Heat Pump Incentives

Photograph of heat pump

Third Round of Heat Pump Incentives Available

Incentives for up to $3,800 for the purchase of residential air source heat pumps are available from the City of Lincoln and Lincoln Electric System (LES),  beginning September 1, 2025.

The best way to heat your home in the winter and cool your home in the summer is with a heat pump. Electric heat pumps are more energy efficient than other heating and cooling systems and keep your home comfortable year-round. They also reduce your household's greenhouse gas emissions.

Three incentive options are available, all of which may be combined with an $800 incentive from the Lincoln Electric System (LES) Sustainable Energy Program. The City-funded incentives are as follows:

  • $500 to replace a heat pump with another heat pump ($1,300 total with LES incentive)
  • $1,500 to replace an air conditioner with a heat pump ($2,300 total with LES incentive)
  • $3,000 to replace a heat pump and/or an air conditioner ($3,800 total with LES incentive for qualifying low-income (LMI) homeowners only)

Who is eligible:

  • Residents of the City of Lincoln who:
    • Live in or own and rent out a single-family detached home (rental units not eligible for the LMI incentive)
    • Live in and own a row home, town home, condo, or duplex

What is eligible:

  • The purchase and installation of air source heat pumps or mini-split heat pumps
  • Heat pumps must replace an existing heat pump or central air conditioner that is at least five years old. Window air conditioners are also eligible for replacement with a heat pump when the property has no central air conditioning. A heat pump may be paired with either a gas or electric furnace.
  • Heat pump must be inverter driven or have a minimum SEER2 (Seasonal Energy Efficiency Rating) of 15.2 and a minimum EER2 (Energy Efficiency Ratio) of 12

What is not eligible:

  • Any residence outside of Lincoln city limits
  • Commercial property, including multi-family housing
  • Row homes, town homes, condos, and duplexes if the unit is renter occupied
  • Ground source heat pumps
  • New residential construction
  • Mobile homes
  • More than one heat pump per household
  • Installation of a new heat pump without replacement of an older system

Program details are as follows:

For low- to moderate-income residents:

  1. You may qualify for the $3,000 low- and moderate-income incentive. Your income must be equivalent to or below 80% of the Lincoln Area Median Income(PDF, 99KB).
  2. Those who qualify for the low- and moderate-income incentive may contact the Urban Development Department at urbandev@lincoln.ne.gov. Approvals must occur before the heat pump is installed to qualify.
  3. See the participating HVAC contractors. Once you have been approved by the Urban Development Department, contact one or more of the Sustainable Energy Program participating contractors for bids and available LES incentives. Please note a participating contractor listed must be used to maintain eligibility for the low- to moderate-income incentives.
  4. Purchase and install your new heat pump through the contractor you select. The incentives will be applied as a credit on your contractor's invoice.

For residents above moderate-income (general population):

  1. See the participating HVAC contractors. Contact one or more of the Sustainable Energy Program participating contractors for bids and available LES incentives. They will apply for the LES incentives on your behalf.
  2. Purchase and install your new heat pump through the contractor you select. The incentives will be applied as a credit on your contractor's invoice.

Federal tax credits are also available for heat pump purchases:

Federal tax credits are available for up to 30% of the cost of a new heat pump until December 31, 2025. This credit may be used in addition to the incentives from the City of Lincoln and LES. Visit the ENERGY STAR Air Source Heat Pumps Tax Credit page for further information. The City recommends consulting a tax professional on qualifying equipment and tax deduction details. You may also qualify for additional savings on other electrification updates. Visit the Inflation Reduction Act Calculator for more information.

For more information:

Visit LES.com/SEP or email SEP@les.com.

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