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A new furnace, air conditioner, or heat pump can take a pretty good bite out of your home improvement budget. If you’re replacing one in Michigan this year, though, there may be money available to help with the cost.
In 2026, homeowners have several places to look for savings, including Michigan energy rebates and programs through DTE Energy and Consumers Energy. Depending on the upgrade and your eligibility, that could mean hundreds or even thousands of dollars back.
The catch is that every program plays by slightly different rules. It’s worth sorting through the details of available incentives before you settle on a new system, especially when the difference could be thousands of dollars.
Michigan Home Energy Rebates (MiHER)
Michigan’s Home Energy Rebates program, or MiHER, can help take some of the sting out of an energy-efficient HVAC upgrade. There are two rebate programs you might come across: Home Owner Manager Energy Savings (HOMES) and Home Electrification and Appliance Rebates (HEAR).
Which one applies to you depends on what you’re upgrading, how much energy the project is expected to save, and your household income.
Home Owner Managing Energy Savings (HOMES) Rebates
HOMES looks at the energy savings across your home rather than putting a flat rebate amount on a particular furnace or air conditioner. Heating and cooling improvements can count toward those savings, along with other qualifying efficiency upgrades.
Michigan currently allows HOMES rebates of up to $20,000 per household. Your actual rebate depends on factors such as your household income, project cost, and how much energy the completed improvements are likely to save.
Home Electrification and Appliance Rebates Rebates
HEAR is geared toward households switching to qualifying high-efficiency electric equipment. In Michigan, it’s available to households earning up to 150% of their Area Median Income.
For HVAC projects, heat pumps are the big one to know about. A qualifying heat pump in Michigan can be eligible for up to $8,000 through HEAR.
You can get up to $14,000 in total rebates for your household, but that includes other eligible improvements and select electrical upgrades you’ll need for your new equipment, too.
Are MiHER Rebates Federal or State Incentives?
MiHER can be a little confusing because you’ll see many of the same rebates listed on federal energy websites. The funding comes from the federal government, but the rebates are administered by individual states. In Michigan, that happens through MiHER.
That means the HOMES and HEAR rebates listed by the U.S. Department of Energy aren’t separate incentives you can claim on top of Michigan’s versions. They’re the same programs, with Michigan setting up and administering the rebates for eligible households in the state.
How Are MiHER Rebates Calculated?
Your MiHER rebate starts with your household’s Area Median Income (AMI) at the time you apply. Michigan has a calculator you can use to figure out how much you might be able to get through MiHER (and other rebate programs).
MiHER separates applicants into two pools: households below 80% AMI and households between 80% and 150% AMI. The former is eligible for rebates covering up to 100%, while the latter is eligible for rebates of up to 50%.
Here’s how that might look for a $6,000 qualifying HVAC project:
| Household Income | Maximum MiHER Coverage | Example Rebate |
| Below 80% AMI | Up to 100% of qualified project costs | Up to $6,000 |
| 80% to 150% AMI | Up to 50% of qualified project costs | Up to $3,000 |
The percentage is only one piece of the calculation, though. The exact amount can vary a bit based on the energy savings expected from the project and the work your contractor recommends. Program limits and available funding can affect what you ultimately get, too.
Michigan Utility HVAC Rebates for 2026
Your utility company might have its own incentives to help with the cost of a more efficient heating or cooling system. DTE Energy and Consumers Energy, for example, both currently offer HVAC rebates.
DTE Energy HVAC Rebates
DTE customers can get rebates for several qualifying HVAC upgrades. A new high-efficiency central AC unit can qualify for up to $300, while eligible furnace replacements can earn rebates of up to $400.
Eligibility depends partly on your DTE service. Residential natural gas customers can qualify for furnace and thermostat replacement rebates. Residential electric customers may qualify when replacing an air-source heat pump, ground-source heat pump, or ductless mini-split.
Consumers Energy HVAC Rebates for 2026
Consumers Energy offers a handful of rebates for ACs, heat pumps, and even heating and cooling tune-ups. These rebates include:
| Qualifying Upgrade | 2026 Rebate |
| High-efficiency furnace | Up to $300 |
| High-efficiency central AC | Up to $300 |
| Air-source heat pump | $300 |
| Ground-source heat pump | Up to $300 |
| Ductless mini-split heat pump | $350 |
| Heating and AC tune-ups | Up to $65 |
What Happened to the Federal HVAC Tax Credits?
If you researched HVAC incentives in 2024 or 2025, you probably saw federal tax credits for improvements like high-efficiency air conditioners, heat pumps, and similar energy upgrades. Unfortunately, those credits aren’t available for 2026 projects.
The Energy Efficient Home Improvement Credit and Residential Clean Energy Credit ended for qualifying improvements made after December 31, 2025. That means an HVAC system installed in 2026 can’t qualify for those credits, even if the same equipment would have qualified a year earlier.
MiHER, though federally funded, is a different program and still available in Michigan. Its HOMES and HEAR rebates are funded through the Inflation Reduction Act but administered in Michigan by the Department of Environment, Great Lakes, and Energy (EGLE).
So, the end of the federal tax credits doesn’t eliminate those rebate programs.
Can You Combine Michigan HVAC Rebates?
With several rebate programs in play, it’s tempting to start adding up every dollar amount you see. While it would be nice if it did, rebates don’t always work that way, so don’t start counting those chickens before they hatch.
Some Michigan homeowners might be able to combine MiHER assistance with rebates from DTE Energy or Consumers Energy, but it depends on the project and the rules of each program. The total amount you receive also can’t exceed the eligible cost of the improvement.
Before counting on multiple rebates, check the requirements for each program and make sure your equipment qualifies for all of them. Check before installation, since some programs have contractor, application, or approval requirements that need to be handled ahead of time.
How Long Are Michigan HVAC Rebates Available?
There’s not a single expiration date for all of Michigan’s HVAC rebates.
MiHER is currently accepting applications from low- to moderate-income households, but rebates are subject to available funding. That makes it tough to say exactly how long the current rebates will last.
Funding can affect availability in specific areas, too. MiHER has temporarily paused new income-qualified applications in the Detroit District while the program reviews existing applications and funding capacity.
Once your MiHER application is approved, there’s a clock on the project itself. Your approval is valid for one year, and the work needs to be completed within that period to remain eligible for the rebate.
DTE Energy and Consumers Energy set their own rebate terms and availability. If you’re planning an HVAC replacement, check the current utility rebate before choosing your equipment rather than assuming today’s incentive will still be available once you start your project.
How Much Does HVAC Replacement Cost After Rebates?
A $300 rebate won’t cover a new furnace, but it’s still $300 you don’t have to spend. Qualify for one of MiHER’s larger rebates, and the difference can be much more substantial.
Here’s an example of what HVAC replacement could cost after rebates:
| HVAC Project | Typical Cost | Potential Rebate Savings | Potential Cost After Rebates |
| Furnace replacement | ~$4,300 | Up to $400 through DTE or $300 through Consumers Energy; MiHER may also apply | About $3,900 with a $400 utility rebate |
| Central AC replacement | ~$3,600 | Up to $300 through DTE or Consumers Energy; MiHER may also apply | About $3,300 with a $300 utility rebate |
| Heat pump replacement | ~$5,200 | Up to $8,000 through HEAR for eligible households, plus a potential utility rebate | Potentially as low as $0 for eligible project costs |
Your quote might not be the same as these estimates. These are just averages for each unit type, so your actual replacement costs could vary.
And those big MiHER numbers need a little context.
An $8,000 maximum heat pump rebate doesn’t mean you receive an $8,000 check for a $5,200 installation. The rebate can’t exceed the eligible project cost, and your household still has to meet the program requirements.
The utility examples above are simpler estimates based on subtracting the maximum listed rebate from the typical project price.
Who Qualifies for Michigan HVAC Rebates?
There isn’t one set of requirements that fits all of the HVAC rebates available in Michigan. Your income matters for MiHER, while the utility programs look at things like your service provider and the efficiency of the equipment you install.
Here are a few requirements to check before planning around a rebate:
- Household Income: MiHER eligibility and rebate levels depend on where your household falls relative to AMI.
- Utility Service: DTE and Consumers Energy have their own customer requirements, and some DTE rebates depend on whether the home receives electric or natural gas service.
- Equipment Efficiency: Air conditioner, furnace, and heat pump rebates may require specific AFUE, SEER2, EER, or other efficiency ratings.
- Your Contractor: MiHER work must be completed by an approved MiHER Registered Contractor, and DTE replacement rebates require a participating contractor.
- The Project Itself: DTE’s furnace and central AC replacement rebates don’t cover new construction or first-time installations.
Check these eligibility requirements before you settle on equipment. That way, you’re not banking on a rebate your project doesn’t qualify for.
How to Apply for HVAC Rebates in Michigan
The best time to look into HVAC rebates is before you pick out your new system. A furnace, air conditioner, or heat pump can be highly efficient but still fall short of the requirements for a particular rebate.
Once you know what rebate you’re going after, check its requirements before the project starts.
MiHER
For MiHER, start by checking your household income against the program’s eligibility requirements and submitting an application. Once your application is accepted, you’ll choose a contractor from the MiHER-approved directory and schedule a home assessment.
Your contractor will identify eligible upgrades, estimate your rebate, and complete the approved work. After the project is done, MiHER pays the rebate directly to the contractor, so you don’t have to pay the covered rebate amount upfront.
DTE Energy
For DTE’s furnace and central AC replacement rebates, start with the utility’s Find a Contractor tool and choose a participating contractor in your area.
The contractor will help you pick qualifying equipment and complete the installation. They’ll also submit the rebate form online for you. DTE says the rebate check should arrive by mail within six to eight weeks.
Consumers Energy
Consumers Energy follows a pretty similar process. Pick a participating contractor from its contractor directory and have them install the qualifying equipment. The contractor submits the rebate application and required documentation electronically for you.
When all of that is said and done, you can expect your rebate check within six to eight weeks.
Frequently Asked Questions
Rebate programs come with plenty of fine print, and a few questions tend to come up once homeowners start figuring out what they can actually use. Here are some of the questions we get most often.
Are there federal tax credits in 2026?
Nope. The Energy Efficient Home Improvement Credit and Residential Clean Energy Credit ended for qualifying improvements made after December 31, 2025. Michigan homeowners can still take advantage of eligible MiHER and utility rebates in 2026.
How much can I get for an HVAC rebate in Michigan?
That depends on the program and your project. MiHER rebates can reach up to $20,000 per household through HOMES, while HEAR allows up to $14,000 in total rebates per household. Utility HVAC rebates are generally smaller, often coming in at a few hundred dollars for qualifying equipment.
Can I get a Michigan rebate for replacing my furnace?
Possibly. Qualifying furnace replacements may be eligible for MiHER or utility rebates. DTE offers furnace rebates of up to $400 for eligible residential natural gas customers, while Consumers Energy offers up to $300 depending on the furnace’s efficiency rating.
Are there Michigan rebates for new air conditioners?
Yes. DTE offers up to $300 for qualifying high-efficiency central air conditioners, and Consumers Energy offers up to $300 depending on the unit’s SEER2 rating. An AC replacement may also be eligible through MiHER, provided it meets the program’s requirements.
Can I get $8,000 toward a new heat pump in Michigan?
It’s possible. Michigan’s HEAR program offers up to $8,000 toward qualifying heat pumps for eligible households. The amount you receive depends on the program requirements and eligible project costs, so an $8,000 rebate isn’t automatic with every heat pump installation.
Do I have to pay for a MiHER project upfront?
Not for the portion covered by your approved MiHER rebate. After the approved work is done, MiHER pays the rebate directly to the contractor. That means you’re only responsible for whatever’s not covered.
Can I apply for a rebate after my new system is installed?
Not usually. MiHER requires you to apply and receive acceptance before choosing an approved contractor and completing the required home assessment.
DTE and Consumers Energy also require you to go through approved contractors and have their own requirements, so it’s important to check the specifics of the rebate terms before installation begins.
Save on Your 2026 HVAC Upgrade With Dynamic HVAC
A rebate can make a new HVAC system a little easier on the budget, but you don’t want to find out after installation that the equipment you choose missed the requirements by a hair.
Our team can help you compare your options and choose equipment that makes sense for your home and available rebates. If your furnace, air conditioner, or heat pump is due for replacement, contact Dynamic HVAC today to get started.
Sources & References
- Angi – “How Much Does It Cost to Install a New Furnace in Detroit, MI?”
Breaks down furnace installation costs in the Detroit area, including average prices and common factors that can raise or lower the final cost of a replacement.
https://www.angi.com/articles/how-much-does-it-cost-install-new-furnace/mi/detroit - Angi – “How Much Does Installing a New AC Cost in Detroit, MI?”
Provides local air conditioner installation costs for Detroit homeowners, including typical price ranges and factors that can affect the total cost of a new cooling system.
https://www.angi.com/articles/how-much-does-installing-new-ac-cost/mi/detroit - Angi – “How Much Does a Heat Pump Cost?”
Breaks down typical heat pump installation costs, including average prices for different types of systems and the factors that can influence the final project cost.
https://www.angi.com/articles/how-much-does-heat-pump-cost.htm - Consumers Energy – “Heating and Cooling Rebates”
Lists current heating and cooling rebates available to qualifying Consumers Energy customers, including incentives for furnaces, central air conditioners, heat pumps, ductless mini-splits, and HVAC tune-ups.
https://www.consumersenergy.com/residential/savings-and-clean-energy/rebates/heating-and-cooling - DTE Energy – “Air Conditioners”
Explains DTE’s rebates for qualifying high-efficiency central air conditioners, including customer eligibility, equipment requirements, participating contractor requirements, and the rebate process.
https://www.dteenergy.com/us/en/residential/save-money-energy/rebates-and-offers/air-conditioners.html - DTE Energy – “Furnaces”
Explains DTE’s furnace replacement rebates, including available rebate amounts, customer and equipment eligibility, participating contractor requirements, and how rebate applications are submitted.
https://www.dteenergy.com/us/en/residential/save-money-energy/rebates-and-offers/furnaces.html - ENERGY STAR – “Federal Tax Credits”
Provides current information about federal residential energy-efficiency tax credits, including changes to credit availability and the deadlines that apply to qualifying home improvements.
https://www.energystar.gov/about/federal-tax-credits - Michigan Department of Environment, Great Lakes, and Energy – “Michigan Home Energy Incentives Calculator”
Provides Michigan homeowners with a calculator for checking household income levels and identifying potential home energy incentives based on income and other household information.
https://www.michigan.gov/egle/regulatory-assistance/funding/multi/michigan-home-energy-incentives-calculator - Michigan Department of Environment, Great Lakes, and Energy – “Michigan Home Energy Rebates Programs”
Explains Michigan’s Home Energy Rebates program, including HOMES and HEAR rebate amounts, income eligibility, application steps, participating contractor requirements, and current program availability.
https://www.michigan.gov/egle/about/organization/materials-management/energy/rfps-loans/home-energy-rebate-programs
