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Texas requires TDLR-licensed HVAC contractors for all heat pump installations. Many utility rebate programs require approved contractors or project pre-approval. Manual J load calculations are mandatory for proper sizing. This guide gives you a 10-point checklist to vet any TX heat pump contractor before you sign.
Quick Answer: TDLR License Is Non-Negotiable
Your installer must hold a Class A or Class B HVAC license from the Texas Department of Licensing and Regulation (TDLR). Verify at tdlr.texas.gov before signing anything. Many utility rebate programs also require approved contractors or project pre-approval. A Manual J load calculation is mandatory for proper sizing, especially in humid regions where oversizing destroys dehumidification.
The Texas Department of Licensing and Regulation (TDLR) oversees all HVAC contractor licensing in the state. Unlike northeastern states that have statewide installer networks (such as Connecticut’s HPIN), Texas relies on individual contractor licensing. This means the burden of verification falls on you, the homeowner.
There are two license classes relevant to residential heat pump installation:
Texas Dept. of Licensing and Regulation
Unlimited HVAC license. Holder can install, service, and maintain heating, cooling, and refrigeration systems of any capacity. Required for large or complex residential projects.
Texas Dept. of Licensing and Regulation
Limited to systems under 25 tons of cooling capacity. Sufficient for most residential heat pump installations (typical homes need 2-5 tons). Verify capacity limits match your project needs.
US Environmental Protection Agency
Federal requirement for anyone who handles refrigerants. The technician performing your installation must hold this certification. Non-compliance is a federal violation with fines up to $44,539 per day.
Insurance carrier
Texas does not require all employers to carry workers compensation. This means you should explicitly verify coverage. Without it, you could be liable if a worker is injured on your property. Request a certificate of insurance before work begins.
How to verify licenses: Visit the TDLR license search tool at tdlr.texas.gov and search by contractor name, company name, or license number. The result shows license class, issue date, expiration date, and any disciplinary actions. If the license does not appear, is expired, or has been suspended, do not proceed with that contractor.
Key difference from NE states: Texas does not have a statewide installer network like Connecticut’s HPIN or Rhode Island’s Clean Heat RI. In NE states, the installer network controls access to rebates directly. In Texas, rebate access is managed by individual utilities with varying contractor requirements. This means you need to check both TDLR licensing and your specific utility’s contractor rules.
Texas has a deregulated electricity market, which means different utilities have different rebate programs and contractor requirements. Here are the four largest utility programs.
Dallas-Fort Worth, North & Central Texas
Contractor Requirement
Must use a contractor listed in the Oncor approved rebate program
Rebate Range
$300-$500 for qualifying high-efficiency systems
Smart Thermostat
DOE-listed smart thermostat required for rebate; separate $75 thermostat rebate available
Notes
Oncor serves the transmission and distribution, but your retail electric provider (REP) sends your bill. The rebate comes through Oncor regardless of your REP.
City of Austin service area
Contractor Requirement
Must use an Austin Energy approved contractor; project pre-approval required before installation
Rebate Range
$300-$1,200 depending on system efficiency (SEER2 rating)
Smart Thermostat
Smart thermostat required; $125 rebate available for qualifying models
Notes
Austin Energy is a municipal utility with some of the strongest rebate programs in Texas. Pre-approval is mandatory. Do not start work before receiving written approval.
San Antonio metro area
Contractor Requirement
Pre-qualification through the CPS STEP (Save for Tomorrow Energy Plan) program
Rebate Range
$400-$800 for qualifying systems through STEP
Smart Thermostat
Smart thermostat recommended; $100 rebate available through separate thermostat program
Notes
CPS Energy is the nation's largest municipally owned energy utility. Their STEP program has specific efficiency requirements that your contractor should understand.
Houston metro, parts of East and South Texas
Contractor Requirement
No specific contractor requirement, but must meet program participation guidelines
Rebate Range
$200-$400 for qualifying equipment
Smart Thermostat
Smart thermostat recommended; $75 rebate may be available
Notes
CenterPoint delivers electricity but does not sell it directly. Rebates are through CenterPoint's efficiency programs. Your retail electric provider is separate.
Tip: Not sure which utility serves your area? Your electric bill will show the transmission and distribution utility (TDU). In the deregulated Texas market, your retail electric provider (REP) sends the bill, but the TDU (Oncor, CenterPoint, etc.) manages the rebate programs. Ask your installer which TDU serves your address and what their contractor requirements are.
Use this checklist to evaluate every heat pump installer you consider. An installer who meets all 10 points is worth your business.
Verify the installer holds a current Class A or Class B HVAC license from the Texas Department of Licensing and Regulation (TDLR). Search at tdlr.texas.gov by name or license number. Do not accept expired, suspended, or unverifiable credentials.
Request a current certificate of insurance showing general liability coverage ($1M minimum) and workers compensation. If a worker is injured on your property and the contractor lacks coverage, you could be liable. Texas does not mandate workers comp for all employers, so verify it explicitly.
The installer must perform a room-by-room Manual J load calculation before quoting a system. This is required in Texas and ensures proper sizing. In humid regions like Houston, Corpus Christi, and the Gulf Coast, oversizing kills dehumidification and creates mold risks. This should be included at no extra charge.
Ask whether the contractor is enrolled in or familiar with your specific utility rebate program (Oncor, Austin Energy, CPS Energy, CenterPoint). Some utilities require approved contractors or project pre-approval. An installer unfamiliar with your utility program may cost you thousands in missed rebates.
The proposed equipment should meet or exceed ENERGY STAR standards. As of January 2023, new efficiency standards require a minimum SEER2 of 14.3 for split systems in the South region (which includes all of Texas). Higher SEER2 ratings (16-22+) qualify for better utility rebates.
Texas requires a programmable or smart thermostat per HVAC unit. The installer should include a DOE-listed smart thermostat in the proposal. Confirm the specific model and verify it qualifies for your utility rebate program. This should not be treated as an optional add-on.
Get warranty terms in writing before signing. Minimum: 10-year compressor warranty and 5-year parts warranty from the manufacturer, plus at least a 2-year workmanship warranty from the installer. Verbal promises are unenforceable. If they will not put it in writing, walk away.
Ask about experience with your specific system type: ducted central heat pump, ductless mini-split, or dual-fuel hybrid. Texas has a mix of all three depending on climate zone. An installer experienced with ducted systems may not be the best choice for a ductless retrofit, and vice versa.
The installer must pull all required mechanical and electrical permits from your local building department and schedule inspections after installation. If they suggest skipping permits, that is a disqualifying red flag. Unpermitted work creates liability, insurance, and resale problems.
Demand a detailed, itemized written quote that breaks out equipment costs, labor, thermostat, ductwork modifications, electrical work, permits, disposal of old equipment, and any applicable rebate credits. A lump-sum quote with no breakdown makes it impossible to compare proposals.
A Manual J load calculation is required for every Texas heat pump installation. Here is why it matters more in Texas than almost any other state.
In Gulf Coast cities like Houston, Galveston, Corpus Christi, and Beaumont, humidity is the primary comfort challenge. An oversized heat pump cools the air too quickly without running long enough to remove moisture. This creates a cold, clammy home with elevated humidity that promotes mold growth. Proper sizing through Manual J ensures the system runs long enough to dehumidify.
Texas spans from the semi-arid Panhandle (Amarillo winters can hit single digits) to the subtropical Gulf Coast (Houston rarely freezes). A Manual J accounts for your specific location’s design temperatures, solar loads, and humidity levels. Square footage rules simply cannot account for this range.
Red flag: Any contractor who quotes a system tonnage without performing a Manual J load calculation is guessing. Common excuses include "I can tell by the square footage," "your old system was 3 tons so we'll match it," or "we always put 4 tons in houses this size." None of these are acceptable. The Manual J should be performed before any equipment is quoted, and it should be included at no extra charge.
Texas energy code requires a programmable or smart thermostat for each HVAC unit. Many utility rebate programs add additional requirements.
Widely accepted by all TX utility programs. Built-in room sensor. DOE listed.
$220-$280 retail
DOE listed. Auto-scheduling learns your routine. Accepted by most TX utility programs.
$180-$250 retail
DOE listed. Smart room sensors available. Strong compatibility with traditional HVAC setups.
$170-$230 retail
Rebate stacking tip: Some Texas utilities offer separate smart thermostat rebates ($75-$175) on top of heat pump rebates. Your installer should include a qualifying smart thermostat in the proposal and claim both rebates where available. Ask specifically whether the thermostat model qualifies for your utility’s thermostat rebate program.
Any one of these should give you serious pause. Two or more and you should find a different installer.
This is non-negotiable. An unlicensed contractor is operating illegally in Texas. Their work will not pass inspection, manufacturer warranties will not apply, and you have no recourse if something goes wrong. Verify every license at tdlr.texas.gov before signing anything.
Any contractor who sizes your system by "square footage rule of thumb" without a proper load calculation is guessing. In Texas, where humidity management is critical, an oversized system will short-cycle and fail to dehumidify your home. This leads to mold, hot spots, and higher energy bills.
Rules like "1 ton per 500 square feet" ignore insulation, windows, ductwork, orientation, ceiling height, and local climate zone. Texas ranges from semi-arid West Texas to humid Gulf Coast, and sizing requirements vary dramatically. Demand a Manual J calculation.
"This price is only good today" or "we have one unit left at this price" are high-pressure sales tactics. Reputable contractors provide written quotes valid for 30-60 days and encourage you to compare with other installers. Walk away from anyone pressuring you to sign on the spot.
If a contractor promises a great warranty verbally but will not put specific terms in writing before you sign, those promises are worthless. Get compressor, parts, and labor warranty durations in writing as part of the contract.
If the installer does not know the specific requirements for your utility (Oncor, Austin Energy, CPS Energy, or CenterPoint), you risk missing out on hundreds to over a thousand dollars in rebates. A contractor who works regularly in your area should know your utility program inside and out.
Permits protect you. An installer who suggests working without permits is cutting corners. Unpermitted HVAC work can void your homeowner's insurance coverage, create problems when selling your home, and result in unsafe installations that do not meet code.
Get at least 3 written quotes from TDLR-licensed contractors. Here is how to ensure you are comparing apples to apples.
| Compare This | What to Look For | Red Flag |
|---|---|---|
| SEER2 Rating | Same SEER2 rating across all quotes (e.g., 16 SEER2) | One quote lists a lower SEER2 to appear cheaper |
| System Tonnage | Same tonnage based on Manual J (e.g., 3.5 ton) | Tonnage varies widely between quotes without explanation |
| System Type | Same type: ducted, ductless mini-split, or hybrid | Comparing different system types without clarifying tradeoffs |
| Smart Thermostat | Specific model included in price, DOE listed | Thermostat listed as "additional" or not specified |
| Ductwork | Any ductwork modifications or sealing included | "Ductwork not included" buried in fine print |
| Electrical Work | Circuit breaker, disconnect, any panel work included | Electrical work quoted separately or not mentioned |
| Permits | All mechanical and electrical permits included | "Permits not included" or "homeowner responsibility" |
| Rebate Assistance | Contractor handles utility rebate paperwork | "Rebate is your responsibility" |
Bottom line: The cheapest quote is rarely the best value. A quote that excludes ductwork modifications, electrical work, permits, and thermostat may look cheaper but will end up costing more once those items are added. Always compare total project scope, not just the bottom-line number.
Print this list and bring it to every installer consultation. A good installer will welcome these questions.
What is your TDLR license number, and is it a Class A or Class B license?
Will you perform a Manual J load calculation for my home, and is it included in the proposal?
Are you enrolled in my utility's rebate program (Oncor/Austin Energy/CPS Energy/CenterPoint)?
Will you handle the rebate application paperwork on my behalf?
What specific equipment make, model, and SEER2 rating are you proposing?
What refrigerant does the proposed system use?
What smart thermostat is included, and does it meet my utility's rebate requirements?
What warranties are included (compressor, parts, and your labor/workmanship)?
Do you have experience with my system type (ducted, ductless, or dual-fuel hybrid)?
How many heat pump installations have you completed in the past 12 months?
Can you provide 3 references from recent Texas installations?
What is the total project timeline from signing through installation to inspection?
Do you pull all required mechanical and electrical permits?
What does the quote include for ductwork modifications, electrical work, disposal, and cleanup?
Understanding available incentives helps you evaluate installer proposals and ensures you do not miss rebates due to contractor choices.
| Program | Amount | Status | Key Requirement |
|---|---|---|---|
| Utility Rebates (varies) | $200-$1,200 | Active | Varies by utility; see section above |
| Smart Thermostat Rebate | $75-$175 | Active | DOE-listed thermostat; varies by utility |
| HEAR (Federal) | Up to $8,000 (income-qualified) | Pending | TX has not launched; pending DOE approval |
| Federal 25C Tax Credit | $0 | Expired Dec 31, 2025 | No longer available |
Important: The federal Section 25C energy efficiency tax credit expired on December 31, 2025. Any installer who tells you a federal tax credit is available for heat pumps in 2026 is providing incorrect information. The only active incentives in Texas are utility-specific rebates and smart thermostat rebates. HEAR federal rebates are pending DOE approval for Texas.
Here is the typical timeline for a heat pump installation in Texas, from first contact to final inspection.
The installer visits your home, assesses your existing HVAC system, performs a Manual J load calculation, and evaluates your ductwork. You should receive a written proposal within 3-5 business days.
Compare at least 3 proposals from TDLR-licensed contractors. Review equipment specs, SEER2 rating, warranty terms, total cost, thermostat model, and whether they handle utility rebate paperwork. Once you sign, the process begins.
For Austin Energy and CPS Energy, pre-approval is required before installation. Your contractor should submit this. Oncor and CenterPoint programs may not require pre-approval but confirm with your installer.
The installer pulls mechanical and electrical permits from your local building department or city. Permit timelines vary by Texas municipality. Your installer should handle this entirely.
Central ducted heat pump replacement: 1-2 days. New ductless mini-split installation: 1-2 days. Dual-fuel hybrid system: 2-3 days. Major ductwork modifications can add 1-2 additional days.
Your municipality schedules a mechanical and electrical inspection. The installer should commission the system, verify refrigerant charge, test heating and cooling modes, and walk you through operation of the new thermostat.
Your installer submits rebate paperwork to the utility. Processing times vary: Oncor is typically 6-8 weeks, Austin Energy 4-6 weeks, CPS Energy 6-10 weeks. Your installer should keep you informed.
Texas has a mature HVAC industry, but heat pump expertise varies significantly. Here is context to help you evaluate your options.
Major HVAC companies operating across Texas metros often have established relationships with utility rebate programs and high installation volume. They tend to offer reliable warranty service and streamlined rebate processing, but may have higher overhead reflected in pricing and less flexibility on scheduling.
Many Texas AC contractors have historically installed only cooling-focused systems and gas furnaces. As heat pump demand grows, they are adding heat pump services. Verify they have specific training and experience with heat pump heating mode, not just cooling. An AC-focused contractor may not properly configure or commission the heating side of the system.
Some solar and whole-home electrification companies offer heat pump services as part of a comprehensive energy upgrade. This can be convenient for bundled projects (solar + heat pump + battery). Look for dedicated HVAC technicians on staff with TDLR licenses under the company's name, not just subcontracted labor.
After the February 2021 winter storm, many Texas homeowners became interested in heat pumps and backup heating systems. This created a surge in demand and a corresponding increase in contractors marketing heat pump services. Not all of these contractors have deep heat pump experience. Ask specifically how many heat pump installations they completed in the past 12 months.
Our recommendation: Get at least 3 quotes from TDLR-licensed installers who are familiar with your utility's rebate program. Compare not just price, but equipment specs, Manual J methodology, warranty terms, what is included versus excluded, and how they communicate. The cheapest quote is rarely the best value.
Licensed HVAC Contractor
NuWatt Energy is a licensed HVAC contractor serving Texas homeowners. We include Manual J load calculations with every proposal, install ENERGY STAR qualified heat pump systems, and handle utility rebate paperwork on your behalf. We are familiar with the contractor requirements for Oncor, Austin Energy, CPS Energy, and CenterPoint programs.
15+
Years Experience
2,500+
Installations Completed
NABCEP
Certified Team
We wrote this guide to help you make an informed decision, whether you choose us or another qualified installer. The most important thing is that you end up with a properly sized, properly installed system that captures every available utility rebate.
Common questions Texas homeowners ask about choosing a heat pump installer.
Yes. Texas requires all HVAC installations to be performed by a contractor holding a Class A or Class B HVAC license issued by the Texas Department of Licensing and Regulation (TDLR). Class A holders can work on systems of any capacity. Class B holders are limited to systems under 25 tons of cooling capacity (sufficient for most residential work). Installing or servicing HVAC equipment without a TDLR license is illegal in Texas and voids manufacturer warranties.
You can verify any Texas HVAC contractor license through the TDLR online license search tool at tdlr.texas.gov. Search by the contractor's name, company name, or license number. The search result shows the license class (A or B), issue date, expiration date, and any disciplinary actions. If a contractor cannot provide a verifiable license number, or if their license shows as expired or suspended, do not hire them.
A Manual J load calculation is an engineering analysis that determines exactly how much heating and cooling capacity your home needs. It factors in square footage, insulation levels, window types and orientation, ceiling height, number of occupants, local climate data, and infiltration rates. In Texas, this is critical because oversized systems cannot properly dehumidify in the Gulf Coast and humid regions, leading to mold, comfort issues, and wasted energy. Any reputable installer includes this in their proposal at no extra charge.
It depends on your utility. Oncor requires contractors listed in their approved rebate program. Austin Energy requires pre-approved contractors and project pre-approval before installation. CPS Energy requires pre-qualification through their STEP (Save for Tomorrow Energy Plan) program. CenterPoint does not require a specific contractor, but rebate participation still depends on meeting program guidelines. Always check with your specific utility before hiring an installer.
Get at least 3 written quotes from TDLR-licensed contractors. Compare them on an apples-to-apples basis: same SEER2 rating, same tonnage, same system type (ducted, ductless, or hybrid). Check what each quote includes or excludes: thermostat, ductwork modifications, electrical upgrades, permits, and rebate paperwork assistance. The cheapest quote often excludes items that other installers include, so compare total scope rather than just bottom-line price.
At minimum, expect a 10-year compressor warranty and a 5-year parts warranty from the manufacturer (most major brands offer this with product registration). The installer should also provide at least a 2-year workmanship or labor warranty covering their installation work. Get all warranty terms in writing before signing. Some installers offer extended labor warranties of 5-10 years for an additional fee, which can be worthwhile for peace of mind.
Yes. Most Texas municipalities and counties require mechanical and electrical permits for HVAC installations. Your installer should pull all required permits, schedule inspections, and ensure the installation passes code. If an installer suggests skipping permits to "save time" or "save money," that is a red flag. Unpermitted work can create problems when selling your home, void insurance claims, and result in unsafe installations.
Texas energy code requires a programmable or smart thermostat for each HVAC unit in new installations and replacements. For utility rebate programs, many require a DOE-listed smart thermostat (Oncor, for example). Popular qualifying models include the Ecobee Smart Thermostat, Google Nest Learning Thermostat, and Honeywell T-series. Some utilities offer separate smart thermostat rebates of $75 to $175 on top of heat pump rebates.
Utility rebate programs from Oncor, Austin Energy, CPS Energy, and CenterPoint.
Ducted, ductless, and hybrid costs. Net cost after utility rebates.
Cost comparison for Texas gas-heated homes switching to heat pumps.
Why a heat pump can replace both your AC and furnace in one unit.
Your starting point for all Texas heat pump information.
Manual J-based sizing with utility rebate estimates included.
Last updated: February 2026. Information is accurate as of publication date. Utility rebate programs and TDLR licensing requirements are subject to change; verify current requirements at the respective utility and TDLR websites.
NuWatt Energy is a licensed HVAC contractor serving Texas. We handle utility rebate paperwork and include a Manual J load calculation with every assessment. Get a free quote with no pressure and no obligation.
Or call us: (877) 772-6357 — Mon-Fri 8am-6pm, Sat 9am-2pm