A typical 3-ton central heat pump installation in the Greater Eastside costs $11,500 to $17,500 before incentives. After stacking PSE rebates, federal tax credits, and (for qualifying households) the Washington HEEHRA income-qualified rebate program, the net cost frequently lands between $5,500 and $11,000 — a reduction of 30 to 50 percent. The combination of incentives available in 2026 is the most generous Washington homeowners have ever seen, and it will not last forever. This guide covers every program currently available, what you actually qualify for, and the order in which you should claim each.
Rebate programs change. The information below reflects program design as of May 2026 and reflects the current PSE rebate schedule, the federal Inflation Reduction Act Section 25C credit (effective through 2032), and the Washington HEEHRA program rollout. Specific dollar amounts and eligibility thresholds can shift; we verify current rebate amounts against the published PSE and federal program documents on every quote we write.
The Four Programs You Need to Know
Heat pump incentives for Washington homeowners come from four distinct sources, each with its own eligibility criteria, its own claiming process, and its own dollar amount. They stack — most homeowners qualify for more than one, and many qualify for all four.
1. PSE rebates (utility incentive)
Puget Sound Energy offers direct rebates to residential customers for qualifying heat pump installations. These are utility-issued cash rebates, mailed as a check (or applied as a bill credit) after the installation is complete and the paperwork is submitted. Rebate amounts depend on the equipment efficiency tier and the system type.
As of 2026, typical PSE heat pump rebate amounts are: $800 to $1,200 for a standard-efficiency ducted central heat pump; $1,200 to $1,800 for a high-efficiency variable-speed or cold-climate inverter heat pump; $400 to $800 per outdoor unit for ductless mini-split installations, with multi-zone systems eligible per outdoor compressor. Geothermal heat pumps qualify for higher rebates, typically $1,500 to $2,500, though geothermal is uncommon on the Eastside.
2. Federal IRA Section 25C tax credit
The Inflation Reduction Act Section 25C Energy Efficient Home Improvement Credit covers 30 percent of qualifying heat pump installation cost, capped at $2,000 per year for heat pump and biomass equipment. The credit is claimed on your federal income tax return for the year of installation (Form 5695) and reduces your federal tax liability directly. It is non-refundable, meaning it can reduce your tax owed to zero but cannot generate a refund beyond what you owed.
To qualify, the heat pump must meet the highest efficiency tier defined by the Consortium for Energy Efficiency. Most modern variable-speed and cold-climate heat pumps from major manufacturers qualify; we provide the AHRI certificate and manufacturer documentation required to substantiate the claim. The credit was extended through 2032 under current law.
3. Washington HEEHRA (income-qualified)
The Home Electrification and Appliance Rebate Act (HEEHRA), administered in Washington through the Department of Commerce, provides direct rebates of up to $8,000 for qualifying heat pump installations for households at or below 150% of the Area Median Income. For households below 80% AMI, the rebate covers 100% of installation cost up to the cap. For households between 80% and 150% AMI, the rebate covers 50% of installation cost up to the cap.
HEEHRA in Washington began rolling out in late 2024 and continued expanding through 2025 and 2026. As of May 2026, the program is accepting applications through approved contractors. We are a participating contractor; we can run preliminary eligibility analysis and file the application on your behalf as part of the installation process.
4. Washington state programs and local additional incentives
Beyond PSE rebates and the federal credit, Washington state operates several smaller programs that occasionally apply: the Washington Clean Energy Fund for income-qualified households (separate from HEEHRA), Snohomish County PUD rebates for the small portion of our Bothell service area in Snohomish County, and various manufacturer rebates that Mitsubishi, Daikin, and Carrier offer seasonally on their premium product lines. These rebates are smaller in dollar value than the three primary programs above but can add $200 to $800 when applicable.
Putting the Stacking Math Together
For an average non-income-qualified Eastside household, the typical stacked-incentive math on a $14,000 central heat pump installation looks roughly like this:
| Incentive | Typical amount |
|---|---|
| PSE high-efficiency heat pump rebate | $1,500 |
| Federal IRA Section 25C tax credit (30%, capped at $2,000) | $2,000 |
| Manufacturer rebate (seasonal, when applicable) | $500 |
| Total non-income-qualified stacked incentive | $4,000 |
| Net installed cost | $10,000 |
For an income-qualified household under HEEHRA, the math changes substantially:
| Incentive (income-qualified scenario) | Typical amount |
|---|---|
| HEEHRA rebate (50% to 100% of installation, capped at $8,000) | $7,000 to $8,000 |
| PSE high-efficiency heat pump rebate | $1,500 |
| Federal IRA Section 25C tax credit | $2,000 |
| Total income-qualified stacked incentive | $10,500 to $11,500 |
| Net installed cost | $2,500 to $3,500 |
Important note on HEEHRA stacking
HEEHRA rules generally allow stacking with the federal Section 25C tax credit, but the rebate reduces the cost basis for the tax credit calculation. In practice this means that if HEEHRA covers $7,000 of a $14,000 installation, the federal credit is calculated against the remaining $7,000 (yielding $2,000 capped, since 30% of $7,000 exceeds $2,000). PSE rebates do not typically affect the tax credit cost basis. We work through this math with you specifically for your project and your income situation as part of the quote process.
What Equipment Qualifies
The PSE rebate, the federal Section 25C credit, and the HEEHRA program all reference the same efficiency tier definitions, with minor variations. The core threshold is whether the equipment qualifies under the Consortium for Energy Efficiency (CEE) Tier 1 or Tier 2 specifications.
Ducted central heat pumps
The minimum efficiency thresholds for the rebate-qualifying tier are typically: SEER2 of 15.2 or higher (cooling efficiency); HSPF2 of 7.8 or higher (heating efficiency); and EER2 of 11.7 or higher (peak cooling efficiency). The premium tier (typically eligible for the higher PSE rebate amount) raises these thresholds to SEER2 16+ and HSPF2 9+.
Most variable-speed inverter heat pumps from Carrier, Trane, Lennox, Mitsubishi, Daikin, and Bosch meet these thresholds. Single-stage standard-efficiency heat pumps frequently do not. We verify AHRI certified ratings on every quote and confirm qualification before installation.
Ductless mini-split heat pumps
Ductless systems use different efficiency metrics — typically SEER2, HSPF2, and EER2 measured on the system as a whole (outdoor unit plus connected indoor heads). Most cold-climate inverter mini-splits (Mitsubishi Hyper-Heat H2i, Daikin Aurora, Fujitsu Halcyon) qualify for the higher rebate tier. Standard mini-splits without cold-climate ratings frequently qualify for the lower rebate tier.
Heat pump water heaters (separate program)
Heat pump water heaters are eligible for separate rebates under both the PSE program and the federal IRA Section 25C credit. The federal credit is $2,000 per year, shared with the heat pump credit cap. PSE offers $600 to $800 in rebates for qualifying heat pump water heater installations. HEEHRA also covers heat pump water heater installations for income-qualified households, with a separate cap.
How the Paperwork Actually Works
The three primary rebate programs have different filing processes. We handle all of it on your behalf as part of every installation; the description below explains what is happening behind the scenes.
PSE rebate filing
After installation, we submit the PSE rebate application along with the AHRI certificate, manufacturer model and serial numbers, installation invoice, and a copy of the issued electrical and mechanical permits. PSE typically processes the rebate within 6 to 12 weeks and issues the rebate as a check (or as a bill credit at your option) directly to you. We do not see the rebate funds; they go directly to the customer.
Federal Section 25C tax credit
The federal credit is claimed by you on Form 5695 of your federal income tax return for the year of installation. We provide the documentation package needed to substantiate the claim — AHRI certificate, manufacturer documentation showing CEE Tier qualification, and a copy of the installation invoice — within two weeks of project completion. The credit reduces your federal tax liability for that year by up to $2,000.
HEEHRA application (income-qualified only)
HEEHRA requires income verification before the rebate is approved, which is the most paperwork-intensive part of any of these programs. We run a preliminary eligibility check before the quote is finalized, and if you qualify, we coordinate the formal application through the Washington Department of Commerce processing system. The income documentation typically includes recent tax returns, recent pay stubs, and a household composition declaration. HEEHRA rebates are applied at the point of sale (the rebate reduces what you pay us, rather than being a back-end check) once the eligibility is approved.
Timing Considerations for 2026
Several timing factors are worth considering in 2026 specifically:
- Federal credit deadline. The IRA Section 25C credit applies to equipment placed in service during the tax year. For 2026 returns, the equipment must be installed and operational by December 31, 2026.
- PSE rebate funding cycles. PSE allocates rebate funds annually. Late-year applications sometimes face budget exhaustion on specific incentive tiers. The safest claiming window is January through October.
- HEEHRA program funding. HEEHRA is funded through federal allocation to Washington state and is subject to annual funding limits. As of mid-2026, Washington still has funds available, but the program is expected to allocate fully before the federal authorization expires.
- Installation lead times in cold months. Heat pump replacement demand spikes when heating systems fail in December and January, which can push installation lead times to 4 to 6 weeks. Planning ahead for a fall installation captures the same rebate dollars without the schedule pressure.
Common Misunderstandings
Three misunderstandings come up often enough to address directly.
"The tax credit is a check from the government"
No. The federal Section 25C credit reduces your federal income tax liability. If you owed $5,000 in federal tax for the year and qualify for a $2,000 credit, your net tax owed drops to $3,000. If you owed $1,500 in federal tax, the credit can reduce that to zero but does not generate a refund of the difference. Households with low federal tax liability sometimes benefit less from the credit than the headline number suggests. HEEHRA, by contrast, is a direct rebate that you receive regardless of your tax situation.
"PSE will charge me less on my power bill"
Heat pumps generally cost more in electricity per month than gas furnaces cost in gas per month at current rates, but they also produce significantly more delivered heat per dollar than electric resistance heating, and they handle cooling that gas furnaces cannot provide at all. The economic case is usually positive when compared to electric baseboard or electric resistance heating, and roughly neutral when compared to a modern high-efficiency gas furnace, before rebates. After rebates, heat pumps are usually the better economic choice on a 15-year horizon.
"All heat pumps qualify for all rebates"
No. The rebate-qualifying tiers require specific efficiency ratings, and not every heat pump on the market meets them. Older single-stage standard-efficiency equipment and some entry-level mini-splits do not qualify. We verify rebate qualification against the published programs on every quote and let you know explicitly which incentives apply to your specific equipment selection.
How to Start
The rebate process is part of the installation process, not a separate step. When you call us for a heat pump quote, we walk through your specific situation: income qualification status (relevant for HEEHRA), existing equipment, home size and ductwork condition, and the right equipment recommendation. The quote we provide includes the gross installed cost, the specific incentives that apply, and the net installed cost after the incentives we file on your behalf.
Call our 24/7 dispatch line at 425-900-3610 to schedule a free in-home heat pump evaluation, or send your project details through the contact form. For more on heat pump installation generally, see our heat pump installation service page.