If you've been pitching a HEEHR rebate to a customer thinking about swapping their gas furnace for a heat pump, it's worth pausing on that pitch. The Department of Energy issued updated guidance on May 29, 2026, for its two federally funded Home Energy Rebates programs, and the change quietly closes off exactly that scenario.
The programs in question — the Home Owner Managing Energy Savings Rebates, known as HOMES, and the High-Efficiency Electric Home Rebate Program, known as HEEHR — are backed by a combined $8.8 billion in Inflation Reduction Act funding. HOMES offers rebates for whole-home energy efficiency upgrades, including HVAC, with the rebate amount tied to verified or modeled energy savings; homeowners can receive up to $8,000 based on a minimum 20% savings threshold. HEEHR offers up to $14,000 in rebates for qualifying efficient electric equipment, often available directly at the point of sale through participating retailers and contractors.
The Change That Actually Matters to Your Sales Process
Here's the specific shift: DOE's new guidance ends the ability for households to use HEEHR rebates when replacing fossil-fuel-fired appliances with electric alternatives. Instead, the program now restricts rebates to upgrading existing electric equipment to more efficient electric equipment. A homeowner currently heating with electric resistance who wants to upgrade to a heat pump still qualifies. A homeowner currently heating with gas, propane, or oil does not — that fuel-switching pathway, which used to be one of HEEHR's central selling points, has been removed.
There is a meaningful carve-out worth knowing: dwellings with existing fossil-fuel HVAC systems can keep them in place even if a heat pump installed elsewhere in the home doesn't become the primary heat source, and electric HVAC in new construction remains fully allowable. So the door isn't completely shut on gas-heated homes — it's just narrower than it was.
Why DOE Made This Change
The shift comes down to a statutory interpretation question. HEEHR was authorized under Section 50122 of the Inflation Reduction Act, which describes the program's purpose around "qualified electrification projects." DOE's new guidance reads that language narrowly — electrification, in this framing, means upgrading electric-to-electric, not switching fuel sources. Critics, including the Sierra Club, have pushed back hard, arguing the change undercuts the program's most impactful use case: a homeowner trading a gas furnace for an efficient heat pump is exactly the kind of high-savings upgrade the rebate was designed to encourage in the first place.
ACCA has found a silver lining in the change, noting it may actually spur more interest in dual-fuel systems — pairing a heat pump with an existing gas furnace as backup — which the association has long argued is often the most cost-effective and practical solution for a lot of homes anyway, particularly in colder climates.
What Else Changed, Quietly
Beyond the fuel-switching restriction, DOE's guidance made the ENERGY STAR equipment requirement optional rather than mandatory for states to enforce, removed a 40% funding set-aside that had been reserved for disadvantaged communities under HOMES, and eliminated several state planning and outreach requirements tied to diversity, equity, and inclusion mandates. The guidance also restored the program names assigned in the original statute, after both programs had been operating under different working titles.
