What heat pump rebates pay in Ann Arbor
The city's page said home energy rebates were open on the day we read it. Rebates cannot be more than 90% of the cost of the measure or project.
A2ZERO cold climate heat pump
Unit on the NEEP cold climate list, 15.2+ SEER2 and 8+ HSPF2. Dual-fuel systems are not eligible.
A2ZERO ductwork
Only for changes to existing ducts so the heat pump works well. A post-install static pressure test is required.
A2ZERO heat pump water heater
UEF of 2.0 or higher, installed by a contractor.
A2ZERO electrical panel
A main panel of 200 amps or more, or a new sub-panel. Not for new construction.
DTE heat pump
Only for electric customers replacing electric heating.
State rebates (MiHER)
Paused for new income-qualified applications in five districts. Ann Arbor's district is not named on the state page.
Federal 25C and 25D tax credits
The federal home energy credits ended for work finished after December 31, 2025. A quote that counts on them is out of date.
Do the paperwork in order
The city wants you to reserve funds first, then buy, then finish within 90 days of approval. A heat pump already installed before you reserve is not the path the city describes. Ask the rebate team at 734-726-4747 if you are not sure.
Who gains most in Ann Arbor
The Census Bureau's American Community Survey (2020 to 2024) says electricity heats 26.1% of Ann Arbor homes and utility gas heats 70.7%. The electric group saves the most by switching, and can often claim both the city's and DTE's rebates. Gas homes can still claim the city's rebate, since the city's page does not require electric heat, but the savings case is weaker. A heat pump pairs well with an air conditioner that is due for replacement.
The technical rules
The city requires a contractor install, a Manual J sizing report and an AHRI certificate that lists the whole system. Reservation also needs the manufacturer, model number and certificate. Up to two mini-split systems are allowed per address. The rules list the unit as cold climate rated, so ask your installer for the NEEP list entry in writing.
Costs and the 90 percent cap
The city's rebate cannot be more than 90% of the cost of the measure or the project. For most heat pump jobs that is not a limit, but a small mini-split job might hit it. Do the math with your quote before you plan around the full $4,000.
Ask about the coldest nights
Ask each installer how the unit performs on the coldest nights and whether you should keep a backup heat source. The city requires that the unit be on the cold climate list, which helps, but a contractor's sizing report still decides what size you need.
How to claim the Ann Arbor heat pump rebate
- Pick a unit from the NEEP cold climate list that meets the city's ratings.
- Verify your income with the city if you want the $5,500 amount.
- Reserve the rebate funds before you buy and wait for approval.
- Have a contractor install it, with a Manual J report and AHRI certificate, within 90 days.
- Send in the full application. The check takes 6 to 8 weeks. Apply to DTE separately if you heat with electricity.
Common questions
How much is the Ann Arbor heat pump rebate?
$4,000, or $5,500 if household income is at or below 120% of area median income.
Does it cover a gas furnace swap?
The city's page does not say the heat pump must replace electric heat. It does say dual-fuel heat pumps are not eligible.
Is there a deadline?
You must finish within 90 days of approval. We did not see an end date for the program, so confirm funds on the city page.
Can I also get DTE's rebate?
Only if you are an electric customer replacing electric heating. DTE pays $150 to $1,200 for that case.
Does the federal credit still exist?
No. The federal heat pump credit ended for work finished after December 31, 2025.
What to do next
Back to the Ann Arbor rebate guide. Next, read the Ann Arbor insulation guide. For a gas home with no heat pump plan, see the Detroit insulation guide for DTE's attic rebate, which also applies in Ann Arbor.
By Sam Menard. Sources, last read October 6, 2026: City of Ann Arbor: A2ZERO rebates, DTE Energy: air conditioners and heat pumps, NEEP cold climate air source heat pump list, IRS: residential clean energy credit, US Census Bureau, ACS 5-year estimates 2020-2024 (heating fuel). All Ann Arbor rebates → Every Ann Arbor A2ZERO rebate →