Texas Mini Split Rebates & Tax Credits in 2026

The federal credit is gone — read this first

For several years, the 25C Energy Efficient Home Improvement Credit offered up to $2,000 back on a qualifying heat pump. A great deal of HVAC marketing was built around it, and a great deal of that marketing is still online.

The 25C credit expired December 31, 2025 under the One Big Beautiful Bill Act, which Congress passed in July 2025. Systems installed in 2026 do not qualify.

If your system was installed and placed in service on or before December 31, 2025, you may still claim it on your 2025 return. For anything installed after that date, the credit does not exist.

This matters practically because contractors and comparison sites still advertise it. If a quote assumes a $2,000 federal credit against your 2026 installation, the quote is wrong, and you should ask what else in it is out of date.

Texas has a separate $690 million allocation under the federal HEAR and HOMES rebate programs, which is expected to open in late 2026 or 2027. It is not available yet. Do not budget around it until the state actually launches it.

What you can claim: Texas utility programs

Utility rebates are now the incentive that matters. They are administered by your delivery utility, which in deregulated Texas is not the company that bills you.

Utility	Coverage area	Rebate	Key requirements
Oncor	DFW, Waco, Tyler, Lubbock	Up to $600 per heat pump	16 SEER2+, Oncor-approved contractor, DOE-listed smart thermostat
CenterPoint Energy	Greater Houston	Up to $500 per heat pump	Program-minimum efficiency, participating licensed contractor
CPS Energy	San Antonio / Bexar County	$100–$275 per ton	Texas-licensed contractor, project completed in program year
Austin Energy	City of Austin only	Up to ~$3,000 (whole-home)	Participating contractor, pre-approval generally required

The mistake that costs people the rebate

Nearly every disqualification we hear about comes from one of two errors.

Assuming the metro utility serves you. This is the big one, and it is specific to Texas geography.

Austin Energy has by far the most generous program in the state — and it stops at the City of Austin limits. Round Rock, Cedar Park, and Pflugerville are in the Austin metro and are not in Austin Energy territory. Round Rock and Pflugerville are Oncor. Cedar Park is Oncor or Pedernales Electric Cooperative depending on the address.

Similarly, Georgetown, New Braunfels, and Boerne all run their own municipal utilities or are served by rural cooperatives. Neither Oncor, CenterPoint, nor CPS Energy programs reach them.

Check a recent bill. Whatever name is on it is the program to ask about.

Not knowing the delivery utility exists. In deregulated Texas you buy electricity from a retail provider — TXU, Reliant, Gexa, Green Mountain — but a separate regulated delivery utility owns the wires and runs the efficiency programs. Homeowners in Dallas and Houston routinely skip rebates they qualify for because they have never seen “Oncor” or “CenterPoint” on a statement.

If you are in DFW, your delivery utility is almost certainly Oncor regardless of who bills you. If you are in Houston, it is almost certainly CenterPoint.

Requirements that disqualify people after the fact

Some conditions can be fixed later. Others cannot.

The approved-contractor requirement cannot be fixed retroactively. Oncor requires the installer be enrolled in its program before the work. Austin Energy generally requires a participating contractor and pre-approval for its larger rebates. If you install first and apply after, you are out. This is the single most common disqualification.

The smart thermostat requirement for Oncor catches people who assume it applies only to ducted systems. It applies to the rebate, not the equipment type.

Efficiency minimums are rarely a problem — modern inverter mini splits at 18 to 24 SEER2 clear the 16 SEER2 bar comfortably. Verify the specific model rating anyway, since a very cheap unit occasionally falls short.

Timing. Oncor’s application cycle runs February through November and closes December 1 or when annual funding runs out, which in recent years has happened before the deadline. CPS Energy runs a defined program year. Funds are finite and first-come across every Texas utility.

The practical implication: a spring project has materially better rebate odds than an August one, when everyone’s system has just failed in the heat.

Austin Energy is worth restructuring a project around

If you are inside the City of Austin, the program is different enough in kind to change what you should do.

Oncor and CenterPoint pay a flat amount per qualifying heat pump. Austin Energy pays substantially more for bundled whole-home performance — HVAC combined with attic insulation, duct sealing, and air sealing — reaching roughly $3,000.

Two consequences follow. First, doing the envelope work alongside the equipment pays better than the equipment alone. Second, the envelope work reduces the equipment capacity you need in the first place, so you often spend less on the system too.

The catch is process. Pre-approval is generally required, and homeowners who install first routinely disqualify themselves. Make your first call about the program, not the equipment.

Rebates for multiple units

The rebates are structured per qualifying heat pump, not per household, which matters in two situations.

Multi-zone systems. How a multi-zone system counts varies by utility — some treat the outdoor condenser as one unit, others count indoor heads. Ask before assuming a five-zone system earns five rebates.

Rental property. Owners installing units across a duplex or fourplex may be able to claim per unit. Program rules for non-owner-occupied property differ from owner-occupied, so confirm with the utility directly.

What to ask your contractor

• Are you enrolled as an approved or participating contractor with my utility?
• What is the SEER2 rating of the exact model you are quoting?
• Does this quote include the smart thermostat, if my utility requires one?
• Will you handle the rebate paperwork, or is that mine?
• Is the program currently open and funded?

A contractor who works your area regularly will answer all five without hesitating. One who cannot may still do fine work, but you should plan to manage the rebate yourself.

Local details

City pages cover the specific utility, program, and permitting for each area:

Dallas · Houston · San Antonio · Austin · Fort Worth · El Paso · Round Rock · Georgetown

For what systems actually cost before any rebate, see the 2026 cost guide and the pricing page.

Program terms, amounts, and deadlines change annually and funding runs out mid-season. Confirm current details with your utility before counting on a rebate. This is general information, not tax advice — consult a tax professional about your own situation.