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Whole-home electrification — the smartest energy play in TX. When your AC dies, replace the AC and the furnace with one heat pump. Then add solar to power it. Together, they save more than either one alone.
Both the federal solar credit (25D) and heat pump credit (25C) expired December 31, 2025. This guide shows you every incentive that actually works in 2026, the real math on bundling, and the correct installation sequence.
Bundle Cost
$30K–$47K
Solar + HP combined
Annual Savings
$2,500–$4,000
Energy cost reduction
Federal Credits
$0
25D + 25C both expired
Austin Rebates
$5,500+
Best utility stack in TX
Both federal credits are gone: 25D (solar) and 25C (heat pump) expired December 31, 2025.
Homeowners who buy solar or a heat pump with cash or a loan in 2026 receive $0 in federal tax credits. Many websites still advertise these credits. This guide uses verified 2026 data only. What happened to the federal credits
Texas is a cooling-dominant state — roughly 80% of your HVAC energy goes to air conditioning. That makes the bundle argument uniquely strong here.
A heat pump replaces both your AC and your furnace. In Texas, that means you remove your aging central AC unit and gas furnace and install a single system that heats and cools. Equipment savings: $2,000–$5,000 versus buying both separately.
The biggest objection to heat pumps is "my electric bill will go up." Solar eliminates that concern entirely. Your panels produce the extra kWh the heat pump needs, making the electric bill increase negligible or zero.
An AC + furnace replacement costs $8,000–$14,000. A heat pump costs $8,000–$18,000 but does both jobs. You are paying a similar amount for equipment that is more efficient and eliminates your gas bill entirely.
Most TX homes pay $800–$1,500/year for natural gas (heating, water heater, stove). A heat pump eliminates the heating portion. Add a heat pump water heater and induction stove, and you can disconnect from gas entirely.
Solar + heat pump + battery = fully electrified, grid-independent home. During ERCOT outages, your battery powers essential loads and the heat pump while solar recharges the battery during the day.
Winter Storm Uri left 4.5M homes without power. The ERCOT grid is isolated — no neighboring states can help. A solar + HP + battery system provides true energy independence for Texas homeowners.
The TX Bundle Trigger: When Your AC Dies
Most Texas homeowners consider a heat pump when their AC unit fails (average TX AC lifespan: 10–15 years). That is the perfect moment to bundle. Instead of spending $5,000–$8,000 on a new AC alone, spend $8,000–$12,000 on a heat pump that also replaces your furnace, then add solar to power it. You address the immediate need and lock in decades of savings.
Here is what the bundle actually costs and saves in Texas in 2026, using real pricing data. No federal credit is included because both 25D and 25C are expired.
10kW solar + 3–4 ton ducted heat pump. Cash purchase, no federal credits.
| Component | Cost Range | Notes |
|---|---|---|
| Traditional AC + Furnace replacement | $8,000–$14,000 | Two separate systems, two installations |
| Heat pump instead (replaces both) | $8,000–$18,000 | One system, one installation. Ducted central. |
| Equipment savings vs AC + furnace | $2,000–$5,000 | You save by replacing two systems with one |
| 10kW solar system | $22,000–$28,500 | Market $2.2/W – NuWatt $2.85/W |
| Federal tax credits (25D + 25C) | $0 | Both expired Dec 31, 2025 |
| Total Bundle Cost | $30,000–$46,500 | Solar + heat pump, no federal credits |
Annual Energy Savings
$2,500–$4,000
Solar production + HP efficiency + eliminated gas bill
Payback Period
8–12 years
Cash purchase, no federal credits, avg TX rates
Property Tax Savings
$400–$600/yr
100% solar exemption under TX Tax Code §11.27
Austin Energy Customers: The Best Bundle Deal in Texas
Austin Energy offers ~$3,000 in heat pump rebates (Power Saver program) plus $2,500 for solar, totaling $5,500+ in local rebates. Add the Value of Solar export credit at 9.91¢/kWh, and Austin bundle payback drops to approximately 6–8 years. Income-qualified customers may receive even more.
Both credits that previously made bundling more affordable expired under the OBBBA (signed July 4, 2025). Here is the current status.
Section 48/48E: Still Available for Solar Lease/PPA
If you go with a solar lease or PPA, the third-party system owner (the financing company, NOT the installer) can claim the 30% commercial ITC on the solar portion. This credit is available for projects beginning construction before July 4, 2026. It does not apply to heat pumps. On a $22,000 TX solar system, the lessor receives $6,600 in credits, which they pass to you via lower monthly payments.
Compare cash vs lease in TXHEAR Rebates: PENDING in Texas (Not Available)
Texas received a $690 million HEAR allocation. SECO (State Energy Conservation Office) is still in the RFP phase for a third-party administrator — proposals were due February 5, 2026. The launch date is TBD. When active, HEAR could provide up to $8,000 for low-income (≤80% AMI) and $4,000 for moderate-income (80–150% AMI) households for heat pump installation.
SECO warns against signing agreements for HEAR-dependent projects before official program launch.
With federal credits gone, utility rebates are the only direct financial incentives for the bundle. What you can get depends entirely on your utility territory. Here is the stack for each major TX utility.
| Territory | Solar Rebate | Heat Pump Rebate | Total Stack | Notes |
|---|---|---|---|---|
| Austin EnergyBest | $2,500 flat upfront | ~$3,000 (Power Saver) | $5,500+ | Best deal in TX. Value of Solar 9.91¢/kWh for exports. Income-qualified may receive more. |
| Oncor (DFW, Waco) | None (REP buyback only) | $300–$600/unit | $300–$600 | Take a Load Off Texas program. Choose a REP with good solar buyback (Chariot ~10¢, Green Mountain ~9.7¢). |
| CenterPoint (Houston) | None (REP buyback only) | Up to $500/unit | Up to $500 | CenterPoint Standard Offer Program (SOP) provides up to $500 per qualifying ENERGY STAR heat pump. REP buyback for solar. |
| CPS Energy (San Antonio) | Residential solar rebate ended | $100–$275/ton (Casa Verde) | $500–$1,375 | HP rebate via Casa Verde. SEER2 16+ = $275/ton. Solar buyback at avoided cost only. |
| AEP Texas / TNMP | None | None confirmed (central HP) | Minimal | TNMP offers $400–$500 for heat pump water heaters only. No central HP or solar rebate. |
Rebates subject to funding availability and program changes. HEAR is NOT included (pending in TX). Verify current amounts with each utility before purchase.
The order in which you install matters. The heat pump changes your electric usage profile, which determines how much solar you need. Get this wrong and you will either overspend on solar or undersize it.
Have a professional energy audit and Manual J load calculation done. This determines the correct heat pump size for your home and helps identify insulation or duct issues to fix first.
Address your HVAC need first. The heat pump replaces both your AC and furnace in one installation. This changes your electric usage profile immediately.
Now that your electric profile reflects the heat pump load, size your solar system accurately. A heat pump adds 2,000–4,000 kWh/year but eliminates the gas bill. Size 1–2kW larger than a non-HP home.
Complete the electrification triangle. A 10–13.5kWh battery provides 8–16 hours of backup, powers the heat pump during outages, and enables ERCOT DRRS participation.
Why Heat Pump First, Solar Second?
A heat pump changes your home's electric consumption significantly. It adds 2,000–4,000 kWh/year of electric usage while eliminating your gas bill. If you install solar first based on your current electric profile, you will undersize the system for your post-heat-pump needs. Installing the heat pump first lets you measure your actual new electric load, then size solar precisely to cover it. This results in a more accurate system and better ROI.
Adding a heat pump changes your electric profile. Here is how to size your solar system correctly for a heat-pump-equipped TX home.
Before Bundle
12,000 kWh/yr
Electric only (old AC)
Gas Bill
$1,100/yr
Heating + water heater
After HP Install
14,500 kWh/yr
No more gas bill
Solar System
11kW
~16,500 kWh/yr produced
Net Cost
~$0/yr
Solar covers everything
Solar + heat pump is a strong duo. Adding a battery creates the complete electrification triangle: generate, condition, and store your own energy. In Texas, the grid resilience argument alone justifies the investment.
During an ERCOT outage, your battery powers essential loads including the heat pump (most modern inverters support reduced- capacity HP operation). Solar recharges the battery each day. A 10–13.5kWh battery provides 8–16 hours of backup for essential loads.
During a multi-day winter event like Uri, solar panels still produce electricity (reduced in cloudy/icy conditions, but not zero). Even at 30–50% capacity, solar recharges a battery enough to run the heat pump for several hours daily — preventing pipe freezes and maintaining livable temperatures.
ERCOT is launching the Distributed Resource Registration System (DRRS) in 2026. This will register residential batteries and solar for potential demand response payments and grid services revenue. Battery owners may earn additional income by participating in grid balancing programs.
Battery Cost
$10,000–$16,000
10–13.5kWh installed
Full Bundle Cost
$40K–$63K
Solar + HP + battery
Outage Protection
8–16 hours
Essential loads + HP
DRRS Revenue
TBD in 2026
New ERCOT program
Deep dives into every aspect of heat pumps in Texas — rebates, costs, comparisons, utility programs, and installation guidance.
Comprehensive solar guides for Texas — buyback plans, costs, property tax, financing, and ERCOT battery backup.
Answers to the most common questions about bundling solar panels with a heat pump in Texas in 2026, including costs, credits, installation order, and battery backup.
Yes. In Texas, your AC is your single biggest energy cost. A heat pump replaces both your AC and furnace with one more-efficient system, and solar panels power that system with free electricity. Even without the expired federal tax credits (25D and 25C are both $0 in 2026), the combined energy savings of $2,500–$4,000/year and equipment savings of $2,000–$5,000 (replacing two systems with one) make the bundle financially strong, especially in Austin where $5,500+ in utility rebates are available.
No. Both Section 25D (residential solar ITC) and Section 25C (energy efficiency / heat pump credit) expired December 31, 2025 under the OBBBA signed July 4, 2025. Homeowners who purchase solar or heat pumps with cash or a loan receive $0 in federal credits in 2026. However, if you go with a solar lease or PPA, the third-party system owner can still claim the 30% ITC under Section 48/48E for projects beginning construction before July 4, 2026.
A typical bundle costs $30,000–$46,500: $22,000–$28,500 for a 10kW solar system plus $8,000–$18,000 for a ducted central heat pump. Adding a battery adds $10,000–$16,000. Austin Energy customers can reduce this by $5,500+ in utility rebates. The bundle often costs less than buying a separate AC, furnace, and solar system individually.
Install the heat pump first. The heat pump changes your electric usage profile significantly — it adds 2,000–4,000 kWh/year of electric usage while eliminating your gas bill. By installing the heat pump first, you can then size your solar system to match your actual new electric load, which results in a more accurately sized (and cost-effective) solar installation.
Typically 1–2kW larger than without a heat pump. A heat pump adds 2,000–4,000 kWh/year to your electric bill, but it also eliminates your gas bill ($800–$1,500/year). The net electric increase is modest. Most TX bundle homes install a 10–12kW solar system paired with a 3–4 ton heat pump.
It varies by territory. Austin Energy offers the best stack: ~$3,000 for heat pumps (Power Saver program) plus $2,500 for solar, totaling $5,500+. Oncor offers $300–$600 for heat pumps only. CPS Energy offers $100–$275/ton for heat pumps via Casa Verde. CenterPoint and AEP Texas offer minimal direct rebates. There is no statewide solar or heat pump rebate in Texas.
HEAR (Home Energy Assessment and Rebate) is PENDING in Texas. The state received a $690 million allocation, but SECO (State Energy Conservation Office) is still in the RFP phase for a third-party administrator as of February 2026. When launched, HEAR could provide up to $8,000 for low-income households and $4,000 for moderate-income. Do not factor HEAR into your 2026 budget — the launch date remains TBD.
A heat pump is essentially an air conditioner that can run in reverse. In summer, it cools your home exactly like a traditional AC. In winter, it reverses the refrigerant cycle to extract heat from outdoor air and pump it inside. In Texas’s mild winters, a standard heat pump handles heating efficiently without supplemental heat. You remove your old AC and furnace and install one heat pump system that does both jobs.
Yes. Texas exempts 100% of the added value of solar panels from property tax under TX Tax Code §11.27. This applies regardless of whether you also install a heat pump. File Form 50-123 with your county appraisal district by April 30. A $22,000 solar system saves $9,000–$12,000 in property taxes over 25 years.
With the full solar + heat pump + battery triangle, you have significant grid independence. During an ERCOT outage: your battery powers essential loads including the heat pump (most can run on reduced capacity from a battery inverter), your solar panels recharge the battery during daylight hours, and you can sustain essential operations for days. During Winter Storm Uri, homes with solar + battery maintained power while 4.5 million homes went dark. The DRRS program launching in 2026 may also provide revenue for battery participation in grid services.
Get a personalized estimate for your whole-home electrification bundle. We will size the heat pump, the solar system, and the optional battery based on your actual home, usage, and utility territory.
Or call us: 781-235-8180
Solar pricing: EnergySage Solar Marketplace (January 2026), NuWatt Energy TX installation data. Market rate $2.20/W, NuWatt $2.85/W.
Heat pump pricing: NuWatt Energy TX installation data, HVAC industry averages, individual utility program guidelines (Austin Energy, CPS Energy, Oncor).
Utility rebates: Austin Energy Power Saver (austinenergy.com), CPS Energy Casa Verde (cpsenergy.com), Oncor Take a Load Off Texas (takealoadofftexas.com).
HEAR status: SECO (comptroller.texas.gov/programs/seco), RFP phase as of February 2026.
Federal tax credits: OBBBA (signed July 4, 2025). Section 25D expired Dec 31, 2025. Section 25C expired Dec 31, 2025. Section 48/48E active for third-party system owners beginning construction before July 4, 2026.
Property tax: Texas Comptroller, TX Tax Code §11.27, Form 50-123.
ERCOT: DRRS program documentation (ercot.com).
Last updated: February 2026. Sources verified against official utility and government program documentation.