Two things changed, and most of the internet has not caught up. If you are reading a page that promises 30% back up to $2,000 through 2032, or up to $8,000 in Oregon HEAR rebates available now, that page was written before the rules changed. Here is the current picture.
1. The federal tax credit is gone
Public Law 119-21, signed 4 July 2025, terminated Internal Revenue Code sections 25C and 25D for property placed in service after 31 December 2025.
A heat pump installed in 2026 does not qualify for the federal credit, no matter when it was quoted, purchased or ordered. The only people still claiming it are those whose system went in during 2025 — they can claim it on the return they file in 2026.
2. Energy Trust money is real, but it is for electric homes
This is the part that catches most Happy Valley homeowners, and almost nobody says it plainly.
Energy Trust of Oregon's standard residential heat pump incentives require the new heat pump to replace electric resistance heat or an electric forced-air furnace as the home's primary heating system. The ducted and extended-capacity incentives go further and state that the heat pump cannot have a backup gas heating system.
So if your house is heated by a gas furnace today — which describes a great many homes in Happy Valley, Clackamas and Oregon City — the honest answer is that the standard Energy Trust incentives are not available to you. Not reduced. Not harder to get. Not available on that path.
We would rather tell you that before you get a quote built around money that is not coming.
Energy Trust incentive amounts, effective 1 January 2026
Oregon homes served by Portland General Electric or Pacific Power only.
| System | Owner-occupied single family | Rental, attached residence, or Savings Within Reach |
|---|---|---|
| Ductless heat pump | $800 | $1,800 |
| Ducted heat pump | $1,000 | $3,000 |
| Extended-capacity heat pump | $1,000 | $2,000 |
| Manufactured home promotion (ductless) | $3,500 — single-head system, 15,000–18,000 BTU capacity only | |
Equipment conditions: ductless systems must be inverter-driven with HSPF2 of 8.10 or greater and the highest-capacity indoor head must serve the main living space. Ducted systems need HSPF2 of 7.50 or greater and a thermostat lockout set to 35°F or lower where electric auxiliary heat is present. Extended-capacity systems must be central ducted with a traditional air handler and meet 2025 CEE Tier 1 Path A criteria (SEER2 ≥16.0, EER2 ≥9.8, HSPF2 ≥8.5, COP at 5°F ≥1.75, capacity ratio ≥60% at 5°F/47°F). Incentives are limited to one per residence. The standard ductless incentive may be installed by any actively licensed Oregon CCB contractor; the rental, Savings Within Reach and promotional tiers require a program-approved trade ally and are paid through the contractor.
3. The state programs: one is oversubscribed, one has not opened
HP3 — Oregon Heat Pump Purchase and Installation Program. Run by the Oregon Department of Energy, worth up to $2,000 per eligible installation. Round 1 and Round 2 owner-occupied funding is fully reserved. Rental property and new construction categories remained open as of the last published update, so landlords and builders are in a better position here than homeowners.
HEAR — Home Energy Rebates. Not open. ODOE planned a spring 2026 launch, that did not happen, and the department has said a date will follow U.S. Department of Energy approval. Any page telling you that up to $8,000 or up to $14,000 is available in Oregon today is describing a program you cannot apply to yet.
So what is actually available to you?
- Electric furnace or baseboard heat, PGE or Pacific Power, own your home: $800 to $1,000 from Energy Trust, and it is straightforward.
- Same, but it is a rental or an attached home, or your household is income-qualified: $1,800 to $3,000, through a program-approved trade ally.
- Manufactured home: $3,500 for the right single-head ductless system — the best-funded category in the state right now.
- Gas furnace, own your home: realistically nothing at the moment. Worth revisiting if HEAR opens.
- Building new, or converting a rental: check HP3 before you buy equipment — that is where unreserved state money still sits.
A word on quotes that lead with rebates
A rebate is a discount on a number somebody else chose. If two quotes are $4,000 apart and one of them waves an $800 incentive at you, the incentive is not the story. Get the equipment model numbers, the HSPF2 rating and the total installed price in writing, then work out the rebate afterwards. That order protects you.
Last verified 23 September 2026 against: Energy Trust of Oregon Residential Incentive Information Sheet PI 0320I v2026.5 and Ductless Heat Pump Incentive Information Sheet PI 0320I-HP v2026.4, both revised 9 September 2026; IRS guidance on Public Law 119-21 sections 25C and 25D; Oregon Department of Energy HP3 and Home Energy Rebate program pages. Incentive programs change without notice — confirm current amounts with Energy Trust before you sign anything. This page is general information, not tax advice.