BLAINE, Minn. - June 20, 2026 - The federal heat pump tax credit is dead. It expired December 31, 2025, and a lot of Twin Cities homeowners have read that as the end of the story. It isn’t. There’s still real rebate money on the table this year — just not from Washington anymore. Twin City Heating, Air & Electric wants metro-area homeowners to know where it’s coming from now, and more importantly, which pieces actually stack together.
“We’re already getting calls from people who think the savings disappeared with the federal credit,” said Dan Wong, spokesperson for Twin City Heating, Air & Electric. “Wrong assumption. The federal piece is gone, sure. But the utility rebates are still very much alive, and on the right setup they can still shave thousands off an install. Honestly, the bigger risk these days isn’t that the money dried up. It’s homeowners never finding out it was there to begin with.”
What expired — and what didn’t
Two federal heat pump tax breaks died at the same time: the Section 25C Energy Efficient Home Improvement Credit, and the Section 25D Residential Clean Energy Credit. Both ended for any system placed in service after December 31, 2025 — a casualty of the One Big Beautiful Bill Act’s accelerated phase-out. Bought the equipment in 2025 but didn’t get it installed until 2026? Doesn’t matter. Still doesn’t qualify. And there’s no federal replacement waiting in the wings.
Here’s what survived, though — a layer of utility rebates most homeowners don’t even know they can combine:
- Up to $2,000 from Xcel Energy for a qualifying cold-climate heat pump, for customers with both Xcel electric and Xcel gas service
- An additional $600 Xcel insulation bonus for homeowners who pair qualifying insulation and air sealing with their heat pump
- $1,100 from CenterPoint Energy for a ducted heat pump installed as part of a dual-fuel system alongside a high-efficiency gas furnace
- Stack both, and that’s roughly $3,100 to $3,700 for homeowners who qualify across both programs on a single project
There’s also a state program on the horizon — Save Energy Minnesota — that would layer on income-qualified rebates up to $8,000 through the federal HEAR program, plus another $4,000 state heat pump rebate. It’s approved in concept. It hasn’t launched. The Minnesota Department of Commerce hasn’t given a start date. So if your system is already on its last legs, you’re stuck with a real decision: install now and take what’s available, or wait on a program with no confirmed timeline — knowing full well that installations completed before launch won’t qualify retroactively.
Why this matters for dual-fuel households specifically
Minnesota winters mean backup heat matters. That’s why the dual-fuel setup — heat pump plus gas furnace — has become one of the most practical configurations in the state. It also happens to be exactly what CenterPoint built its rebate around. Their program requires the heat pump to hand off to the gas furnace at 40°F or below, paired with a furnace rated 92% AFUE or higher. Going fully electric instead? Installing a mini-split or ground-source system? Neither qualifies for this particular rebate. So the configuration question isn’t academic — get it wrong before equipment gets ordered, and that’s the difference between claiming the full stack and leaving money on the table.
The bottom line for homeowners
“If your system’s already failing, don’t sit around waiting on a program that hasn’t launched,” Wong said. “But don’t assume there’s nothing out there either — that’s just as wrong. Stack what’s live right now. Get your contractor to confirm eligibility before you sign anything. And keep half an eye on the state program in case it ends up adding to what you’ve already locked in.”
Twin City Heating, Air & Electric handles all of it for Twin Cities metro homeowners — confirming utility eligibility, picking cold-climate equipment that actually qualifies for top-tier rebates, and filing the paperwork with Xcel Energy and CenterPoint Energy once the work is done.
About Twin City Heating, Air & Electric
Twin City Heating, Air & Electric provides residential heating, cooling, and electrical services across the Minneapolis-St. Paul metro area, based in Blaine, Minnesota. The company specializes in heat pump installation, furnace and AC service, and electrical work for homeowners throughout the region.
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