Home Energy Rebates: check your state energy office before you buy

Yes, but not from the IRS. IRS Fact Sheet FS-2025-05 says the 25C home improvement credit is not allowed for property placed in service after 31 December 2025. One source of money for 2026 work is the state-run Home Energy Rebates: DOE's program page says households can save up to $14,000 through the High-Efficiency Electric Home Rebate (HEEHR) program, at point of sale, in the states that have launched. The condition is your fuel. Under DOE's Program Notice 26-2, effective 29 May 2026, HEEHR pays to replace electric equipment with more efficient electric equipment, not to replace gas, oil or propane appliances. A rebate can cover one appliance or a bigger job, so ask your state energy office before you buy. The DOE, IRS and state pages were checked on 15 October 2026.

The 25C and 25D credits stopped with 2025 installations

The IRS published FS-2025-05 on 21 August 2025, after Public Law 119-21. It sets two end points. The 25C Energy Efficient Home Improvement Credit is not allowed for any property placed in service after 31 December 2025. The 25D Residential Clean Energy Credit is not allowed for expenditures made after that date, and the same fact sheet says an expenditure counts as made when the original installation is completed. Paying early does not help. A 2025 payment for a 2026 installation qualifies for neither credit.

Home Energy Rebates run through your state energy office

DOE's Home Energy Rebates page describes two programs. HOMES pays for whole-home upgrades with modeled energy savings of at least 20%, up to $8,000, and states may raise that for households under 80% of area median income. HEEHR covers insulation, air sealing, ventilation, electric wiring, electric heating and cooling and efficient electric appliances, up to $14,000, as a discount at a retail outlet or through a contractor. The same DOE page says the rebates are "now available in select states", names none, and sends you to your State or Territory Energy Office for status and eligibility. NASEO's list of State Energy Offices links each state and territory office.

Then check that its program has launched. On the office's page, look for an application you can submit today. State pages may still say HEAR, the earlier name that DOE's Notice 26-2 changed to HEEHR.

Under the 29 May 2026 notice, the rebate follows the fuel you replace

DOE's Program Notice 26-2, effective 29 May 2026, removed HEEHR rebates for fuel switching, which it defines as replacing non-electric appliances. Rebates now cover heating, cooling and appliance upgrades only from existing electric equipment to more efficient electric equipment. The notice also requires homes to use rebates for insulation and air sealing before a heating and cooling upgrade, unless the home is already insulated and sealed to a DOE-approved, state-specified level. Launched programs had three months to comply; North Carolina's program-changes page puts its deadline at 1 September 2026.

HEEHR no longer replaces gas. A home heated by gas, oil or propane gets no HEEHR rebate for replacing that furnace, boiler or water heater; ask the state energy office whether it runs HOMES, which DOE's program page ties to modeled savings. Electric baseboard, an electric furnace and an electric tank water heater are existing electric equipment, so replacing one with a heat pump or a heat pump water heater that fits its space matches the new rule. Expect an insulation and air-sealing check before a heat pump, and seal air leaks first.

What a rebate pays: North Carolina's numbers

Income sets the share. Energy Saver North Carolina, the state's program since January 2025, covers up to 100% of project costs for households under 80% of area median income and up to 50% between 80% and 150%; above 150%, households are not eligible. Its caps include up to $8,000 for an ENERGY STAR-certified heat pump, $1,750 for a heat pump water heater and $1,600 for insulation, mechanical ventilation and air sealing, with $14,000 the most per dwelling under HEAR.

Example, with published figures and one assumption. A North Carolina owner replaces electric baseboard heat with an ENERGY STAR-certified heat pump on a $12,000 quote; the quote is the example's own assumption, because no linked page gives an installed price. In the 80% to 150% tier, the page's "up to 50%" works out to at most 50% × $12,000 = $6,000, under the $8,000 heat pump cap on Energy Saver North Carolina's rebate page, leaving at least $6,000 to pay. Under 80%, "up to 100%" of the quote would be $12,000, so the cap applies: a rebate of at most $8,000 and at least $4,000 to pay. Adding the full $1,600 insulation and air-sealing cap brings that household to at most $8,000 + $1,600 = $9,600, inside the same page's $14,000 limit.

Check the contractor and the stacking rules before you sign

States set different install rules. DOE's Notice 26-2 encourages states to allow do-it-yourself retail purchases and installations, except HVAC systems, where building codes allow, yet North Carolina's rebate page says self-installed projects do not qualify and every installation must be done by a registered contractor. The same North Carolina page lets a household combine a state rebate with a utility incentive on one product, as long as the total does not exceed the purchase price; the DOE notice quotes the law that HEEHR rebates may not be combined with any other federal grant or rebate for the same project.

Hire from the state's qualified contractor list: a licensed HVAC contractor for the heat pump and a licensed electrician for a panel or new wiring. Ask the program to confirm your rebate reservation before work starts. A lower-income household can also ask about free weatherization. In North Carolina, the rebate page says a renter needs landlord approval.