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Oncor Electric Delivery is the largest Transmission and Distribution Utility (TDU) in Texas, serving approximately 10 million customers across the Dallas-Fort Worth metroplex, Lubbock, Waco, Tyler, and surrounding areas. As a deregulated delivery utility, Oncor provides the rebate — your Retail Electric Provider (REP) provides the electricity.
With the federal Section 25C tax credit expired as of December 31, 2025, the Oncor rebate of up to $600 per unit is now the primary incentive for DFW-area homeowners upgrading to a heat pump.
The $2,000 federal Section 25C Energy Efficient Home Improvement Credit expired under the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025. There is no federal tax credit for residential heat pump purchases in 2026. The Oncor utility rebate ($600/unit) is now the primary financial incentive available to DFW-area homeowners. HEAR federal rebates may become available when SECO launches the program in Texas.
Oncor offers a straightforward per-unit rebate for qualifying heat pump installations within their service territory. Here are all the requirements and details you need to know.
Per qualifying heat pump unit
Important: Applications submitted outside the February through November cycle are not accepted. Funding is available on a first-come, first-served basis within each annual cycle. Apply early to ensure availability.
Oncor is a delivery utility in the deregulated Texas electricity market. They operate the poles, wires, and meters. You choose your Retail Electric Provider (REP) separately for the electricity itself.
Largest service territory. Includes Dallas, Fort Worth, Arlington, Plano, Frisco, McKinney, Denton, and surrounding suburbs.
West Texas hub. Includes Lubbock, Amarillo corridor, and surrounding communities.
Central Texas corridor. Includes Waco, Temple, Killeen, and Bryan-College Station areas.
East Texas region. Includes Tyler, Longview, and surrounding areas.
Your electric bill shows both your REP (who you pay) and your TDU (who delivers the power). If Oncor Electric Delivery is listed as your TDU, you qualify for Oncor rebates. You can also check at oncor.com by entering your address.
Texas has a deregulated electricity market. Understanding how it works is critical for heat pump owners — especially for choosing the right electricity plan and knowing where your rebate comes from.
Transmission & Distribution Utility
Retail Electric Provider
~$0.15/kWh
Average all-in rate (Oncor territory)
$0.10
Low end (competitive REP plans)
$0.165
High end (premium / green plans)
Texas rates are significantly lower than the national average. This makes heat pump operating costs very competitive compared to gas heating, especially for homes with efficient SEER2 16+ systems.
The Dallas-Fort Worth area has moderate heating needs but significant cooling demands. Heat pumps excel in this climate, providing both heating and cooling from one system.
| Cost Category | Amount |
|---|---|
| Average 3-ton ducted heat pump (DFW) | $8,250 |
| Oncor rebate | -$600 |
| Federal 25C credit (expired) | $0 |
| Net cost after Oncor rebate | $7,650 |
| If HEAR launches (low-income): $7,650 - $8,000 | Near $0 |
Annual Savings vs Gas + AC
$800-1,200
Per year at ~$0.15/kWh average rate
Payback Period
6-8 years
At current Oncor territory rates
System Lifespan
15-20 yrs
With proper maintenance
Texas advantage: With average electricity rates around $0.15/kWh (much lower than the Northeast at $0.25-0.30/kWh), heat pump operating costs in the Oncor territory are very competitive. Combined with the mild DFW winters, heat pumps deliver strong savings with minimal efficiency loss from cold temperatures.
Follow these steps to qualify for and receive the Oncor heat pump rebate. The process is straightforward but requires attention to documentation and timing.
Check your electric bill or visit oncor.com to confirm Oncor is your TDU (Transmission and Distribution Utility). Your REP name on the bill does not determine your TDU.
Have a licensed HVAC contractor perform a Manual J load calculation to properly size your heat pump system. Oversized or undersized systems reduce efficiency and comfort.
Select an ENERGY STAR certified heat pump with a minimum SEER2 rating of 16. This exceeds the Texas code minimum of 14.3 and qualifies for the Oncor rebate.
Hire a TDLR-licensed HVAC contractor experienced with Oncor rebate applications. They handle the installation and help with rebate paperwork.
Install an Energy Star certified smart thermostat (Ecobee, Nest, Honeywell T-series, etc.). This is mandatory for the Oncor rebate and enables demand response.
Submit your completed rebate application through the Oncor website during the application cycle (February through November). Include all required documentation.
Oncor processes approved applications within 4 to 8 weeks. The rebate is issued as a check mailed to your address.
Critical: Apply DURING the rebate cycle (February through November). Applications submitted outside this window are not accepted. Incomplete applications are the most common cause of rejection — ensure all documentation (equipment specs, contractor license, smart thermostat confirmation) is included.
All qualifying systems must be ENERGY STAR certified and meet Oncor’s minimum SEER2 16 requirement — significantly higher than the Texas building code minimum of SEER2 14.3.
Min: SEER2 16+
Most common for DFW homes with existing ductwork. Whole-home heating and cooling.
Min: SEER2 16+
Ideal for room additions, older homes without ductwork, or supplemental zones.
Min: UEF 2.0+
Separate Oncor rebate available. Replaces traditional electric or gas water heater.
Oncor requires a DOE-listed Energy Star certified smart or programmable thermostat with every qualifying heat pump installation. This is not optional — it is a mandatory requirement for the rebate. The thermostat enables demand response, allowing Oncor to send signals during grid stress events.
| Thermostat | Price Range | Notes |
|---|---|---|
| Ecobee Smart Thermostat Premium | $220-250 | DOE listed, room sensors included |
| Google Nest Learning Thermostat | $180-250 | DOE listed, auto-schedule learning |
| Honeywell Home T9/T10 Pro | $170-230 | DOE listed, geofencing, room sensors |
| Emerson Sensi Touch 2 | $130-160 | DOE listed, budget-friendly option |
Smart thermostats enable demand response — Oncor can send signals during peak grid stress events (extreme heat, winter storms) to temporarily adjust your thermostat. This helps prevent grid failures and rolling blackouts. Participation in demand response events is typically voluntary, and some REPs offer additional credits for participation.
Some Retail Electric Providers (REPs) in the Oncor territory offer additional smart thermostat rebates of $50 to $75 on top of the Oncor heat pump rebate. Check with your specific REP for current offers. TXU Energy, Reliant Energy, and Green Mountain Energy have historically offered thermostat incentives.
The Dallas-Fort Worth area experienced extreme cold during Winter Storm Uri in February 2021, raising important questions about heat pump performance and electricity pricing during severe weather events.
Many DFW homeowners opt for a dual-fuel hybrid system: a heat pump paired with a gas furnace backup. The heat pump handles 95% of heating needs efficiently, while the gas furnace activates during rare extreme cold events. This provides peace of mind without sacrificing the year-round efficiency benefits of a heat pump. Dual-fuel systems qualify for the Oncor rebate.
The Home Electrification and Appliance Rebates (HEAR) program allocated $690 million for Texas — the largest state allocation in the nation. However, the program has not launched yet.
HEAR rebates are point-of-sale, meaning the discount would be applied at the time of installation, not as a reimbursement.
Warning: Do NOT sign contracts that depend on HEAR funding until SECO officially launches the program. Any contractor promising HEAR rebates before the program is active should be treated with caution. The Oncor $600 rebate and any REP thermostat incentives are the only confirmed rebates available today.
Oncor offers up to $600 per qualifying heat pump unit in 2026. The rebate applies to central ducted heat pumps, ductless mini-splits, and heat pump water heaters (separate rebate). The unit must meet SEER2 16 or higher and be installed by an Oncor-approved/licensed HVAC contractor. A DOE-listed smart thermostat is also required.
Yes. Oncor requires a DOE Energy Star certified smart or programmable thermostat with every heat pump rebate application. The thermostat enables demand response capability, allowing Oncor to send signals during grid stress events (like extreme heat or cold). Popular qualifying models include the Ecobee Smart Thermostat Premium, Google Nest Learning Thermostat, and Honeywell T-series smart thermostats.
Oncor requires a minimum SEER2 rating of 16 for heat pump rebate eligibility. This is significantly higher than the Texas building code minimum of SEER2 14.3. The higher efficiency requirement ensures that rebated systems deliver meaningful energy savings. All qualifying systems must also be ENERGY STAR certified.
Oncor accepts heat pump rebate applications from February through November each year. Applications submitted outside this window are not accepted. The cycle resets annually, and funding is available on a first-come, first-served basis within each cycle. We recommend applying early in the cycle (February-March) to ensure funding availability.
Oncor provides the heat pump rebate. In the deregulated Texas electricity market, Oncor is the Transmission and Distribution Utility (TDU) responsible for the physical infrastructure — poles, wires, and meters. Your Retail Electric Provider (REP) like TXU, Reliant, or Green Mountain Energy sells you electricity but does NOT offer heat pump rebates. The rebate comes from Oncor regardless of which REP you choose.
When HEAR becomes available in Texas, yes. The federal HEAR program (Home Electrification and Appliance Rebates) has allocated $690 million for Texas, but SECO (State Energy Conservation Office) has NOT yet launched the program as of February 2026. Once launched, HEAR rebates of up to $8,000 for low-income households should be stackable with Oncor utility rebates. Do NOT sign contracts that depend on HEAR funding until SECO officially launches the program.
You must use an Oncor-approved or state-licensed HVAC contractor for your heat pump installation to qualify for the rebate. The contractor must be properly licensed with TDLR (Texas Department of Licensing and Regulation) and familiar with the Oncor rebate application process. Ask potential contractors if they have completed Oncor rebate applications before.
After submitting an approved rebate application through the Oncor website, processing typically takes 4 to 8 weeks. The rebate is issued as a check. Make sure all documentation is complete before submitting — incomplete applications are the most common cause of delays. Required documentation includes proof of purchase, contractor license, equipment specifications, and smart thermostat installation confirmation.
Yes. Ductless mini-split heat pumps are eligible for the Oncor rebate as long as they meet the SEER2 16 minimum efficiency requirement and are ENERGY STAR certified. This makes mini-splits a good option for room additions, garages, or homes without existing ductwork. The same smart thermostat requirement applies, though some mini-split systems have integrated smart controls that may qualify.
The average cost of a 3-ton ducted heat pump installation in the Dallas-Fort Worth area is approximately $8,250 before rebates. After the Oncor $600 rebate, the net cost is approximately $7,650. Costs vary based on system type (ducted vs ductless), brand, SEER2 rating, installation complexity, and whether ductwork modifications are needed. Ductless mini-splits typically cost $3,500 to $5,500 per zone installed.
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Read guideRates and rebate amounts shown are approximate as of February 2026. Oncor rebate amounts, eligibility requirements, and application cycle dates may change. Electricity rates in the deregulated Oncor territory vary by REP and plan type. Federal 25C tax credit expired December 31, 2025. HEAR program not yet launched in Texas. Always confirm current details with Oncor and your REP directly.
The Oncor $600 rebate is available now through November 2026. With the federal 25C credit gone, this is the primary incentive for DFW-area homeowners. NuWatt Energy helps you navigate Oncor rebates, choose the right system, and maximize your savings.
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