To Maximize Heat Pump Rebates, Look for High HSPF Ratings

Just because a heat pump has a high SEER rating doesn’t mean it will automatically qualify for state and local rebates when installed in a cold climate.

Before I talk about a technical hurdle to heat pump “democratization,” let me first make clear that cold-climate heat pump technology works. The technology is mature. Engineering innovation means that they not only beat oil and gas performance, they’re vastly less expensive to operate than electric resistance systems.

I have to call this out, because, as an article in the Washington Post last week pointed out, misinformation funded by the oil and gas industry aims to slow the meteoric transition to electric heat pumps. Critics suggest, for example, that heat pumps can’t handle extremely cold weather below about 10 degrees Fahrenheit.

New heat pumps don’t suffer from the same narrow range of operation that early technology did. The Post notes that:

“Experts say many of these [false] claims are exaggerations and that the handful of legitimate issues the site raises can be addressed through proper installation and design. Heat pumps do work in cold weather. Although their efficiency declines in subzero temperatures, today’s models can provide heat even at minus 15 degrees.”

Better technology, such as variable speed inverter-driven motors, are part of the reason for this improvement. Some companies, such as Carrier, also employ optimized algorithms to tweak performance still more. Operation in cold climates requires a careful dance with the weather. For example, units must be able to respond to snow or freezing water blocking compressor coils by triggering a temporary defrost cycle.


Top-of-the-line equipment such as Carrier’s Infinity 24 Heat Pump qualifies for both ENERGY STAR credits and most state rebates for cold climate heating.

Incentives for Conversion

For many in the energy efficiency arena, heat pumps offer one of the easiest paths to reduce the operational CO2 footprint of homes. Two of the best tools for speeding adoption are financial: rebates and tax incentives. Federal tax credits are easy. The threshold for qualification set by ENERGY STAR is easily achievable with most newer heat pumps. Rebates, because they are more local and varied, can be trickier to obtain.

Last summer, for example, I installed a 22 SEER heat pump in Maine, assuming (incorrectly) that it would easily qualify for my local Efficiency Maine rebate of about $400.

What I hadn’t considered is the fact that a heat pump can operate super efficiently for cooling, but not rate as highly for heating

The latter ratings fall under a different metric, called the Heating Seasonal Performance Factor (HSPF2), which is a measure of a heat pump's overall energy efficiency during the heating season. Efficiency Maine requires that a heat pump perform at AHRI-rated HSPF of 12.0 or greater for systems with 1 indoor unit. That’s a high bar. My 12,000 Btu, 22 SEER unit’s HSPF2 was around 9.6, and the credit was denied.

The current rating systems for heat pumps market are a bit of a “Wild West” right now. New brands keep popping up online, many of them without any official HSPF2 ratings. This can steer buyers to a lower-cost unit that has a mediocre HSPF2 ratings. Incidentally, HSPF and HSPF2 ratings rate performance slightly differently, but the general concept is the same. The manufacturer may call out the unit’s high Seasonal Energy Efficiency Ratio (SEER2) or Energy Efficiency Ratio (EER2), but in cold climates, the HSPF2 is the key performance indicator.

This year, ratings methods may be in flux. In 2023, incentives for heat pump installation are changing somewhat.

Note also that this may affect builders who hope to earn a tax credit for producing ENERGY STAR certified new homes. That’s a topic for another article, however, because builders must demonstrate the overall energy footprint of the home, not just its heat pumps. If you are a builder of high-performance homes, however, be sure to take advantage of potential IRS deductions for 2023.

Planning for Rebates: Perks and Limitations

Identifying heat pump rebates at the State and utility level can be frustrating. For example, you can find several contractors advocating big rebates in Florida from Florida Power & Light, but the FPL weblinks are dead, and the rebates seem to have vanished. Of course, this company, like many other utilities, has been embroiled in scandals, so it’s no surprise that some of their programs have “gone dark.”

One resource that seems to update with decent frequency is DSIRE. They list not only state-level credits and rebates but also federal ones.

What’s the best plan for purchasing heat pumps this year? Instead of buying HVAC products and backtracking to find out if they qualify for rebates and credits, research all of the local and state benefits in your region first.

One challenge for builders hoping to pitch their clients on heat pump upgrades is that rebates often hang on income levels. Most people able to afford building a new home may not qualify for these larger rebates. 

According to Consumer Reports, households making less than 80 percent of a state’s median household income may get 100 percent of available rebates, while. homeowners who make more than 150 percent of a state’s median income might get nothing.

Rebates or not, heat pumps offer one of the most energy- and cost-efficient methods of heating available for cold climates, rivaled only by geothermal systems. The biggest financial savings will occur over the life of the equipment, as it heats the home. Opt for the highest efficiency equipment, with the most comprehensive warranty.


Earning tax credits under ENERGY STAR is fairly easy, compared to some state rebates that require a higher HSPF2 rating, where most want a score above 10.6 or so.


How ENERGY STAR Tax Credits Work

The latest requirements for heat pumps in Cold Climates (to earn a 30% federal tax credit) are as follows:

Ducted systems: EER2 > 10

Mini Splits: SEER2 > 16, EER2 > 9, and HSPF > 9.5 are eligible. 

A tax credit works like this: On a $3,000 heat pump installation, for instance, the 30% tax credit of about $900 is deducted from the homeowner’s income tax for the fiscal year.