You probably think of HEEHRA as a single federal program with a single application — fill out a form, get a rebate check, install a heat pump. However, HEEHRA is actually a federally-funded but state-administered program, which means New Jersey residents apply through the New Jersey Board of Public Utilities (NJBPU) and follow a rollout schedule that looks nothing like Pennsylvania's or New York's.
That distinction matters more in New Jersey than almost anywhere else. The state has some of the highest residential electricity and natural gas rates in the country, which means a heat pump retrofit pencils faster here than in cheap-energy states — and a stacked HEEHRA-plus-utility-rebate package can cover a meaningful share of the project cost.
What is HEEHRA in New Jersey?
HEEHRA in New Jersey is the state-administered High-Efficiency Electric Home Rebate program, funded by the federal Inflation Reduction Act and run through the New Jersey Board of Public Utilities. It provides up to $14,000 in point-of-sale rebates for income-qualified households installing heat pumps, electrical panel upgrades, and other electrification measures.
How HEEHRA Works In New Jersey
HEEHRA is a point-of-sale rebate, not a tax credit. That means an approved contractor applies the discount at the time of installation — you do not front the full cost and wait for reimbursement, and you do not need a tax liability to benefit.
The program is administered by NJBPU in coordination with the New Jersey Clean Energy Program (NJCEP). Households apply through a participating contractor who has been registered with the state, and the contractor processes the rebate against the project invoice.
Eligibility is tied to Area Median Income (AMI) for the household's county — not statewide median. In high-cost counties like Bergen, Hunterdon, and Morris, the AMI thresholds are considerably higher than in Cumberland or Atlantic counties, which expands eligibility for middle-income families in expensive parts of the state.
Rebate Amounts By Measure
The federal HEEHRA framework caps rebates per measure and sets a $14,000 per-household ceiling. New Jersey adopts the federal caps without reducing them, and the program covers the following measures.
| Measure | Maximum Rebate |
|---|---|
| Air-source heat pump (space heating/cooling) | $8,000 |
| Heat pump water heater | $1,750 |
| Heat pump clothes dryer | $840 |
| Electric/induction cooktop or range | $840 |
| Electrical panel upgrade | $4,000 |
| Electrical wiring upgrades | $2,500 |
| Insulation, air sealing, ventilation | $1,600 |
| Per-household cap | $14,000 |
Keep in mind that the $14,000 ceiling is a hard cap. A household installing a heat pump, heat pump water heater, panel upgrade, and insulation could in theory claim $15,350, but the rebate would be capped at $14,000.
How much does HEEHRA pay for a heat pump in New Jersey?
HEEHRA pays up to $8,000 for a qualifying air-source heat pump in New Jersey for households at or below 80% of Area Median Income, and 50% of project cost (up to $8,000) for households between 80% and 150% of AMI. Above 150% AMI, households are not eligible for HEEHRA but may stack other programs.
Income Limits — Two Tiers
HEEHRA splits applicants into two income tiers, and the tier determines what share of the project the rebate covers. The same $14,000 ceiling applies to both tiers, but the cost-share is different.
Low-income (≤80% AMI): rebate covers up to 100% of project cost, capped at the per-measure and per-household maximums. A qualifying household can have a heat pump installed at essentially zero out-of-pocket cost up to the $8,000 cap.
Moderate-income (80–150% AMI): rebate covers up to 50% of project cost, capped at the same per-measure maximums. A $12,000 heat pump install nets a $6,000 rebate, not $8,000, because the 50% cap binds first.
For a deeper breakdown of how the two tiers behave across project sizes, see our HEEHRA income tiers explained walkthrough.
NJ-specific note. Bergen County's 2026 AMI for a family of four is substantially higher than the statewide figure, which means many middle-income suburban households fall under the 150% AMI cap and qualify for moderate-income HEEHRA. Always check the county-specific HUD AMI table, not the statewide median.
How AMI Is Calculated In New Jersey
AMI is set annually by the U.S. Department of Housing and Urban Development and varies by county and household size. New Jersey is split across several HUD metro areas, including the New York–Jersey City–White Plains HMFA (covering Bergen, Hudson, Passaic) and the Philadelphia–Camden–Wilmington MSA (covering Burlington, Camden, Gloucester).
That fragmentation matters. A household earning $135,000 in Bergen County may sit comfortably under 150% AMI, while the same household in Atlantic County would exceed the threshold. Verify against the HUD income limits table for your specific county and household size before assuming eligibility.
Application Timeline
HEEHRA in New Jersey opened in phases. The low-income tier launched first, with the moderate-income tier following on a staggered timeline as administrative infrastructure scaled.
Funds are allocated from a finite federal envelope distributed to the state. New Jersey received approximately $138 million in HEEHRA allocation, and that pool draws down on a first-come, first-served basis as projects close.
For state-by-state launch status across the country, our HEEHRA state-by-state status tracker tracks which programs are open, which are pending, and which have paused intake.
When does HEEHRA money run out in New Jersey?
New Jersey's HEEHRA allocation of approximately $138 million draws down on a first-come, first-served basis as projects close. There is no published exhaustion date, but states with similar per-capita allocations have seen heat pump funds deplete within 18 to 30 months of full launch. Apply early in the program window if the rebate is decision-critical.
Stacking HEEHRA With Other New Jersey Programs
HEEHRA is not the only rebate New Jersey residents can pursue. The state's existing energy-efficiency infrastructure includes utility-administered programs that can stack with HEEHRA when the order of operations is correct.
NJ Clean Energy Program (NJCEP): the long-running state program offers heat pump incentives through Comfort Partners (income-qualified) and the Whole House and Home Performance with ENERGY STAR pathways. These can layer with HEEHRA but the combined incentive cannot exceed total project cost.
Utility rebates: PSE&G, JCP&L, Atlantic City Electric, and Orange & Rockland each offer their own heat pump and weatherization rebates funded through the Clean Energy Future framework. Amounts vary by utility and equipment tier.
Federal 25C tax credit: the residential energy efficiency credit at 30% of cost up to $2,000 for heat pumps remains available for households across the income spectrum. For the strategic question of which to claim when, walk through our 25C vs HEEHRA decision tree.
The order in which these are applied matters because each program defines its eligible cost basis differently. Our rebate stacking application order guide walks through which to claim first to maximize the combined benefit.
Equipment Requirements
HEEHRA-eligible heat pumps must meet ENERGY STAR Cold Climate specifications in northern climate zones, which covers all of New Jersey. That means an HSPF2 of 8.1 or higher and demonstrated capacity at 5°F outdoor temperature.
This matters because not every ENERGY STAR heat pump qualifies — only those on the cold-climate list. New Jersey's design temperature ranges from roughly 10°F in the northwest highlands to 15°F at the shore, and a unit sized for milder climates will short-cycle or rely heavily on backup strip heat through January and February.
For sizing in NJ's climate, our cold-climate heat pump sizing guide walks through Manual J load calculation and capacity-vs-temperature derating curves.
Choosing Between Central And Mini-Split Configurations
New Jersey's housing stock is unusually mixed — colonial-era farmhouses, postwar Cape Cods, mid-century ranches, and dense urban rowhomes all exist within the same ZIP codes. The right HEEHRA-eligible configuration depends heavily on existing duct quality and floor plan.
Homes with leaky or undersized ducts often fare better with a ductless mini-split, while homes with tight, well-designed ducts can use a central air-source heat pump and reuse the existing distribution. Our mini-split vs central heat pump comparison covers the tradeoffs in depth.
Common Pitfalls For New Jersey Applicants
The most common HEEHRA mistakes are administrative, not technical. Households assume eligibility based on statewide income figures, hire a non-registered contractor, or sign a contract before the rebate is locked in.
Using a non-registered contractor. The rebate is processed by the contractor, not the homeowner. Hiring an installer who is not on the NJBPU participating-contractor list disqualifies the project from HEEHRA, even if every other eligibility criterion is met.
Skipping the load calculation. An ACCA Manual J load calculation is required to size the heat pump correctly and to support the rebate application. Rule-of-thumb sizing — replacing a 100,000 BTU furnace with a 100,000 BTU heat pump — almost always over-sizes the unit, which hurts efficiency and can fail the program's performance requirements.
Stacking incorrectly. Some utility programs require pre-approval before installation. Locking in HEEHRA first and then trying to add a utility rebate after the project closes often disqualifies the utility portion.
What HEEHRA Does Not Cover
HEEHRA is restricted to the measures listed in the federal statute. It does not cover solar PV, battery storage, geothermal heat pumps, or generator installations.
It also does not cover repairs to existing equipment, like servicing an old furnace or recharging an existing AC. The program is strictly for new installations of qualifying high-efficiency electric equipment.
Definitions And Background Information On HEEHRA In New Jersey
Is HEEHRA the same as the Inflation Reduction Act?
HEEHRA is one of two rebate programs created by the Inflation Reduction Act. The other is the Home Efficiency Rebates program (HOMES), which is performance-based rather than measure-based. New Jersey administers both.
Can renters apply for HEEHRA in New Jersey?
Single-family rental properties are eligible if the property owner applies and meets income criteria based on tenant income. Multifamily buildings have a separate eligibility track with different income-verification rules.
Does HEEHRA require an energy audit?
An energy audit is not federally mandated for HEEHRA, but New Jersey may require a load calculation and pre-installation inspection depending on the measure. The HOMES rebate, by contrast, does require modeled energy savings.
What if my income changes during the application?
Eligibility is determined based on income at the time of application, typically using the most recent tax year. Mid-project income changes do not retroactively disqualify the rebate once the project has been approved.
How do I find a participating contractor?
The New Jersey Board of Public Utilities maintains a published list of registered HEEHRA contractors on the NJ Clean Energy Program website. Confirm registration before signing any contract — verbal claims of participation are not enough.
The Bottom Line For New Jersey Households
New Jersey is one of the better states in which to pursue HEEHRA. Energy costs are high enough that a heat pump retrofit pencils on its own merits, AMI thresholds are generous in the northern counties, and the state has functional administrative infrastructure to process rebates without the long delays seen elsewhere.
The two decisions that matter most are timing and contractor selection. Apply early while the funding pool is still healthy, verify your contractor's NJBPU registration before signing anything, and run the stacking math with 25C and your local utility rebate before locking the project scope.
This article is for informational purposes and is not financial, tax, legal, or medical advice. Consult a licensed professional (CPA, HVAC contractor, or your state energy office) before acting. Rebate amounts, income thresholds, and program availability change frequently — verify current figures with the New Jersey Board of Public Utilities before committing to a project.