Heat pump rebates in Seattle, come from the city and its utility, not the federal government. City Light takes $300 or $600 off a qualifying heat pump, and Seattle Clean Heat takes $2,000 off an oil-to-heat-pump conversion, with $4,000 more for moderate incomes. PSE runs separate programs, and the federal 25C credit has ended.
Key takeaways
- City Light: $300 or $600 contractor discount by efficiency tier, one system per home.
- Seattle Clean Heat: $2,000 for oil-heated Seattle homes, plus $4,000 for households at 81% to 150% of area median income, on installs completed within the program's current funding period.
- PSE's hybrid rebate needs PSE gas and PSE electric, so it does not apply inside Seattle.
- Federal 25C ended for equipment placed in service after December 31, 2025; the federal IRA rebates have not launched in Washington.
Incentives change more often than any other part of a heat pump project, so every amount on this page carries its check date. The Seattle Heat Pump Company keeps this list because a rebate missed on the invoice is rarely recovered later. The Seattle Heat Pump Company plans and manages ducted heat pump projects in Seattle and King County, with the work carried out by licensed and insured contractors; it does not administer any of these programs, so confirm current terms with each program before you sign.
The full incentive stack
| Program | Amount | Who it applies to | Key condition |
|---|---|---|---|
| Seattle City Light contractor discount, Tier 1 | $300 | City Light customers replacing existing equipment | SEER2 15.2 and HSPF2 8.1 or higher; retrofits only |
| Seattle City Light contractor discount, Tier 3 | $600 | City Light customers | SEER2 16.0 and HSPF2 9.5 or higher |
| Seattle Clean Heat base rebate | $2,000 | Oil-heated Seattle homes | Qualifying Mitsubishi Electric heat pump, participating contractor, tank decommissioned |
| Seattle Clean Heat moderate-income bonus | $4,000 more | Oil-heated Seattle homes at 81% to 150% of area median income | Installation completed within the current funding period |
| Office of Housing HomeWise | Free conversion | Income-eligible Seattle households heating with oil | Income limits below the Clean Heat bonus range |
| PSE hybrid heat pump | $1,500 ($2,400 income-qualified) | PSE gas and PSE electric customers adding a heat pump to a gas furnace | PSE Trade Ally installer |
| PSE electric resistance to heat pump | $1,500 ($2,400 income-qualified) | PSE electric customers with baseboard or other resistance heat | PSE Trade Ally installer |
| PSE income-qualified gas to heat pump | $4,000 | Income-qualified PSE gas customers | Gas heat removed or capped; PSE Trade Ally installer |
| PLIA Heating Oil Loan and Grant | Up to $75,000 per project | Owners of property with a heating oil tank | PLIA approval before any work starts |
| Federal 25C tax credit | Ended | None for new installs | Equipment placed in service after December 31, 2025 does not qualify |
| Federal IRA home energy rebates | Not available | Not launched in Washington | No launch date announced |
Start with your utility
The single biggest factor in which heat pump rebates you can use is who sells you electricity. Seattle City Light serves Seattle plus Shoreline, Lake Forest Park, Burien, Tukwila, SeaTac, Normandy Park, part of Renton and parts of unincorporated King County. Puget Sound Energy sells electricity on most of the Eastside, including Bellevue, Kirkland and Redmond and Mercer Island.
Gas is different. PSE sells natural gas inside Seattle as well as in the suburbs, so a Seattle house can be a City Light electric customer and a PSE gas customer at the same time. That split decides which PSE programs reach Seattle and which do not.
| Your situation | Incentives that can apply |
|---|---|
| Seattle house heated with oil | City Light $300 or $600; Clean Heat $2,000; $4,000 bonus or HomeWise by income; PLIA for tank issues |
| Seattle house with a gas furnace (conversion options) | City Light $300 or $600; PSE income-qualified gas to heat pump $4,000 may apply (confirm with PSE) |
| Seattle house replacing an existing heat pump | City Light $300 or $600 |
| Shoreline, Lake Forest Park or Burien house | City Light $300 or $600 (suburban City Light customers); Clean Heat does not apply outside Seattle |
| Bellevue house with PSE gas and PSE electric | PSE hybrid $1,500 or $2,400; PSE income-qualified gas to heat pump $4,000 |
| Eastside house with electric baseboard on PSE | PSE electric resistance to heat pump $1,500 or $2,400 |
Seattle City Light heat pump rebate
City Light’s incentive is a midstream contractor discount. Instead of a mail-in rebate, the money flows through participating distributors to the contractor, who is expected to pass it to you on the invoice. City Light says pass-through is “very strongly recommended,” which is not the same as guaranteed, so ask for it in writing.
The amount follows the equipment’s efficiency ratings. Tier 1 pays $300 for systems at SEER2 15.2 and HSPF2 8.1 or above, and only on retrofits of existing homes, not new construction. Tier 3 pays $600 at SEER2 16.0 and HSPF2 9.5 or above. A $400 Tier 2 exists but applies only to mini-split and multi-split systems, not ducted heat pumps. The other conditions:
- you must be a City Light residential customer
- one outdoor system per residence
- equipment under 5.4 tons, sold through a participating distributor on or after January 1, 2026
- no do-it-yourself installations
Ratings are checked on the matched outdoor and indoor combination, not the outdoor unit alone. The SEER2 and HSPF2 guide shows how to find a system’s AHRI rating and check it against these tiers. Because the higher tier often points toward variable-speed equipment, the variable-speed comparison is worth reading alongside it.
Seattle Clean Heat and HomeWise for oil-heated homes
Seattle’s Office of Sustainability and Environment runs the Clean Heat program to move oil-heated homes to heat pumps. The city estimates roughly 7,000 to 10,000 Seattle homes still heat with oil, down from about 18,000 in 2018, and has set a goal of transitioning all of them by 2030.
The program offers:
- $2,000 instant rebate on the contractor’s invoice for any oil-heated Seattle home converting to a qualifying Mitsubishi Electric heat pump through a participating contractor. It is not income-restricted. The oil tank has to be decommissioned to Seattle Fire Department rules.
- $4,000 moderate-income bonus, stacked on the base rebate for up to $6,000 in total, for households at 81% to 150% of area median income. For a four-person household, the city’s current figures put that band at about $116,650 to $246,600. Installations must be completed within the program’s current funding period.
- Free conversions through the Office of Housing’s HomeWise program for income-eligible households below the bonus range, including the heat pump and the tank decommissioning.
The equipment condition matters. Clean Heat applies to qualifying Mitsubishi Electric heat pumps, so confirm the quoted model qualifies before you sign; the contractors who carry out our projects can offer the rebate on qualifying systems. For the full cost picture, see the oil conversion cost guide and the oil to heat pump conversion service.
PSE rebates in the suburbs and for Seattle gas customers
PSE’s heat pump programs are built around conversions. PSE offers $1,500 ($2,400 with its income-based Efficiency Boost) for adding a heat pump to a gas furnace, the same amounts for replacing electric resistance heat, and $4,000 for income-qualified gas customers who switch to a heat pump and remove or cap their gas heat.
Two conditions catch people. The hybrid rebate requires PSE gas and PSE electric service, which rules out Seattle, where City Light sells the electricity. And since April 2, 2026, PSE rebates require the installer to be a PSE Trade Ally. The income-qualified gas program does not state a PSE electric requirement, so Seattle households who buy gas from PSE may qualify; confirm with PSE before counting on it. The PSE rebate guide covers each program, and dual fuel heat pumps explains the hybrid setup.
The federal heat pump tax credit has ended
The federal 25C Energy Efficient Home Improvement Credit used to cover 30% of a qualifying heat pump’s cost, up to $2,000. Federal legislation signed in July 2025 ended it: the IRS states the credit is not allowed for any property placed in service after December 31, 2025. A heat pump that was installed and running in 2025 can still be claimed on a 2025 return. A system installed after that cannot.
Any quote or ad that still lists a federal tax credit for a heat pump is out of date. Ask the contractor to remove it from the net price, and use the quote comparison guide to check the rest of the numbers.
State money and the federal IRA rebates
The Inflation Reduction Act created two federal home energy rebate programs, often called HOMES and HEAR. Neither had launched in Washington, and the City of Seattle describes the federal rebates as not yet available. They should not appear in a budget today.
Washington has run its own state-funded electrification rebates through the Department of Commerce, paid for by the Climate Commitment Act and delivered through local administrators. In Seattle, that state money reaches homeowners as the Clean Heat $4,000 moderate-income bonus. Washington offers no sales tax exemption for air-source heat pumps that we could identify, so sales tax applies to the equipment as usual.
Find out which incentives fit your houseTell us your utility and what heats the house now, and the estimate will show which rebates apply.
Get an EstimatePLIA help for oil tank problems
Washington’s Pollution Liability Insurance Agency (PLIA) runs the Heating Oil Loan and Grant program, which replaced the state’s no-cost heating oil insurance after that policy expired June 30, 2025. It offers up to $75,000 per project, combining grants for leak cleanup and associated tank removal with a loan that can cover a heat conversion or decommissioning a tank in place.
It is not income-limited, and the applicant must own the property. The rule that matters most: PLIA must approve the work before it starts and does not reimburse completed work, so decommissioning the tank first forfeits the funding. Applications open in windows; check PLIA’s site for the current dates. The PLIA window post covers how to apply, and oil tank decommissioning explains the tank side.
Financing: what public programs exist
The Seattle Heat Pump Company does not offer its own financing. The public options, are limited:
- PLIA’s Infrastructure Upgrade Loan can cover a heat conversion for homes with heating oil tanks, at a rate tied to the prime rate as of March 1 of the application year, with 10, 20 or 30 year terms and no prepayment penalty.
- Craft3’s Home Energy Loans, which were once repaid on the City Light bill, are paused with no relaunch date.
- Seattle’s Utility Discount Program cuts electric bills by 60% for income-qualified residents. It does not lower the installation price, but it changes the running-cost math.
- King County’s Energize program has covered most or all of the cost of heat pumps for income-qualified households in parts of south King County; its current single-family status should be confirmed with the county.
How to make sure you actually get the money
Most missed incentives come down to paperwork and sequence, not eligibility:
- Ask for every rebate as a line on the quote and the final invoice, with the program named.
- Confirm the matched system’s AHRI rating meets the City Light tier you are counting on.
- For Clean Heat, confirm both the equipment and the contractor participate before signing.
- For PSE, confirm the installer is a PSE Trade Ally.
- For PLIA, apply and get approval before any tank work begins.
- Check dates: the Clean Heat bonus requires installation within the program’s current funding period.
- Keep the permit records, invoices and model numbers; programs can ask for them.
Next step
Rebates lower the price of a heat pump, but they do not decide whether it fits the house. That still comes down to the load calculation, the ducts, the panel and the outdoor location. The installation cost guide shows the price ranges these rebates come off, and the cost estimator applies them to a range for your house. When you want a number built around the actual house, call or send a few details about your utility and current heating system.