The High-Efficiency Electric Home Rebate Act caps a heat pump rebate at $8,000 and caps everything a single household can claim at $14,000, and those ceilings are written into federal statute — they do not shift when you cross the Red River. What does shift in Texas is nearly everything on the other side of the payback equation: who administers the money, what a kilowatt-hour actually costs you, and what equipment you are replacing.
Texas is the largest state still missing from our HEEHRA state guide coverage, and it is the one where the Northeast playbook translates worst. A model tuned for ConEd or Eversource territory assumes a regulated monopoly tariff on the cost side and a gas furnace on the equipment side, and across most of Texas neither assumption holds.
HEEHRA caps heat pump rebates at $8,000 inside a $14,000 household total. Texas households below 80% of area median income qualify for 100% of project cost up to the cap; households between 80% and 150% AMI qualify for 50%.
What HEEHRA Actually Pays For
HEEHRA — the electrification and appliance rebate half of the federal rebate package — is a per-measure program with a household ceiling stacked on top. The caps below are federal and identical in every state, which means the amount a Texan can claim is not the variable; eligibility and timing are.
| Measure | Federal rebate cap |
|---|---|
| Heat pump (space heating and cooling) | $8,000 |
| Electrical panel upgrade | $4,000 |
| Electrical wiring | $2,500 |
| Heat pump water heater | $1,750 |
| Insulation, air sealing, and ventilation | $1,600 |
| Electric stove, cooktop, range, or oven | $840 |
| Heat pump clothes dryer | $840 |
| Household maximum | $14,000 |
Keep in mind that these are ceilings, not entitlements — the rebate is capped at your income-tier percentage of the actual project cost, so a $6,000 heat pump install never yields an $8,000 check. The panel and wiring lines matter more in Texas than they look on paper, because a house built around a gas furnace and a 100-amp service often needs both before a heat pump and a heat pump water heater can share the load.
The Income Tiers Are A County Question, Not A State Question
HEEHRA splits households into three groups by area median income: below 80% AMI, between 80% and 150% AMI, and above 150% AMI. The first group is eligible for 100% of project cost up to the caps, the second for 50%, and the third is not eligible for HEEHRA at all.
The trap in Texas is that AMI is a HUD figure set at the county or metropolitan-area level and adjusted for household size, and Texas contains an unusually wide spread of local medians. The 80% line for a family of four in Harris County is a different number than the same line in Lubbock County or in the Permian Basin counties, where energy-sector wages pull the median up.
HEEHRA income tiers are measured against HUD area median income for your county or metro, adjusted for household size. Do not use a statewide Texas figure — the 80% and 150% thresholds move county by county.
Because the tier determines whether you are looking at a full-cost rebate, a half-cost rebate, or nothing, this is the first number to pin down and the one most often guessed at. Our breakdown of how HEEHRA income tiers are calculated walks through the household-size adjustment and where the published limits live.
Who Administers HEEHRA In Texas
HEEHRA money is federal, but the program is state-administered, and in Texas the state energy office is the State Energy Conservation Office (SECO), which sits inside the Texas Comptroller of Public Accounts. Every operational detail — contractor qualification, application portal, income-verification method, whether the rebate arrives at point of sale or afterward — is set at that level.
Program launch timing, enrollment windows, and contractor requirements are controlled by SECO and change without much notice. Verify current status directly with SECO before you sign a contract or assume a rebate is available on your install date.
The second structural fact about Texas is what is absent. There is no statewide residential efficiency program analogous to Mass Save or NYSERDA sitting behind the federal money, so for most Texas households the stack is HEEHRA plus a federal tax credit plus whatever a local utility happens to offer — and the local layer is thin and inconsistent.
Municipal utilities and electric cooperatives are where residential heat pump incentives actually live in Texas, and they vary enormously by service territory. This is closer to the pattern we mapped in Georgia than to anything in New England: one meaningful utility program if you happen to be in the right footprint, and nothing if you are not.
What ERCOT's Deregulated Market Does To Your Payback Math
Most of Texas sits inside ERCOT, and most of ERCOT is a competitive retail market — you select a retail electricity provider and a plan rather than being handed a single regulated tariff. That means the cents-per-kilowatt-hour figure in the denominator of your payback calculation is a variable you control, which is not true anywhere in the Northeast.
In competitive ERCOT areas you choose your retail provider, so the ¢/kWh in your heat pump payback is a number you can shop. Switching to a better-matched plan can move operating cost more than a one-point SEER2 upgrade will.
The practical consequence is that two identical houses on the same street, with identical heat pumps, can post materially different heating bills purely because of plan selection. The PUCT's Power to Choose comparison site is the starting point, but the plan that wins for a heat pump home is rarely the plan that wins for a gas-heated one.
This is because a heat pump changes your load shape, not just your load. A cold-snap heating load in Texas peaks in the pre-dawn hours, which interacts very differently with a free-nights plan, a time-of-use plan, and a flat-rate plan — and the plan comparison tools are not built to model that shape for you.
Retail choice is not universal in Texas. Municipal utilities such as Austin Energy and CPS Energy, along with most electric cooperatives, did not opt into the competitive market — if you are served by one of them, your rate is set by that utility and the shopping lever does not exist.
The Texas Baseline Problem — What You Are Actually Replacing
Federal rebate math is uniform across states; retrofit economics are not, and the single biggest driver is what the heat pump displaces. Texas is unusual because a large share of its housing stock already heats with electricity, and much of that is electric resistance strip heat paired with a central air conditioner.
That combination is the best payback case in the country. Electric resistance heat delivers roughly one unit of heat per unit of electricity by definition, while a modern variable-speed heat pump operating in a mild Texas winter routinely delivers three or more — the same comfort for roughly a third of the kilowatt-hours.
Replacing electric resistance strip heat with a heat pump is the strongest payback case in Texas. Resistance heat runs at a COP near 1; a variable-speed heat pump in Texas winter conditions commonly runs at 3 or better.
The gas-heated Texas home is the harder case. Natural gas is cheap in Texas, winters are short, and the annual heating bill being displaced is small — so a fuel-switch payback measured only against gas savings can stretch out uncomfortably far.
What rescues that math is the cooling side. Nearly every Texas home already has central air conditioning and will replace that condenser on a 12-to-18-year cycle regardless, and the incremental hardware cost of a heat pump over a straight AC replacement is modest — the compressor, coil, and lineset are shared, and what you are adding is a reversing valve, a defrost board, and controls.
Measured that way, the honest question in a gas-heated Texas home is not whether a heat pump pays back against a furnace over twenty years. It is whether the small incremental cost of making the air conditioner you are buying anyway run in reverse is worth the rebate that comes with it, and at an $8,000 cap the answer changes.
Sizing For A Cooling-Dominant Climate With A Winter Tail
Texas inverts the sizing problem we have written about for the Northeast. In a cold climate, the heating load governs and the risk is a unit too small for January; in Texas, the cooling load governs almost everywhere, and the risk is a unit sized for August that spends winter badly oversized and short-cycling.
ACCA Manual J 99% winter design temperatures across most of the Texas population centers land roughly in the 20s and low 30s Fahrenheit, well inside the range where a modern variable-speed heat pump holds most of its rated capacity and efficiency. The Panhandle is the exception, with design temperatures far colder than Houston or San Antonio, and a Panhandle install should be specified more like the cases in our cold-climate heat pump sizing guide than like a Gulf Coast one.
Texas is cooling-dominant, so the load calculation is driven by summer, not winter. The failure mode is an oversized unit that short-cycles through mild months — run a real Manual J rather than a tons-per-square-foot rule of thumb.
Note that a rule-of-thumb sizing — one ton per 500 square feet, or whatever the contractor's habit is — reliably oversizes in Texas, because the modern envelope, the shading, and the duct location all move the answer. Pull your own numbers through our heat pump load calculator before you accept a proposal, and ask any contractor bidding the job to show you their Manual J output rather than describe it.
Backup Heat, Balance Point, And The ERCOT Winter Peak
The grid concern people raise about heat pumps in ERCOT is real, but it is misattributed. The heat pump itself is a modest, modulating winter load; the spike that stresses the system is the electric resistance backup strip firing across tens of thousands of homes at the same pre-dawn hour during a cold snap.
Winter Storm Uri in February 2021 is the reference event, and the lesson it left for equipment selection is a controls lesson. Whether your strips engage at 40°F or at 25°F is a configuration choice, and most installers leave it at a factory default that is far more conservative than a Texas climate requires.
Getting this right is the difference between a heat pump that runs efficiently through a Texas cold front and one that quietly reverts to resistance heat every time the thermostat sees a two-degree droop. Our guides to balance point controls and heat pump backup heat cover the lockout settings and staging logic worth specifying in the contract, not discovering in February.
Stacking HEEHRA With Federal Tax Credits
Texas has no state income tax, which means there is no state-level credit layer under the federal one — the tax side of your stack is entirely federal. That simplifies the picture and also removes a cushion that Northeast households take for granted.
The stacking rule to understand is a basis rule. A HEEHRA rebate reduces what you actually paid, and a tax credit is computed on the net cost after the rebate rather than on the sticker price, so the two do not simply add.
For households near the 150% AMI line, the sequencing question is genuinely live, and it is worth walking through our 25C versus HEEHRA decision tree and the mechanics in HEEHRA and 25C stacking before committing. Because the standing of the federal credits has moved recently, confirm the current position on our federal tax credits status page rather than relying on a figure quoted in an older article.
A Decision Rule, By Where You Are
The right next step depends less on your opinion of heat pumps than on which phase of the decision you are in. Here is how the Texas-specific factors sort out by phase:
- Pre-purchase, still deciding. Establish two numbers before anything else — your county's HUD AMI threshold, and what you currently heat with. A resistance-heat household and a gas-furnace household are looking at completely different payback cases from the same rebate.
- Equipment failed, replacing under time pressure. Compare the heat pump bid against the straight AC replacement bid, not against doing nothing. The incremental delta is the number the rebate is offsetting.
- Rebate application in progress. Confirm with SECO that your contractor is qualified under the state's program rules, because a rebate is routinely lost on contractor eligibility rather than on equipment eligibility.
- Equipment installed, optimizing operating cost. This is where the deregulated market pays you back. Re-shop your retail plan against your new winter load shape, and verify the balance point and strip lockout your installer actually programmed.
All of the above adds up to a simple framing: in Texas the federal rebate is fixed, and the variables that determine whether the project is worth doing are local — your county's AMI line, your existing heating fuel, your retail plan, and your installer's controls settings. Those are the four levers, and three of them are still in your hands after the equipment is on the pad.
Frequently Asked Questions
Is HEEHRA available in Texas right now?
Texas's share of HEEHRA is administered by the State Energy Conservation Office (SECO), which sits within the Texas Comptroller of Public Accounts. Rollout timing, enrollment windows, and contractor qualification rules are state-controlled and change, so confirm current status directly with SECO before signing a contract or ordering equipment.
How much can a Texas household get for a heat pump under HEEHRA?
The heat pump measure is capped at $8,000, inside a $14,000 total household cap covering panel upgrades, wiring, water heaters, insulation, and appliances. Households under 80% AMI can have 100% of project cost covered up to those caps; households between 80% and 150% AMI can have 50% covered.
Does Texas's deregulated electricity market change my payback?
In competitive ERCOT areas, you select your retail provider and plan, so the electricity price in your payback calculation is something you can shop rather than a fixed tariff. Municipal utilities and most co-ops sit outside the competitive market, and in those territories the rate is set for you.
Will a heat pump actually keep up during a Texas cold snap?
Design temperatures across most Texas metros sit well inside the operating range of a modern variable-speed heat pump, with the Panhandle as the notable exception. The failure mode during an extreme event is usually backup resistance strips engaging far earlier than they need to, which is a balance-point and lockout configuration issue.
I have a gas furnace. Is a heat pump still worth it in Texas?
Measured only against cheap Texas gas over a short heating season, the fuel-switch savings alone are modest. The stronger framing compares the heat pump bid against the central air conditioner replacement you were going to buy anyway, where the incremental hardware cost is small relative to the $8,000 rebate cap.
Can I claim HEEHRA and a federal tax credit on the same heat pump?
A rebate reduces your cost basis, so any federal tax credit is calculated on the net amount you actually paid rather than on the pre-rebate price. Texas has no state income tax and therefore no state credit layer, so the federal position is the whole tax side of the stack.
Where To Go Next
If you are working the Texas case, the two documents that decide it are your county's HUD income limit and your existing utility bill — everything downstream, including which rebate tier you land in and how fast the project pays, follows from those. Start with the HEEHRA state guide hub to compare Texas against the states we have already mapped, and run your own load numbers through the heat pump calculator before you take a contractor's sizing on faith.
This article is for informational purposes and is not financial, tax, legal, or medical advice. Consult a licensed professional (CPA, elder-law attorney, HVAC contractor, state Medicaid office) before acting.