Heat Pump Rebates in Bellevue, WA: PSE Rebates Are Live, the Federal 25C Credit Is Worth Up to $2,000, and Washington's HEEHRA-Style Rebates Are Not Open Yet

If you own a home in Bellevue or elsewhere on the Eastside, the short answer is this: the live money right now is from Puget Sound Energy and the federal 25C tax credit. PSE currently has published heat-pump rebates for several common upgrade paths, and the IRS still allows a 30% tax credit up to $2,000 per year for qualifying heat pumps installed through December 31, 2025. Washington’s separate federal IRA home-rebate program is not open statewide yet, so you should not count on a Washington HEEHRA-style rebate for a project you want to do now. PSE, IRS, Washington Commerce

That matters in Bellevue, Kirkland, Redmond, Mercer Island, Issaquah, and Sammamish because more homeowners are switching from baseboard heat, older electric furnaces, or aging gas systems to heat pumps that can both heat and cool. If you are pricing a replacement, it is smart to run the rebate math before you choose between a straight heat pump, a hybrid system, or another furnace-and-AC setup. If you want help comparing system types, our AC installation service, AC repair service, and furnace repair service pages are a good starting point.

What rebates are available in Bellevue right now?

For most homeowners in Bellevue and the surrounding Eastside, there are three buckets to know:

1. PSE utility rebates for qualifying heat-pump projects.
2. The federal Section 25C tax credit claimed on your tax return.
3. Washington’s future IRA home rebates, which are still in pre-launch status.

The reason this gets confusing is that homeowners often hear “IRA rebates” and assume all of them are already live. They are not. The tax credit is live. PSE rebates are live. Washington’s consumer-facing federal home rebate program is still being finalized by the state. IRS, Washington Commerce

PSE heat-pump rebate details for Bellevue and the Eastside

PSE’s current residential heating rebate pages are the most important local source if your home is in Bellevue and you have PSE service.

1. Electric resistance to heat pump rebate

PSE says: “Get a $1,500 rebate” when you replace an electric resistance heating system with a qualifying air-source heat pump, ducted or ductless. That is the main published rebate for homes currently using baseboard heat, wall heaters, cable heat, electric hydronic heat, or an electric forced-air furnace. PSE electric resistance to heat pump rebate

Key eligibility points PSE publishes:

• You must use a PSE Recommended Energy Professional (REP) or PSE Trade Ally.
• You must be a current PSE single-family residential electric customer.
• Your current primary heating system must be electric resistance.
• Existing heat pumps and natural-gas-forced-air systems are not eligible under this specific pathway.
• PSE limits the offer to one rebate per single-family residence.
• PSE says the rebate is available through the contractor working on your project.

PSE also publishes a higher $2,400 Efficiency Boost rebate on that same page for income-qualified customers. Eligibility is tied to PSE’s income guidelines and county-based household thresholds. PSE electric resistance to heat pump rebate, PSE Efficiency Boost

2. Hybrid heat pump rebate

If your Bellevue-area home has a natural gas furnace and you are considering a dual-fuel setup instead of going all-electric, PSE’s hybrid pathway may fit. PSE says: “Get a $1,500 rebate” when you install a qualifying hybrid heating system that pairs a heat pump with a new or existing gas furnace. PSE hybrid heat pump rebate

Key published rules include:

• You must be a current PSE single-family natural gas or dual-fuel customer.
• Your primary current heating system must be a natural gas furnace.
• The new equipment must be an AHRI-certified central ducted heat pump paired with an existing or new natural gas forced-air furnace.
• Ductless heat pumps are not eligible under this rebate path.
• You must still use a PSE REP or Trade Ally contractor.

PSE also lists a $2,400 Efficiency Boost rebate on the hybrid page for income-qualified customers. PSE hybrid heat pump rebate, PSE Efficiency Boost

3. Moderate-income gas-to-electric heat pump rebate

For some Eastside households currently heating with natural gas, PSE publishes a larger income-qualified fuel-switching rebate. PSE says: “Get a $4,000 rebate” when you replace your natural gas heating system with a qualifying air-source heat pump. PSE moderate-income heat pump rebate

Important published rules:

• You must be a current PSE single-family residential natural gas customer.
• Your current primary heating system must be fueled by PSE natural gas.
• You must meet income eligibility requirements.
• The new system must be a qualifying AHRI-certified heat pump.
• The previous gas heating equipment must be removed or decommissioned after installation.
• PSE says the rebate application must be submitted within 30 days of install.
• PSE requires installation by a PSE Trade Ally or REP.

This is the PSE program most homeowners mean when they ask whether there is a bigger Bellevue rebate for switching off gas. There is, but it is income-qualified. PSE moderate-income heat pump rebate

4. Heat-pump-to-heat-pump upgrades and contractor pass-through discounts

PSE also lists a heat pump to heat pump upgrade rebate on its heating hub and separately notes that some high-efficiency models may qualify for pass-through discounts from contractors through its midstream program. That matters if you already have a heat pump and are replacing it with a newer system rather than converting from baseboard or gas. PSE heating rebates

Federal IRA 25C tax credit details

The federal credit to know is the Energy Efficient Home Improvement Credit under Internal Revenue Code Section 25C.

The IRS says that for improvements installed after January 1, 2023, the credit equals 30% of certain qualified expenses, and the annual maximum is $2,000 per year for qualified heat pumps, water heaters, biomass stoves or biomass boilers. The IRS also says the overall yearly maximum can be up to $3,200 when you combine the heat-pump bucket with other eligible improvements. IRS 25C overview

Who qualifies for 25C?

The IRS says you may claim the credit for improvements to your main home, which is generally where you live most of the time. The home must be in the United States and must be an existing home that you improve, not a new home. IRS 25C overview

What heat pumps qualify?

The IRS says qualifying heat pumps must meet or exceed the applicable CEE highest efficiency tier in effect at the beginning of the year they are installed. ENERGY STAR’s consumer guidance is useful here because it explains the current qualifying paths and links to eligible product lists your contractor can check. IRS 25C overview, ENERGY STAR air-source heat pump credit page

How much is the credit worth?

For qualifying heat pumps, the federal credit is:

• 30% of eligible cost
• Up to $2,000 per year

The IRS also says the credit is nonrefundable, so it cannot exceed the tax you owe, and you cannot carry forward the unused portion. IRS 25C overview

Can you stack 25C with a PSE rebate?

Usually yes, but not by taking the credit on the full pre-rebate contract price.

The IRS is explicit here: public utility subsidies for buying or installing clean energy property are subtracted from qualified expenses. In plain English, if you receive a PSE rebate, you generally reduce your federal credit basis by that subsidy before calculating the 30% credit. IRS 25C overview, IRS Form 5695 instructions

How do you claim 25C?

The IRS says to file Form 5695, Residential Energy Credits, Part II, with your tax return. It also says you claim the credit for the tax year when the property is installed, not merely purchased. IRS 25C overview

For most homeowners, that means keeping:

• The final invoice
• Model and AHRI information
• Any manufacturer certification or product eligibility documentation your installer provides
• Your record of the PSE rebate amount

What about HEEHRA in Washington?

This is the part many Bellevue homeowners are waiting on.

Washington State Commerce’s current IRA Home Energy Rebates page says the state is still in “Step 5 - Program operation preparation” and that Step 6 is DOE launch approval, followed by Step 7: Statewide launch, when “Washingtonians may apply and receive rebate funds for home upgrades.” Washington Commerce IRA Home Energy Rebates

Commerce also says:

• “Rebates are not retroactive.”
• You must apply and be approved first before buying appliances or doing the upgrades.
• The program covers low- and moderate-income households and includes heat pumps, wiring, panel upgrades, insulation, air sealing, ventilation, appliances, and general weatherization measures.

Washington is using the names HARP and HOMES on its current consumer page. HARP is the state’s appliance and electrification rebate track related to the federal high-efficiency electric home rebate framework. The practical takeaway for Bellevue homeowners is simple: if your heat-pump project is happening now, do not assume you can claim a Washington point-of-sale HEEHRA-style rebate unless the state has officially launched before your project starts. Washington Commerce IRA Home Energy Rebates

Washington Commerce’s contractor-network page says it is in the final stage of getting U.S. Department of Energy authorization for program launch, and the contractor list will be public once the program launches. Washington Commerce QCN page

Step-by-step: how Bellevue homeowners should claim the available savings

If you want the PSE rebate now

1. Confirm that your home is a PSE-served single-family residence and identify your current heating type.
2. Ask your contractor which PSE pathway applies: electric-resistance conversion, hybrid heat pump, moderate-income gas-to-electric, or another published heat-pump path.
3. Make sure the contractor is a PSE REP or Trade Ally if the rebate page requires it.
4. Have the contractor confirm the exact AHRI-rated equipment and any lockout or control requirements in writing.
5. Ask whether the rebate will be applied through the contractor or submitted separately after install.
6. If you are using the moderate-income fuel-switching rebate, do not miss PSE’s 30-day post-install submission window.

If you also want the federal 25C credit

1. Save the final paid invoice and equipment details.
2. Subtract any qualifying PSE utility subsidy from your eligible cost before figuring the credit.
3. Use Form 5695, Part II for the year the system is placed in service.
4. Keep your paperwork in case your tax preparer or the IRS asks how you calculated the credit.

If you are waiting for Washington’s HEEHRA-style rebate

1. Watch the Washington Commerce IRA Home Energy Rebates page for launch updates.
2. Do not assume retroactive reimbursement.
3. Expect the state to require approval before purchase or installation once the program opens.
4. If your existing system is failing now, compare the value of today’s PSE rebate plus the federal 25C credit against the risk of waiting. Washington Commerce IRA Home Energy Rebates

Bellevue and Eastside considerations that matter

In the Bellevue area, the rebate conversation is not just about winter heat. A lot of older homes on the Eastside were built with electric resistance heat and no central cooling, while newer homes may have aging gas furnaces and separate AC systems. That is why heat pumps are showing up more often in replacement quotes here: they solve both heating and cooling in one project.

For homeowners in Bellevue, Kirkland, Redmond, Mercer Island, Issaquah, and Sammamish, the smartest rebate play usually depends on the system you have today:

• Baseboard or electric furnace now: the PSE electric-resistance conversion rebate is often the first place to look.
• Gas furnace and you want dual fuel: compare PSE’s hybrid heat pump rebate.
• Gas furnace and you want full electrification: check the moderate-income PSE fuel-switching path first.

If you want a second opinion on whether a heat pump makes sense for your house, call (425) 598-0416 or use our contact page.

FAQ

What heat pump rebates are available right now for Bellevue homeowners?

For many Bellevue-area homeowners served by Puget Sound Energy, the live incentives are PSE heat-pump rebates and the federal 25C tax credit. PSE currently lists a $1,500 rebate for electric-resistance-to-heat-pump conversions, a $1,500 rebate for qualifying hybrid heat pump systems, and a $4,000 moderate-income rebate for qualifying natural-gas-to-heat-pump projects. The federal 25C credit is worth 30% of eligible costs up to $2,000 per year for qualifying heat pumps. PSE heating rebates, IRS 25C overview

Can I combine a PSE heat pump rebate with the federal 25C tax credit?

Usually yes, but the IRS says public utility subsidies for buying or installing clean energy property are subtracted from qualified expenses before you calculate the credit. That means the PSE rebate typically lowers the amount you use for the federal credit calculation. IRS 25C overview

Is the federal HEEHRA rebate available in Washington yet?

Not statewide as of the current Washington Commerce program page. Commerce says it is still in program operation preparation and awaiting DOE launch approval before Washingtonians may apply and receive rebate funds. Washington Commerce IRA Home Energy Rebates

How do I claim the federal 25C heat pump tax credit?

Claim it on IRS Form 5695, Part II for the tax year the system is installed and placed in service. Keep your invoices and equipment documentation. IRS 25C overview

Do I need to apply before installation for Washington’s future IRA rebate program?

Yes. Washington Commerce says the rebates are not retroactive and that homeowners must apply and be approved before buying appliances or doing the upgrades once the program launches. Washington Commerce IRA Home Energy Rebates

Sources

• Puget Sound Energy: Heating rebates
• Puget Sound Energy: Electric resistance to air-source heat pump conversion rebate
• Puget Sound Energy: Hybrid heat pump
• Puget Sound Energy: Moderate-Income Fuel-Switching Heat Pump Program
• Puget Sound Energy: Efficiency Boost
• IRS: Energy Efficient Home Improvement Credit
• IRS: Instructions for Form 5695
• ENERGY STAR: Air Source Heat Pumps Tax Credit
• Washington State Department of Commerce: IRA Home Energy Rebates
• Washington State Department of Commerce: Home Energy Rebates Qualified Contractor Network