Tennessee Heat Pump Rebates

What's available in Tennessee

Tennessee's heat pump incentive landscape is dominated by the Tennessee Valley Authority's EnergyRight program, delivered through more than 150 Local Power Companies including NES, EPB Chattanooga, KUB, MLGW, and Middle Tennessee Electric. As of September 2026 EnergyRight pays $500 for a 15-16.99 SEER2 air-source or dual-fuel heat pump, $800 for 17 SEER2 or higher, $800 for a 17 SEER2+ ductless mini split, and $1,500 for geothermal, all installed by a Quality Contractor Network member; the former $900 heat pump water heater rebate no longer appears on EnergyRight's site. EnergyRight's rebates have historically required replacement of existing electric heating, leaving most Nashville and Memphis homes on natural gas waiting for HEAR. Several LPCs (KUB, Clarksville Department of Electricity, Middle Tennessee Electric, and others) also operate on-bill heat pump loan programs of up to $7,500-$10,000 over 10 years. Tennessee's IRA-funded HEAR program (about $83.4M total allocation, up to $8,000 per heat pump for income-qualified households) had not launched as of our last confirmed check and we could not confirm a launch as of September 2026. The federal §25C tax credit expired December 31, 2025.

HEEHRA in Tennessee

HEEHRA rebate: Point-of-sale rebate up to $8,000 for households at or below 80% of area median income. Funded by the IRA, administered by each state. Tennessee is finalizing program rules.

How heat pump rebates work in Tennessee

Tennessee's heat pump incentive landscape is dominated by the Tennessee Valley Authority's EnergyRight program, delivered through more than 150 Local Power Companies including NES, EPB Chattanooga, KUB, MLGW, and Middle Tennessee Electric. EnergyRight offers two air-source heat pump tiers: $500 for 15-16.99 SEER2 equipment and $800 for 17 SEER2 or higher (air-source or dual fuel). There is no separate cold-climate or 'preferred' tier; the $1,500 figure applies only to geothermal systems. A single install qualifies for one tier based on its SEER2 rating. EnergyRight's former $900 heat pump water heater rebate no longer appears on its site as of September 2026. These rebates require replacement of existing electric heating, leaving most Nashville and Memphis homes on natural gas waiting for HEAR. Several LPCs (KUB, Clarksville Department of Electricity, Middle Tennessee Electric, and others) also operate on-bill heat pump loan programs up to $7,500-$10,000 over 10 years. Tennessee's IRA-funded HEAR program (~$83.4M total, up to $8,000 per heat pump for income-qualified households) is approved but had not launched statewide as of April 2026.

Tennessee rebate programs

6 utility-specific programs not shown here. Enter your ZIP in the calculator to filter to just your utility.

A worked example: cold-climate heat pump in Knoxville

Wesley owns a 1,800 sq ft home in Knoxville served by KUB (Knoxville Utilities Board, a TVA Local Power Company). He currently heats with electric resistance baseboards (no central HVAC). He gets quotes for a 3-ton ducted cold-climate air-source heat pump (Mitsubishi Hyper Heat H2i, NEEP cold-climate certified, ≥100% capacity at 17°F) installed at $15,400 including new ductwork. Because the install replaces existing electric heating with a cold-climate-certified heat pump using a QCN (Quality Contractor Network) installer, he qualifies for the TVA EnergyRight 17 SEER2+ heat pump rebate at $800 (there is no separate cold-climate tier). Tennessee HEAR hasn't launched. The federal §25C credit is gone. Combined stack: $800 against $15,400. Net out-of-pocket: $14,600. Wesley also takes a $7,500 KUB on-bill heat pump loan over 10 years to finance the post-rebate balance at low interest, paying it back through monthly bill add-on. The on-bill loan isn't a rebate — it's a cash-flow tool.

Choosing a contractor in Tennessee

Tennessee licenses HVAC contractors through the Tennessee Board for Licensing Contractors (Mechanical Contractor — Heating/Refrigeration). Verify at tn.gov/commerce before signing. TVA EnergyRight rebates require a Quality Contractor Network (QCN) member to install qualifying equipment; the QCN roster is searchable at energyright.com. A non-QCN contractor cannot file the EnergyRight rebate even with qualifying equipment. The contractor files on the customer's behalf. Rebate tier depends on the installed system's SEER2 rating (15-16.99 SEER2 earns $500; 17 SEER2 or higher earns $800), so confirm the AHRI-certified SEER2 value with your contractor before install.

Common pitfalls for Tennessee homeowners

• Confusing the EnergyRight tiers. TVA EnergyRight has two air-source heat pump tiers: $500 for 15-16.99 SEER2 and $800 for 17 SEER2 or higher. Some contractors and older articles cite a $1,500 heat pump rebate, but that amount applies only to geothermal systems; a single air-source install qualifies for one tier based on its rating. Confirm which tier your equipment qualifies for at the AHRI/NEEP review stage.
• Skipping the QCN contractor requirement. TVA EnergyRight rebates require a Quality Contractor Network (QCN) member. A non-QCN contractor cannot file the rebate even with qualifying equipment. The QCN designation is separate from standard HVAC licensure — confirm both at the quote stage. QCN status is on energyright.com.

Estimate your net cost

How to claim each rebate

1. Get pre-approved (where required). Some utility programs require approval before install. Check program details before signing a contract.
2. Use a participating contractor. Many programs require a licensed installer from an approved contractor list — especially HEEHRA, which routes through CEC-approved contractors who process the rebate at point of sale.
3. Save documentation. AHRI certificate, model numbers, and itemized invoice are required for most utility rebates.
4. Submit utility rebate within 60–90 days of install. Some programs are first-come first-served and close mid-year — funding can run out before the calendar year does.

If you can't afford a replacement in Tennessee

Rebates lower the price, but they still assume you can pay the rest. If your heating system is unsafe or has failed and a new one is out of reach, these programs repair or replace equipment at low or no cost for income-qualified households. Heat Pump Pricing Index is an independent information site — we don't fund, discount, or install equipment — so these are the doors to knock on first:

• Weatherization Assistance Program (WAP). Free energy and health-and-safety repairs — an unsafe furnace is exactly the kind of problem it fixes — for households at or near 200% of the poverty line. Apply through your local community action agency: how to apply (energy.gov).
• LIHEAP. Heating-bill help plus, in most states, a crisis component for broken or dangerous heating equipment. Same local agency; Tennessee LIHEAP contacts.
• USDA Section 504 Home Repair. For homeowners outside cities: 1% loans up to $40,000, and grants up to $10,000 for homeowners 62 and older to remove health and safety hazards. Program page and state offices (rd.usda.gov).
• Your utility and 211. Most electric and gas utilities run an income-qualified assistance fund — call the number on your bill and ask. Dialing 211 reaches a local specialist who knows which agencies in Tennessee currently have funds.

Safety first: if a technician has told you a heat exchanger is cracked, stop using the furnace and make sure you have a working carbon monoxide detector before anything else.

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