Heat Pump Rebate Program

HEA is proud to support incentives for early-adopting members transitioning to efficient heating systems in our service territory. As heat pumps have increased in efficiency, they can now be a more economical heat source than fuel oil or propane (and have always been more efficient than forced-air electric furnaces, electric baseboards, and electric space heaters).

Members can access rebates of up to $1,000 for the purchase and installation of a qualified heat pump. Act now, as rebates for this program are limited. In addition to the rebates, members can use HEA’s low-interest line-of-credit as they’ve long been able to for any electrical appliances.

Member/homeowners can receive a $500 on-bill credit to install a qualifying energy-efficient heat pump. HEA offers an additional $500 rebate check to a licensed plumbing/HVAC or general contractor installing a heat pump for a member.

How Do Heat Pumps Work?

Heat pumps function like refrigerators – they move heat “uphill” from the cold outside air (or water or soil) to the inside of your home. There are also heat pump water heaters to create domestic hot water, and those may make sense for your household, but they are outside this incentive program.

How Do I Know If a Heat Pump is Right for Me?

You can ask some general contractors or HVAC/plumbing firms about the performance and cost savings you might realize from switching to a heat pump or specifying one in new construction. There are also online heat pump calculators, including one for Alaska at Heat Pump Calculator.

Heat pumps make more sense for households or small businesses that:

  • Have high fuel costs (propane or heating oil – especially south of K-Bay),
  • are in milder climates (e.g., the “banana belt” around Homer versus Sterling’s colder winter),
  • desire air conditioning in the summer (as some heat pumps function as A/C as well),
  • currently have an old, inefficient heating system – especially an electric one, or
  • have a significant heating demand in a large structure.

At 2022 prices in Alaska, heat pumps usually won’t save you much money if your space and water heating are from natural gas.  

What is a “Mini-Split” Heat Pump?

Mini-split heat pumps are a rapidly expanding portion of the market. “Mini” refers to a unit that heats/cools primarily one typically large room in a house versus a whole-house system. “Split” means that, unlike a window air-conditioner in one unit, there are two primary components – an outdoor air handler that extracts energy from the outside air and an indoor air handler that circulates warm air around the room. The two units have a high-pressure refrigerant, often R410A, circulating between them. The need to evacuate that loop to a high vacuum, test for minor leaks, and charge it with refrigerant requires experience and equipment beyond most homeowners.  

What Other Types of Heat Pumps are There?

Some heat pumps come as sealed units, often usually CO2 internally as their refrigerant. 

The entire unit is installed outside your house, and a plumbing loop of water connects it to your existing hot water heater, hydronic baseboards, or a radiant slab. As the refrigeration unit comes pre-assembled and pre-charged (like every refrigerator you’ve ever bought), it can be more easily installed by a homeowner with more straightforward plumbing and electrical skills.  

Heat pump manufacturers include Trane, Lennox, Mitsubishi, Sanyo, Daikin, Mr. Cool, and Honeywell. Some are distributed through licensed HVAC firms or plumbing supply houses, while others are marketed directly to homeowners. Some units are sold on Amazon – we recommend members assess if they have the skills and equipment to install and charge such units and inquire in advance of any licensed installers they hope to use to confirm that they are able and willing to work on such units.  

Note that within Soldotna and Kenai City limits, you are typically required to obtain a building permit before doing plumbing or electrical work and to have your work inspected. Talking to a building official in advance can provide valuable guidance to ensure you meet all current code requirements.

Air Source Heat Pumps ENERGY STAR Federal Tax Credit 

For heat pumps, ENERGY STAR offers a general certification and a cold climate certification. This tax credit is effective for products purchased and installed between January 1, 2023, and December 31, 2032. Click HERE to learn more about the tax credit.

How do I Apply?

To be eligible for a rebate, you must complete HEA’s Heat Pump Rebate Application and have your vendor submit a W9 before installing the heat pump. If you also seeking low-interest financing from HEA to purchase the heat pump, complete a Line of Credit Application. Don’t hesitate to contact HEA to determine if your vendor participates in this program.


Submit your applications to a HEA location or email the completed applications to heatpumps@homerelectric.com.

However, please apply before purchasing any heat pump to be eligible for a rebate.  

Program rules:

  1. Provides $500 to the member resident/business installing a qualified heat pump for space heating through on-bill credit.
  2. Pays $500 to an installer located in HEA’s service territory and licensed as a plumbing/HVAC or general contractor.
  3. Any tax liability arising from such payment shall be the sole responsibility of the member(s).
  4. HEA will file an IRS 1099 form for amounts exceeding the reporting limit (currently $600/year).
  5. Member acknowledges that HEA will collect anonymous electric usage.
  6. Member agrees to update HEA with heating fuel usage after heat pump installation.
  7. Installations are subject to inspection by HEA staff. South-of-Kachemak-Bay inspections may be grouped monthly. The installer should call/email HEA for inspection.
  8. It is limited to the first 20 systems to submit applications and be installed. Additional applicants will be waitlisted.
  9. Installations not completed within 90 days of application will be discarded, and waitlisted applicants will be accepted.

Question regarding the program, call or visit our office.
Phone: 907-235-8551 or 907-283-5831 or email us at heatpumps@homerelectric.com.