Does the federal rebate pay to replace a gas furnace with a heat pump?
Not under DOE's guidance since May 29, 2026. What the HEEHR program now covers, what it still allows, and which households it can help.
Published 3 min read
In short
Generally no. DOE's Program Notice 26-2, effective May 29, 2026, removed HEEHR rebates for fuel switching: HVAC and appliance rebates now cover replacing existing electric equipment with more efficient electric equipment, plus new construction.
DOE said it would consider other measures allowed by the statute if a state has money left after fully implementing the new design, and it allows a home to keep its fossil-fuel system when a heat pump is installed.
Earlier guidance for the federal home electrification rebates allowed fuel-switching upgrades, such as replacing gas, propane or oil equipment with a heat pump. DOE removed that allowance in May 2026. If you heat with gas and are pricing a heat pump now, the federal rebate most likely does not apply.
What did DOE change?
DOE’s Program Notice 26-2 revised the guidance for state energy offices running the High-Efficiency Electric Home Rebates program, HEEHR, effective May 29, 2026. Under “advancing affordability”, DOE lists:
| Change in Notice 26-2 | Effect on a homeowner |
|---|---|
| Fuel-switching upgrades removed; HVAC and appliance rebates only for going from existing electric equipment to more efficient electric equipment | Gas, propane or oil to heat pump: generally not covered |
| HVAC and electric appliances in new construction remain allowable | New homes can still use the program |
| Insulation and air sealing required before heating and cooling upgrades, unless the home already meets a DOE-approved, state-specified level | The envelope comes first |
| Homes may keep an existing fossil-fuel system when installing a heat pump, even if the heat pump will not be the primary source | A heat pump can be added alongside a furnace |
| Other statutory measures may be considered if a state has money left after implementing the new design | Fuel switching could return in some states, at DOE’s discretion |
Programs already running had three months to adopt the changes. Rebates reserved under the old guidance may still be paid, but no new reservations may be approved for projects that do not fit the new rules.
Who can still benefit?
Households heating with electricity. Replacing electric baseboards, an electric furnace or an older heat pump with a new, more efficient heat pump is an electric-to-electric upgrade, the kind the notice keeps. For those homes the statute’s caps still apply: up to $8,000 for a heat pump for space heating and cooling, up to $1,750 for a heat pump water heater, up to $14,000 per household in total, for incomes up to 150% of area median income.
The notice’s wording on keeping a fossil-fuel system suggests another case: a home that keeps its furnace but replaces an electric central air conditioner with a heat pump. How each state treats that is for its program to decide, so confirm it before relying on a rebate.
What else is left for a gas-heated home?
- The federal tax credit is gone for heat pumps placed in service after December 31, 2025.
- State- and utility-funded programs have their own rules. Check your state energy office and your utilities.
- HOMES, the other federal program, rebates whole-home upgrades by modeled energy savings; the notice discussed here covers HEEHR only.
How do I check before signing?
Ask your state energy office, in writing if possible, whether your specific project, with your existing fuel, qualifies under the program’s current rules, and whether funds are available. Ask the contractor whether they are on the program’s qualified contractor list where one is required.