): You’ll need it to prove 20%+ savings. Book it early to avoid delays.

• Overlooking panel/wiring: If you’re electrifying, check your service panel and circuits HEAR may help cover upgrades.

• Wrong equipment size: Oversized systems short-cycle and underperform. Use the Sizing Guide and confirm with load calculations.

• Assuming one brand fits all: Layout, climate, and duct condition matter. Compare wall-mounted mini-splits based on your rooms.

• Missing deadlines: HEAR isn’t retroactive; HOMES has documentation windows. Keep a simple calendar checklist.

For help comparing models, browse our R-32 heat pump lineup.

HVAC Rebate Tips

• If you qualify by income and plan a heat pump, start with HEAR. Add tax credits and utility rebates.

• If you’re above 150% AMI or want a full upgrade package, target HOMES. Design for 35%+ savings if possible.

• Keep paperwork clean: separate invoices for each measure; save model numbers and AHRI certificates.

• Plan electrical early if you’re electrifying; HEAR may help with panel/wiring.

• Right-size equipment and verify duct condition to hit the performance targets your rebate assumes.

• Check state specifics before you buy amounts and rollouts vary.

• Ready to compare? Start at The Furnace Outlet and shortlist models that meet your state’s rebate specs.