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New Jersey offers three layers of heat pump rebates: NJ Whole Home up to $7,500, utility rebates (PSE&G $900, JCP&L up to $1,000, ACE $1,300), and HEAR federal rebates up to $8,000 (pending). The federal 25C tax credit expired December 31, 2025. Maximum stackable total: up to $16,400.
Federal 25C expired Dec 31, 2025. HEAR $183M allocated to NJ but not yet launched. Whole Home + your utility rebate are the primary incentives available today.
NJ heat pump rebates in 2026 have three layers: NJ Whole Home offers up to $7,500 based on your Total Energy Savings percentage. Your electric utility provides additional rebates: PSE&G $900 instant, JCP&L $500–$1,000 tiered, ACE up to $1,300, RECO up to $1,400. The federal 25C tax credit expired December 31, 2025 and provides $0 in 2026. Federal HEAR rebates ($183M for NJ) are pending launch. Whole Home + utility rebates are the active incentives today.
The NJ Clean Energy Whole Home program offers cash-back incentives based on your project’s projected Total Energy Savings (TES) percentage.
$2,000 + ($200 × (TES% − 5)) = Rebate
Base
$2,000
@ 5% TES
Per additional point
+$200
per % TES
Maximum
$7,500
@ 33% TES
0% Financing
$25,000
0% APR
| % TES | Rebate | Note |
|---|---|---|
| 5% | $2,000 | Minimum qualifying TES |
| 10% | $3,000 | Air sealing + HP install |
| 15% | $4,000 | Insulation + HP + duct sealing |
| 20% | $5,000 | Deep retrofit: insulation + HP + HPWH |
| 25% | $6,000 | Comprehensive envelope + HP |
| 33% | $7,500 | Maximum rebate (cap) |
Requirements: Home energy assessment by BPI-certified assessor and BPI-certified contractor for installation required. TES% is calculated during the assessment. 33%+ TES goal required for maximum rebate.
Four electric utilities serve New Jersey, each with their own rebate program. Your rebate depends on which utility serves your home.
| Utility | Territory | HP Rebate | LMI Adder | Financing | Avg. Rate | Valid Through |
|---|---|---|---|---|---|---|
| PSE&G | Northern & Central NJ (~2.3M customers) | Up to $900 instant | +$200/measure LMI | On-bill up to $75K | ~$0.26/kWh | June 2027 |
| JCP&L | Central & Western NJ (~1.1M customers) | $500–$1,000 tiered | None specified | N/A | ~$0.26/kWh | Ongoing |
| ACE | Southern NJ & Shore (~560K customers) | Up to $1,300 | +$200/measure LMI | N/A | ~$0.25/kWh | Ongoing |
| RECO | NW Corner of NJ (~73K customers) | Up to $1,400 | +$200 LMI | N/A | ~$0.27/kWh | Ongoing |
Northern & Central NJ (~2.3M customers)
Up to $900 instant
~$0.26/kWh
+$200/measure LMI
On-bill up to $75K
Central & Western NJ (~1.1M customers)
$500–$1,000 tiered
~$0.26/kWh
None specified
N/A
Southern NJ & Shore (~560K customers)
Up to $1,300
~$0.25/kWh
+$200/measure LMI
N/A
NW Corner of NJ (~73K customers)
Up to $1,400
~$0.27/kWh
+$200 LMI
N/A
Rates shown are approximate averages. Rebate amounts subject to change and funding availability. LMI = Low-to-Moderate Income.
JCP&L offers efficiency-based tiered rebates. Higher-efficiency systems earn bigger rebates.
| Tier | Amount | Efficiency Requirement | Best For |
|---|---|---|---|
| Tier 1 | $500 | SEER2 >= 15.2, HSPF2 >= 7.8 | Budget-friendly central HP |
| Tier 2 | $750 | SEER2 >= 17.1, HSPF2 >= 7.8 | High-efficiency ducted systems |
| Cold Climate | $1,000 | SEER2 >= 15.2, HSPF2 >= 8.1 | Northern NJ (Zone 5A) |
| Ductless Mini-Split | $750 | SEER2 >= 17.1, HSPF2 >= 7.8 | Older homes without ductwork |
Northern NJ Recommendation: If you live in JCP&L territory in Zone 5A (Morris, Sussex, Warren), the $1,000 cold-climate rebate is the best value. ccASHP models like Mitsubishi Hyper-Heat and Fujitsu XLTH maintain heating capacity down to -13 to -15°F.
Estimate your total Whole Home, utility, and HEAR rebates based on your situation.
Replaces central AC + gas furnace using existing ductwork. Most common for NJ gas-heated homes.
3 ton(s) (most NJ homes: 2-4 tons)
15% 5% minimum to qualify for Whole Home, caps at 33%
NJ Whole Home Program: $2,000 base at 5% total energy savings, plus $200 per additional point up to $7,500 at 33%. Also includes 0% interest $25,000 loan.
Estimates based on 2026 NJ rebate programs. Actual rebate and installation cost determined by your contractor and utility. Federal 25C tax credit expired Dec 31, 2025 — not included.
New Jersey received ~$183 million in IRA funding. Income-qualified households can receive up to $8,000 when the program launches. Stackable with Whole Home and utility rebates.
Status: Awaiting DOE approval and program administrator selection.
Allocation: ~$183M total — $91.3M HEAR + $91.6M HOMES.
Planned programs: M-RISE (multifamily) and CP-HEAR (electrification adder to Comfort Partners low-income program).
Warning: Do NOT count on HEAR funding for current projects. Plan based on Whole Home + utility rebates available today.
$8,000 max
Below 80% AMI
Up to $8,000 toward heat pump installation. Designed to cover majority of system cost. Stackable with Whole Home and utility rebates when the program launches.
$4,000 max
80–150% AMI
Up to $4,000 toward heat pump installation. Combined with Whole Home ($7,500) and utility rebates, could cover most of a standard system.
$0
Above 150% AMI
HEAR rebates are not available for households above 150% of area median income. NJ Whole Home and utility rebates still apply.
Two key residential tax credits expired. Here is the current status for NJ homeowners.
EXPIRED Dec 31, 2025. $0 for heat pumps in 2026.
Previously provided up to $2,000 for qualifying heat pump installations. Repealed by the One Big Beautiful Bill Act (OBBBA) signed July 4, 2025. No replacement credit enacted.
EXPIRED Dec 31, 2025. $0 for residential solar.
Does not apply to heat pumps. Included here because many NJ homeowners combine solar + heat pump projects. No residential solar tax credit available in 2026.
NJ has state income tax but does NOT offer a state-level heat pump tax credit as of 2026.
Combine all layers to maximize your NJ heat pump installation savings.
HEAR pending launch — do not count on these funds for current projects.
With JCP&L Cold Climate
$7,500 + $1,000
= $8,500
With ACE
$7,500 + $1,300
= $8,800
With RECO
$7,500 + $1,400
= $8,900
Seven steps from energy assessment to receiving your rebates. Typical timeline: 8–12 weeks start to finish.
Contact NJ Clean Energy or your utility to schedule a whole-home energy audit. A BPI-certified assessor will evaluate your home and calculate your projected Total Energy Savings (TES) percentage.
Obtain 2-3 quotes from NJ DCA-licensed HVAC contractors. For Whole Home program, the contractor must be BPI-certified. PSE&G requires purchasing through their Marketplace or approved contractor network.
Select ducted central, ductless mini-split, or hybrid based on your home. Northern NJ (Zone 5A): cold-climate model recommended. Shore areas: request coastal-rated outdoor unit for salt air protection.
Submit your Whole Home application through njcleanenergy.com with your energy assessment results and contractor scope of work. Approval typically takes 2–4 weeks.
Once approved, schedule your heat pump installation. NJ requires both HVAC and electrical permits. Your contractor handles permitting in most municipalities.
After installation, file your utility rebate separately. PSE&G: instant at point of sale. JCP&L: online application post-install. ACE: within 90 days of install. Keep all invoices and receipts.
Whole Home rebate processed in 4–6 weeks. Utility rebate processing varies: PSE&G is instant, JCP&L and ACE take 6–8 weeks. Total savings applied. 0% financing available for remainder through Whole Home program.
State regulations and program requirements that apply to all NJ heat pump installations.
NJ DCA HVAC License
All contractors must hold NJ DCA (Department of Community Affairs) HVAC license.
HVAC & Electrical Permits
NJ requires both permits for heat pump installations. Municipal inspections required.
Building Code: 2021 IBC/IRC
NJ adopted the Uniform Construction Code based on 2021 IBC/IRC.
Coastal Protection (Jersey Shore)
Outdoor units in coastal counties need corrosion-resistant coatings for salt air exposure.
BPI Certification (Whole Home)
NJ Whole Home requires BPI-certified assessor and contractor. Energy assessment required before installation.
ENERGY STAR Certification
PSE&G and ACE require ENERGY STAR-certified equipment. JCP&L requires efficiency thresholds per tier.
Timely Application
PSE&G: instant at point of sale. JCP&L: online application post-install. ACE: within 90 days. Keep all invoices and receipts.
Climate Zone (North vs. South)
Zone 5A (north): ccASHP models recommended. Zone 4A (south): standard models work well. Hybrid/dual-fuel popular in northern NJ.
New Jersey offers three layers of heat pump rebates in 2026: (1) NJ Whole Home program up to $7,500 based on Total Energy Savings percentage, (2) Utility rebates from PSE&G ($900), JCP&L ($500–$1,000), ACE ($1,300), or RECO ($1,400), and (3) HEAR federal rebates (pending — up to $8,000 for low-income when launched). The federal Section 25C tax credit expired December 31, 2025 and provides $0 in 2026. Maximum stackable total: up to $16,400 when HEAR launches.
No. The federal Section 25C Energy Efficient Home Improvement Credit expired on December 31, 2025 under the One Big Beautiful Bill Act (OBBBA) signed July 4, 2025. There is zero federal tax credit available for residential heat pump purchases in 2026. NJ Whole Home, utility rebates, and HEAR (when launched) are the remaining incentives. NJ has state income tax but no state-level heat pump tax credit.
NJ Whole Home is a state rebate program through NJ Clean Energy that provides cash-back incentives based on your projected Total Energy Savings (TES) percentage. The formula is: $2,000 base at 5% TES, plus $200 for each additional percentage point, capped at $7,500 at 33% TES. It requires a BPI-certified installer and energy assessment. The program also offers 0% interest financing up to $25,000 for the remaining balance. This is separate from and stackable with utility rebates.
Stack all three layers: (1) NJ Whole Home — up to $7,500 based on TES%, (2) Your utility rebate — PSE&G $900, JCP&L up to $1,000, ACE $1,300, or RECO $1,400, (3) HEAR (when launched) — $4,000 moderate-income or $8,000 low-income. Example: Whole Home $7,500 + PSE&G $900 + HEAR $4,000 (moderate) = $12,400 total. For low-income: $7,500 + $900 + $8,000 = $16,400. Apply for Whole Home and utility rebate now. HEAR will be additional when it launches.
HEAR has NOT launched in New Jersey as of February 2026. NJ received approximately $183 million in IRA funding ($91.3M HEAR + $91.6M HOMES). The state is awaiting DOE approval and program administrator selection. Planned programs include M-RISE (multifamily) and CP-HEAR (electrification adder to Comfort Partners low-income program). NJ is among the last Northeast states to launch HEAR. Do NOT count on HEAR funding for current projects — plan based on Whole Home + utility rebates available today.
PSE&G offers up to $900 in instant rebates on qualifying air-source heat pumps, ductless mini-splits, and heat pump water heaters through the PSE&G Residential Marketplace. Additional $200 per measure is available for LMI (low-to-moderate income) households. PSE&G also provides on-bill repayment financing up to $75,000 total ($50,000 for decarbonization measures). The program is valid January 1, 2025 through June 30, 2027. Rebates are applied as instant discounts at point of sale — no waiting for reimbursement.
JCP&L (FirstEnergy) uses an efficiency-based tiered rebate system through EnergySaveNJ: Tier 1 is $500 for SEER2 >= 15.2 and HSPF2 >= 7.8. Tier 2 is $750 for SEER2 >= 17.1 and HSPF2 >= 7.8. Cold Climate heat pumps earn $1,000 for SEER2 >= 15.2 and HSPF2 >= 8.1. Ductless mini-splits earn $750 for SEER2 >= 17.1 and HSPF2 >= 7.8. Higher-efficiency systems earn bigger rebates. For northern NJ in JCP&L territory, cold-climate models ($1,000) are recommended for Zone 5A winters.
Atlantic City Electric (ACE) offers up to $1,300 for qualifying HVAC equipment including central heat pumps ($300–$600), heat pump water heaters ($400–$700), and an additional $200 per measure for LMI customers. RECO (Rockland Electric, serving a small area in Bergen/Passaic counties) offers up to $1,400 for qualifying heat pump equipment. Both require ENERGY STAR-certified equipment and NJ DCA-licensed contractor installation. ACE applications must be submitted within 90 days of installation.
Yes. All heat pump installations in NJ require a contractor with an NJ DCA (Department of Community Affairs) HVAC license. For the NJ Whole Home program, the contractor must also be BPI-certified. PSE&G requires purchasing through their Marketplace or approved contractor network for instant rebates. Both HVAC and electrical permits are required in most NJ municipalities. Municipal inspections are required after installation.
It depends on where you live in NJ. Northern NJ (IECC Zone 5A — Bergen, Passaic, Morris, Sussex, Warren counties) has winter design temperatures of 5–10°F, and cold-climate models (ccASHP) are strongly recommended. Popular choices include Mitsubishi Hyper-Heat H2i and Fujitsu Halcyon XLTH which maintain rated heating capacity down to -13°F to -15°F. Southern NJ (Zone 4A — Camden, Atlantic City, Cape May) has milder winters (12–15°F design temp) where standard models work well. JCP&L offers the highest rebate ($1,000) for cold-climate units.
A typical ducted central heat pump in NJ costs $12,000–$22,000 installed. After rebates: With Whole Home at max ($7,500) + PSE&G ($900) = $8,400 off, so net $3,600–$13,600. With JCP&L cold-climate ($1,000) + Whole Home ($7,500) = $8,500 off, so net $3,500–$13,500. When HEAR launches for low-income: add $8,000 more, potentially covering most or all of the cost. Ductless single-zone systems cost $3,500–$7,000 and could be nearly free with stacked rebates for income-qualified households.
Yes. The NJ Whole Home program offers 0% interest financing up to $25,000 for the remaining balance after rebates. PSE&G also offers on-bill repayment financing up to $75,000 total ($50,000 for decarbonization measures). These financing options significantly reduce the upfront cost barrier. For example, if your $15,000 system receives $8,400 in rebates, you could finance the remaining $6,600 at 0% through Whole Home.
New Jersey Hub
All NJ heat pump resources
NJ Heat Pump Cost 2026
Full pricing by metro and type
Choosing a NJ Installer
DCA licensing & BPI certification guide
PSE&G Heat Pump Rebates
$900 instant + on-bill financing
JCP&L Heat Pump Rebates
Tiered system $500–$1,000
Heat Pump Calculator
Size your system accurately
Last updated: February 2026. Rebate amounts, eligibility, and program details are subject to change and funding availability. HEAR rebates are pending program launch and not yet available. Contact your utility or NuWatt Energy for the most current information.
NuWatt Energy helps NJ homeowners maximize Whole Home rebates, navigate utility programs, and complete all rebate paperwork. NJ DCA-licensed and BPI-certified contractors.
NJ DCA Licensed • BPI Certified • NABCEP Certified • 15+ Years Experience