According to the International Energy Agency (IEA), widespread adoption of heat pumps is essential for reaching ambitious emissions-reduction goals around the globe. National, state, and local agencies echo this sentiment. More importantly, many are offering generous incentives to help homeowners make this transition. If you’re looking for an eco-friendly and affordable way to heat and cool your Cleveland, OH home, heat pump installation is an excellent choice. Read on to explore the many rebates, tax credits, and other savings for Ohio residents installing heat pumps.
Federal Tax Credits
Federal tax credits won’t immediately impact your upfront spending on heat pump installation in Cleveland. What they will do is offset your year-end tax debt or add to your tax return. These are funds that homeowners can claim when installing qualifying heat pumps before stated deadlines.
Many of the top tax credits available for heat pump installation are offered under the 2022 Inflation Reduction Act. To qualify for these credits for the 2025 tax year, you must complete these installations before December 31, 2025.
Energy-Efficient Home Improvement Credit
With the Energy-Efficient Home Improvement Credit, you can claim up to 30% of the cost of heat pump installation or up to $3,200. Eligible heat pump types include both ducted and ductless air-source heat pumps with qualifying efficiency ratings as set by the Consortium for Energy Efficiency (CEE).
Unfortunately, the Energy-Efficient Home Improvement Credit is on its way out in 2026. This credit was extended through 2025 by the One Big Beautiful Bill Act (OBBBA), but will not apply to any heat pumps installed January 1, 2026, or later.
Residential Clean Energy Credit
If you aren’t interested in installing an air-source heat pump, you can opt for a qualifying geothermal heat pump instead and still enjoy year-end tax savings. With the Residential Clean Energy Credit, you can claim up to 30% of your installation costs when filing your taxes.
However, like the Energy-Efficient Home Improvement Credit, this credit is on its way out in 2026. It will not be available for geothermal heat pumps installed after December 31, 2025.
State Incentives
State incentives for heat pump installation are limited to the High-Efficiency Electrical Home Rebate Act (HEEHRA). This program operates with funding from the U.S. Department of Energy (DOE), and is still awaiting DOE approval for its program application. Once approved, HEEHRA will provide point-of-sale rebates for income-qualified applicants.
For qualifying low-income homeowners, HEEHRA funding could cover as much as 100% of heat pump installation costs. HEEHRA will provide rebates of up to 50% of heat pump installation cost for qualifying moderate-income applicants. The maximum rebate for a single applicant is $14,000.
Rebates From Ohio’s Utility Companies
You may be qualified to receive rebates from your utility company for heat pump installation as well. You can visit the website of your utility service provider to learn all about new and forthcoming savings opportunities.
American Electric Power (AEP) Ohio
American Electric Power (AEP) Ohio has an impressive range of ongoing rebate opportunities for home efficiency upgrades. These include incentives for heat pump installation.
For qualifying applicants, AEP Ohio will provide reimbursements of up to $8,000 for heat pumps under its Home Efficiency Rebates (HOMES) program. AEP Ohio is additionally offering an instant $75 discount for smart thermostat installation. Installing a smart thermostat is an excellent way to enhance the energy savings of a new heat pump. AEP Ohio customers can also apply for free home energy assessments and other support to refine their installations and ensure program qualification.
Duke Energy’s Smart Saver Program
Homeowners can obtain rebates for qualifying HVAC system upgrades via Duke Energy’s Smart Saver Program. For eligibility, Duke Energy’s customers must have their new equipment installed by licensed HVAC companies.
Dominion Energy Ohio
Customers of Dominion Energy Ohio can apply for rebates of up to $650 when installing energy-efficient heat pumps. To qualify, applicants must choose ENERGY STAR-rated appliances and have them installed by licensed HVAC companies.
FirstEnergy/Cleveland Electric Illuminating Company
FirstEnergy serves Cleveland locals via Cleveland Electric Illuminating Company, its subsidiary. Customers can apply for rebates of up to $500 when installing qualifying, ductless or ducted air-source heat pumps.
How to Make the Most of Ohio Heat Pump Incentives
Homeowners can often pair several federal, state, local, and utility-issued incentives at once to optimize their savings. Many of the available offers are backed by limited funding and are issued on a first-come, first-served basis.
Choose Qualifying Equipment
To ensure your chances of funding approval, always learn the equipment requirements for qualification. Some offers are reserved for air-source heat pump installation, while others may require either ducted or ductless units.
Opt for Professional Installation
A licensed, local HVAC Company can help you make the most of the available funding offers in your area. Local HVAC companies can help you choose heat pump models with the right efficiency ratings for each offer. Most rebates and other incentives require professional installation to ensure lasting value and efficient performance.
Complete Application Processes Right Away
Don’t put heat pump installation off, especially if you want to leverage federal tax credits. Complete your heat pump installation before 2025 comes to an end. Whether applying for state, federal, or local incentives, complete all mandatory application processes right away. Submitting complete and accurate applications in a timely fashion will give you an edge when funding is offered on a first-come, first-served basis.
Take Advantage of Contractors’ Specials, Discounts, and Financing Offers
Don’t overlook potential savings available through your heat pump installer. Look for specials, discounts, and financing offers.
Other Ways a Heat Pump Can Help You Save
In addition to providing access to many high-value incentives, heat pumps can help you save in other ways. Heat pumps leverage a highly efficient heat transfer process that trumps the efficiency of other heating and cooling system types.
Lower Utility Bills
Replacing a gas-fired heater with an electric heat pump could result in significant energy savings from year to year. With a hybrid heat pump, you can enjoy efficient heating during times of moderate winter weather and temperature extremes.
A Single System to Install and Maintain
When you use a heat pump for year-round climate control, you’ll have less HVAC equipment to install, repair, and maintain. In some cases, having just one HVAC equipment type can result in significantly lower maintenance fees overall.
Better Humidity Regulation and Improved Indoor Air Quality
With the even, radiant heat that these appliances supply, you can heat your home without creating overly dry indoor air. Unlike gas furnaces, heat pumps don’t produce harmful emissions, and they don’t introduce residual gaseous chemical contaminants into living spaces. This allows for higher indoor air quality. With year-round humidity control, transitioning to a heat pump could eliminate the need for a whole-house dehumidifier or other integrated IAQ accessories.
Anderson Heating, Cooling, Plumbing & Electric proudly serves Cleveland and the surrounding areas with top-notch heat pump installation, maintenance, and repair services. We offer ongoing discounts and specials. We also provide financing on approved credit via Synchrony, our third-party funding partner. To take advantage of Ohio rebates and other incentives for heat pump installation, contact Anderson Heating, Cooling, Plumbing & Electric today!
