Tennessee headline: The big state rebate (up to $8,000 for a heat pump) is approved but not open yet. What is live in 2026: a TVA EnergyRight rebate of $500 to $1,500 through your local power company, plus the Home Uplift program that gives income-qualified households about $10,000 in free upgrades. TVA also offers on-bill financing. The federal 25C heat pump credit expired for installs after December 31, 2025.
The state rebate: approved, not open
Tennessee has federal Inflation Reduction Act money set aside for home energy rebates (HEAR and HOMES), which will pay up to $8,000 for a heat pump for the lowest-income households and up to $4,000 for the middle tier.3
The catch is timing. As of mid-2026 the program is approved but not launched, with no confirmed start date. The Tennessee State Energy Office, inside the Department of Environment and Conservation, administers it.3
What this means for you: if your heat pump is failing now, do not wait on the $8,000 state rebate. Use the live TVA options below, and watch tn.gov/environment for the launch. If your system can safely wait, the state rebate will be worth far more.
This is the Tennessee companion to our 2026 heat pump rebate guide.
What is live now: TVA EnergyRight
Almost all of Tennessee gets power from the Tennessee Valley Authority through a local power company (LPC). The EnergyRight rebate is the same across TVA territory, but you apply through your own LPC.1
| Item | Detail |
|---|---|
| Heat pump rebate | $500 to $1,500 |
| Requirement | Must replace existing electric heating |
| Not covered | Gas-to-heat-pump conversions |
| How to apply | Through your local power company, using a Quality Contractor Network installer |
The largest local power companies are Nashville Electric Service, Memphis Light Gas and Water (MLGW), Knoxville Utilities Board (KUB), EPB of Chattanooga, and Middle Tennessee Electric. Check your electric bill to find yours.
The senior and income path: Home Uplift
This is the part many Tennessee seniors miss. Home Uplift is TVA’s no-cost program for income-qualified households, run with local power companies and community partners.2
What it gives you: an average of $10,000 in free upgrades, which can include a heat pump, insulation, duct sealing, windows, and a water heater. Eligibility is household income at or below 200% of the Federal Poverty Level.2
For a senior living on Social Security, 200% of the Federal Poverty Level is a realistic bar: in 2026 that is roughly $31,000 for a single person and $42,000 for a couple. There is usually a waitlist, so apply early through your local power company or energyright.com. Even the free energy assessment that comes with it tells you where your home loses heat.
TVA on-bill financing
If you do not qualify for Home Uplift and want to spread the cost, TVA offers $0-down, fixed-rate financing repaid through your electric bill.4
| Term | Detail |
|---|---|
| Loan amount | $2,500 to $20,000 |
| Repayment | Up to 10 years, on your monthly electric bill |
| Interest | About 6 to 8 percent fixed |
| Down payment | $0 |
For a fixed-income household that does not want a large upfront payment, this makes a heat pump reachable. You do pay interest over time, so compare the total against paying cash if you can.
Income limits for the state rebate (when it opens)
When the HEAR program launches, eligibility caps at 150% of Area Median Income (AMI), measured at the county level using HUD data.7 The highest rebate tier ($8,000) is reserved for households below 80% AMI; the 80 to 150% AMI tier qualifies for up to $4,000.
Approximate 80% AMI thresholds for a family of 4:
| County / region | 80% AMI (family of 4) |
|---|---|
| Davidson County (Nashville) | ~$76,000 |
| Shelby County (Memphis) | ~$63,000 |
| Knox County (Knoxville) | ~$66,000 |
| Hamilton County (Chattanooga) | ~$64,000 |
| Rural East Tennessee counties | ~$48,000 to $54,000 |
For a senior household on Social Security only, AMI eligibility is usually clean in any Tennessee county.
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. Applies if you pair the heat pump with solar.6
- 25C on insulation, panel upgrades, and audits: still active at smaller caps. Heat pumps are excluded.
See IRA 25C expired 2026 for the full federal picture.
Senior stack scenarios
Scenario A: Nashville retired couple, income at 180% of poverty level
- Home Uplift (under 200% FPL): about $10,000 in free upgrades, heat pump included
- Live today: roughly $10,000 in no-cost work. No need to wait on the state rebate.
Scenario B: Knoxville homeowner, KUB customer, replacing an electric furnace
- TVA EnergyRight heat pump rebate: $500 to $1,500
- TVA on-bill financing for the balance: optional
- Live today: up to $1,500 off, plus financing if wanted. Add the $8,000 state rebate later if income-eligible when it opens.
Scenario C: Chattanooga household heating with gas
- TVA EnergyRight rebate: not eligible (gas conversion excluded)
- Plan for out-of-pocket now. Watch for the state HEAR rebate, which is expected to be more flexible on fuel type, and consider the 25D credit if pairing with solar.
Verify your contractor first
A rebate is only as good as the contractor who installs the equipment. Tennessee licenses contractors through the Tennessee Board for Licensing Contractors, and the TVA rebate requires a Quality Contractor Network installer.
Red flags to reject:
- Door-to-door pitches. Legitimate contractors do not cold-call.
- A “guaranteed” state rebate. The HEAR program is not open, so nobody can guarantee it.
- No Tennessee 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 Tennessee contractor license lookup guide.
- Find your local power company on your electric bill (most of TN is TVA)
- If income is at or below 200% of poverty level, apply to Home Uplift early (waitlist)
- Otherwise claim the $500 to $1,500 EnergyRight rebate when replacing electric heat
- Ask about TVA on-bill financing if you prefer to pay over time
- Use a Quality Contractor Network installer with a valid TN license
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
- Tennessee contractor check: Tennessee contractor license lookup
- Family in other states: North Carolina, Georgia
Citations
- Heat Pump Rebate (EnergyRight). Tennessee Valley Authority, retrieved July 17, 2026. energyright.com heat pump rebate.
- Home Uplift Income-Qualified Upgrades. Tennessee Valley Authority, retrieved July 17, 2026. energyright.com home uplift.
- Home Energy Rebate Programs: Status (IRA). Tennessee Department of Environment and Conservation, State Energy Office, retrieved July 17, 2026. tn.gov home energy rebates.
- Residential Energy Efficiency Rebates and Financing (EnergyRight). Tennessee Valley Authority, retrieved July 17, 2026. energyright.com rebates.
- 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.