Austin Energy Heat Pump Rebates 2026: Best Incentives in Texas

Austin Energy offers approximately $3,000 for whole-home heat pump installations through the Power Saver program. The exact amount varies by system size and qualification level. Income-qualified customers may receive up to $4,000 or more through the enhanced rebate tier. Additional rebates include up to $800 for heat pump water heaters and $200 for duct sealing. These are the largest heat pump rebates of any utility in Texas.

Austin Energy partners with Velocity Credit Union to offer 0% APR financing for qualifying energy improvements, including heat pump installations. This financing is available exclusively to Austin Energy customers. You can finance the remaining cost after your rebate. For example, a $7,000 system minus $3,000 rebate leaves $4,000 to finance at 0% APR, which works out to approximately $170/month over 24 months. This is the best financing deal for heat pumps in Texas; no deregulated utility territory offers anything comparable.

Yes. Pre-approval is required before installation for Austin Energy Power Saver rebates. Contact Austin Energy to initiate the pre-approval process before hiring a contractor or purchasing equipment. Installing first and applying later may result in rebate denial. Austin Energy may require or recommend a home energy audit as part of the pre-approval process.

Austin Energy requires a minimum SEER2 16 and HSPF2 8.5 for heat pump rebate eligibility. The equipment must be ENERGY STAR certified or CEE Tier-qualified. This is higher than the DOE South Region minimum of SEER2 14.3, but the higher efficiency qualifies you for the rebate and provides better performance in Austin's cooling-dominant climate. Variable-speed compressor systems are recommended for optimal humidity control.

A typical 3-ton ducted heat pump in Austin costs approximately $7,057 installed. After the Austin Energy rebate of approximately $3,000, your net cost is around $4,057. If you use the 0% APR financing through Velocity Credit Union, that works out to roughly $170/month over 24 months. Income-qualified customers may pay even less with the enhanced rebate tier (up to $4,000+). The payback period in Austin is typically 3-4 years when replacing gas heating plus AC, thanks to the combination of large rebate and low electricity rate.

Austin Energy is a regulated, municipally owned utility. It is owned by the City of Austin and serves approximately 550,000 customers in Austin and surrounding areas. Unlike the roughly 85% of Texas that operates in the deregulated ERCOT market (where you choose your retail electric provider), Austin Energy is your one and only electricity provider. You cannot switch to a different company. The advantage is fixed, predictable rates (currently approximately $0.12/kWh) and significantly larger rebate programs than deregulated utilities offer.

Yes, when HEAR launches in Texas. The HEAR (Home Efficiency and Appliance Rebates) program is designed to be stackable with utility rebates. A low-income Austin Energy customer could theoretically combine approximately $3,000 from Austin Energy Power Saver with up to $8,000 from HEAR for $11,000 in total rebates. However, HEAR has NOT launched in Texas yet. SECO (State Energy Conservation Office) is still selecting a third-party program administrator. Plan your budget based on Austin Energy rebates available today, and treat HEAR as additional future savings.

Yes. Austin Energy offers up to $800 for ENERGY STAR certified heat pump water heaters (HPWH) through the Power Saver program. This stacks on top of the whole-home heat pump rebate. A HPWH uses 60-70% less energy than a conventional electric water heater. Combined with the heat pump rebate and duct sealing ($200), you could receive approximately $4,000 in total Austin Energy rebates for a comprehensive electrification project.

Austin Energy requires a participating contractor enrolled in the Power Saver program. Not every HVAC contractor in Austin qualifies. The contractor must be on Austin Energy's approved list AND hold a valid TDLR (Texas Department of Licensing and Regulation) HVAC license. Ask your contractor to confirm their Power Saver enrollment status before signing any agreement. Austin Energy can provide a list of participating contractors.

Austin Energy typically processes rebate applications within 6-8 weeks after receiving a complete submission. The rebate is issued as a check or bill credit. The full timeline from start to finish, including pre-approval, installation, and rebate receipt, is typically 10-16 weeks. Ensure your application includes all required documentation: contractor invoices, equipment specifications, permit records, and proof of Austin Energy account. Incomplete applications will delay processing.