North Dakota headline: The live money is your utility, and Otter Tail Power has the best deal: a $40-per-kW electric heating rebate plus generous rebates for cold-climate and geothermal heat pumps, and a $150 tune-up rebate. The state HEAR rebate (up to $8,000) awaits federal approval. One warning: the state says current state-rebate offers are likely scams. The federal 25C credit expired after December 31, 2025.
North Dakota: strong utility rebate, and a scam warning
North Dakota’s state rebate is close but not open, and the state has an unusually blunt warning attached to it, so this guide starts there.
The North Dakota Department of Commerce has been allocated federal Home Energy Rebate funding but is waiting on final approval from the U.S. Department of Energy. The Department warns that any offers in North Dakota tied to these programs right now are likely scams.1 So if someone calls or knocks promising the state rebate today, it is fraud.
Your real rebate today comes from your utility.
This is the North Dakota companion to our 2026 heat pump rebate guide.
Your utility: Otter Tail Power leads
Check your electric bill, because the gap between utilities is wide.
| Utility | Service area | Heat pump rebate |
|---|---|---|
| Otter Tail Power | Eastern ND | $40/kW + cold-climate/geothermal rebates + $150 tune-up |
| Montana-Dakota Utilities | Bismarck, western ND | Mainly natural gas and lighting |
| Xcel Energy | Fargo area, east | Varies |
Otter Tail Power is the standout. It pays $40 per kW for electric heating, generous rebates for qualified cold-climate, air-to-water, or geothermal heat pumps, and a $150 rebate for a heat pump tune-up.2 Montana-Dakota Utilities focuses mostly on natural gas equipment and lighting, so it does less for an electric heat pump.3 Rural areas are often served by cooperatives with their own programs.
Buy cold-climate or geothermal, or it will not keep up
North Dakota is one of the coldest states, so equipment choice is not optional.
What to insist on: a cold-climate rated heat pump (NEEP listed) or a ground-source geothermal system that pulls steady heat from the earth. Otter Tail Power specifically rewards these, which is a strong hint about what actually performs through a North Dakota winter. Most installs keep a backup heat source for the coldest stretches.
For more on choosing equipment for extreme cold, see cold-climate heat pumps.
The senior and income path: Weatherization
For a low-income North Dakota senior, this is the live option, and it matters in a cold state. The North Dakota Weatherization Assistance Program provides income-qualified households free energy improvements such as insulation and air sealing, through local Community Action agencies.4
Why it helps: sealing and insulation cut how hard your heating works through a long, cold winter, lowering bills now and letting a smaller heat pump keep up. When the state HEAR rebate is approved, a low-income household can add up to $8,000 for the heat pump itself.
Income limits for the state rebate (when approved)
HEAR uses Area Median Income (AMI) at the county level.7 Below 80% AMI gets the highest tier (up to $8,000); 80 to 150% AMI gets 50% of project cost.
Approximate 80% AMI thresholds for a family of 4:
| County / region | 80% AMI (family of 4) |
|---|---|
| Cass County (Fargo) | ~$76,000 |
| Burleigh County (Bismarck) | ~$78,000 |
| Grand Forks County | ~$70,000 |
| Ward County (Minot) | ~$74,000 |
| Rural ND counties | ~$60,000 to $66,000 |
North Dakota AMI runs relatively high thanks to the energy economy. For a senior household on Social Security only, eligibility is usually clean.
Federal layer (2026)
The federal 25C Energy Efficient Home Improvement Credit, which paid up to $2,000 for a heat pump in prior years, expired for installs after December 31, 2025.5
What remains in 2026:
- 25D Residential Clean Energy Credit: 30% of solar cost through 2034, and it also covers geothermal heat pumps, which suits North Dakota.6
- 25C on insulation, panel upgrades, and audits: still active at smaller caps. Air-source heat pumps are excluded.
See IRA 25C expired 2026 for the full federal picture.
Senior scenarios
Scenario A: Eastern ND retired couple, Otter Tail Power, geothermal
- Otter Tail Power heat pump rebate: generous for geothermal, plus $40/kW
- Federal 25D geothermal credit: 30% of cost
- Live today: a strong utility rebate plus the 30% federal geothermal credit. Geothermal is a real option here.
Scenario B: Bismarck household, Montana-Dakota Utilities
- MDU electric heat pump rebate: limited (gas-focused)
- Live today: little from the utility for an electric heat pump. Budget accordingly and watch for the state rebate.
Scenario C: Low-income Fargo senior
- North Dakota Weatherization Assistance: free audit, sealing, insulation
- Live today: free efficiency work, with the $8,000 state rebate coming once approved.
Verify your contractor first
A rebate is only as good as the contractor who installs the equipment. North Dakota licenses contractors, and utility rebates usually require a participating contractor.
Red flags to reject, and one is specific to North Dakota right now:
- A state rebate offer today. The program is not open, and the state warns these are likely scams.1
- Door-to-door pitches. Legitimate contractors do not cold-call.
- No North Dakota license number on the quote.
- R-410A equipment for a 2026 install. That refrigerant no longer qualifies under the EPA rule.8
Verify a license in about a minute with our North Dakota contractor license lookup guide.
- Check your utility: Otter Tail Power has the best rebate
- Insist on a cold-climate or geothermal heat pump for the winters
- Ignore any state rebate offer now: the state says they are likely scams
- If income-qualified, apply for free Weatherization
- Watch commerce.nd.gov for the real $8,000 state HEAR launch
What’s next
- Federal 2026 landscape: Heat pump rebates 2026
- Post-25C federal picture: IRA 25C expired 2026
- Cold-climate equipment: Cold-climate heat pumps
- Total cost math including stacks: Heat pump cost calculator
- North Dakota contractor check: North Dakota contractor license lookup
- Family in other states: South Dakota, Minnesota
Citations
- Home Energy Rebates Program Status and Scam Warning. North Dakota Department of Commerce, retrieved August 6, 2026. commerce.nd.gov home energy rebates.
- Heat Pump Rebates and Savings. Otter Tail Power Company, retrieved August 6, 2026. otpco.com heat pump.
- Savings for Your Home (Residential Rebates). Montana-Dakota Utilities Company, retrieved August 6, 2026. montana-dakota.com savings.
- North Dakota Weatherization Assistance Program. North Dakota Department of Commerce, retrieved August 6, 2026. commerce.nd.gov weatherization.
- Energy Efficient Home Improvement Credit (25C). U.S. Internal Revenue Service. irs.gov 25C.
- Residential Clean Energy Credit (25D). U.S. Internal Revenue Service. irs.gov 25D.
- Income Limits Documentation System. U.S. Department of Housing and Urban Development, April 2026. huduser.gov income limits.
- Technology Transitions: Restrictions on Use of Certain HFCs. U.S. Environmental Protection Agency. epa.gov technology transitions.