The incentives at a glance
| Incentive | What it is | How you claim it |
|---|---|---|
| PSE Trade Ally instant rebate | An instant rebate for qualifying customers | Applied to your invoice at install, no filing |
| Federal energy-efficiency credit (25C) | A tax credit for qualifying equipment | Claimed on your federal return the following spring |
| Income-qualified PSE adder | Additional rebate for qualifying households | Applied through PSE income verification |
| Federal income-qualified rebate program | A future state-administered rebate | Once Washington activates the program |
| Battery storage credit (25D) | A federal credit if you add battery storage | Separate credit, only if pairing with a battery |
For most PSE customers, the two that matter day one are the PSE instant rebate and the federal energy-efficiency credit. Income-qualified households can add more on top.
How the PSE instant rebate works
PSE’s Trade Ally program is the most convenient incentive in the stack because it is instant. There is no paperwork on your end and no waiting for a reimbursement check. We apply it directly to your invoice at install. For qualifying customers, the PSE rebate runs $1,500 to $2,400.
To qualify:
- The equipment needs to meet PSE’s efficiency requirements.
- The installer needs to be a PSE Trade Ally.
- You need to be a PSE customer, which is worth confirming, since some Seattle homes are served by different utilities for electricity and gas.
We are a PSE Trade Ally. We handle the PSE filing internally, your invoice shows the rebate as a discount, and PSE reimburses us directly after the install is verified. Every heat pump quote we write has the rebate priced in.
The federal energy-efficiency credit
The federal credit (Section 25C) gives back 30 percent of the cost of a qualifying heat pump install, up to a yearly cap set by the IRS. For most full heat pump installs in Seattle, the calculation reaches the cap.
What qualifies:
- Equipment that meets the federal cold-climate certification.
- Installation in your primary residence, not a rental.
- Installation by a licensed contractor.
What does not:
- Equipment not on the qualifying list.
- A rental property or second home.
- A do-it-yourself install.
To claim it, your tax preparer files the federal residential energy credits form with your return, using the documentation we provide at completion (the equipment certification and your install receipt). The credit then reduces what you owe, or increases your refund, the following spring.
The panel upgrade can count toward the credit
This is the part homeowners often miss. The federal credit also covers a panel upgrade when it is required to enable the heat pump install. The panel work folds into the same yearly cap. Even when the heat pump alone would reach the cap, documenting the panel upgrade as part of the qualifying scope matters, so it is properly recorded. We make sure the documentation is right.
The income-qualified PSE adder
PSE offers an additional rebate for income-qualified households, with the amount based on your income relative to the state median. PSE handles the income verification through their program portal, and like the base rebate, the adder is applied instantly rather than as a check. If you qualify, this is one of the highest-value actions you can take, and many households who qualify never apply. We help with the documentation as part of the consult.
The federal income-qualified rebate program
The federal Inflation Reduction Act created a home electrification rebate program that each state runs its own version of. Washington’s program is still being implemented and is not yet producing rebates for most homeowners. When it comes fully online, it is expected to provide significant additional support for income-qualified households on heat pumps, water heaters, panel upgrades, and wiring. We update our quotes as the program matures, so you capture anything you qualify for.
Battery storage credit
If you pair your heat pump install with battery storage (such as Tesla Powerwall, Enphase, or FranklinWH), you can also claim the federal residential clean energy credit on the battery, which is 30 percent of the battery system’s cost. This applies only if you are installing storage, not to the heat pump itself. We mention it because some homeowners doing whole-home electrification stack everything at once.
What we do as your Trade Ally
- Price the PSE instant rebate into the quote, not as a “rebate available, ask us.”
- File the PSE paperwork on your behalf for the instant rebate and any income-qualified adders.
- Provide the documentation packet for your federal credit.
- Document the panel upgrade scope so it is properly included.
- Update you as Washington’s income-qualified program activates.
