Texas Heat Pump Leasing & Installation Guide
In this guide
From humid Gulf Coast summers to cooler Panhandle winters, Texas homeowners need comfort that can adapt. Heat pumps provide efficient heating and cooling in one system, making them a practical fit for the state’s varied climate and energy needs. Palmetto is a trusted partner, helping Texans find the right installation for their home with knowledgeable guidance from planning through setup.
01
Benefits of Palmetto Heat Pumps
Say goodbye to clunky old systems and surprise repairs. Palmetto Comfort Plan gives you a brand-new heat pump, installation, and full support, all wrapped into one subscription.
Year Round Comfort
A high-efficiency heat pump keeps your home cool in summer, warm in winter, and your energy use in check all year long.
Forget the maintenance
With a Comfort Plan subscription, installation and maintenance are fully covered, no surprise bills, no weekend DIY.
Rewards for renewing
Stick with us and earn credits toward your next system upgrade. It’s our way of saying thanks for building a cleaner, comfier future with us.
02
Buy it or finance it. Your comfort, your call
There’s no wrong way to get cozy. Here’s how the options stack up, so you can choose what works best for you.
|
|
Cash |
Loan |
|
|---|---|---|---|
| Payment schedule | $0 upfront, then monthly subscription | Full price upfront | $0 upfront, then monthly payment |
| Term length | 10 or 12 years | None | Variable |
| End of term options | Flexible with 25% renewal term credits to new system | No credits to new system | No credits to new system |
| Maintenance included | |||
| Eligible for incentives |
Cash
Loan
03
Texas Heat Pump Rebates & Incentives
State and federal incentive programs can significantly reduce the cost of a new heat pump system. Here are the programs available to Texas homeowners.
Austin Energy HVAC Rebate
$650 – $950Austin Energy offers rebates for qualifying replacement heat pumps, with the amount determined by equipment efficiency tier. The heat-pump rebate is $650 to $950.
Austin Energy Water Heater Rebate
$1,000Austin Energy offers a rebate for installing a qualifying ENERGY STAR heat pump water heater in a home.
CPS Energy HVAC Rebates
$90 – $310CPS Energy offers per-ton rebates for qualifying central heat pumps and ductless mini-split heat pumps, with amounts depending on efficiency tier and whether the replacement is early or follows system failure.
Tri-County Heat Pump Rebate
Up to $200Tri-County Electric Cooperative offers a bill credit of up to $200 for installing a qualifying new heat pump or mini-split system. Funding is limited.
GVEC Heat Pump Rebate
$650Guadalupe Valley Electric Cooperative offers a $650 rebate for a qualifying new all-electric heat pump system.
El Paso Heat Pump Water Heater Rebate
$300 – $400El Paso Electric offers rebates for eligible ENERGY STAR heat pump water heaters in its Texas service territory. Income-qualified customers may receive a higher amount; the 2026 offer is available through December 31 or while funds last.
Texas has no statewide HOMES or HEAR rebate available right now, but some utilities and electric cooperatives offer active heat pump incentives in their service areas. Federal homeowner heat pump tax credits ended for systems installed after December 31, 2025. Palmetto can help homeowners identify applicable local rebates, apply, and maximize available incentives.
Incentive information is based on publicly available data as of 2026 and may change. Contact program administrators to verify current availability and eligibility requirements.
Texas Electricity Prices
Electricity rates have climbed in Texas, making how efficiently your home heats and cools worth a closer look.
Texas’s average electricity price rose from 12.1 cents per kWh in 2021 to 14.9 cents in 2024—about 23%. Rates remained below the national average in each of those years.
Heat pumps can help limit electricity use: they’re typically 2–3 times more efficient than traditional HVAC systems, delivering more heating or cooling for each unit of electricity.
Because a heat pump uses less electricity to meet a home’s heating and cooling needs, it can help soften the impact of future rate increases over its lifespan. Actual savings depend on rates, home, and system.
Price of Energy: Texas vs National Average
Texas Utility Providers
Texas electricity prices vary across retail providers, municipal utilities, and cooperatives, including Reliant, TXU, and Austin Energy. These 2023 rates (2024 data isn’t available yet) compare with a 14.50¢/kWh state average and a 16.0¢ national average.
Listed prices range from 9.79¢/kWh at Champion Energy to 19.57¢ at Gexa Energy. Rates fall both below and above the benchmarks, reflecting differences among providers and helping explain why individual prices may not match either average.
Even where electricity costs more, a heat pump’s high efficiency can reduce total energy spending compared with traditional HVAC. Electricity rates are only part of the picture: how much energy your heating and cooling system uses matters, too.
Texas Utilities Electricity Rates
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Texas Heat Pump City Guides
Explore detailed heat pump installation guides for cities across Texas. Each guide includes local utility rates, incentives, and climate-specific recommendations.
Frequently Asked Questions
Yes. Heat pumps work well across much of Texas because they provide both air conditioning and heating, and the state’s generally mild winters let them heat efficiently for much of the season. During occasional severe cold snaps, a properly sized system and suitable backup heat can help maintain comfort.
At 14.9¢ per kWh, electricity prices affect operating costs, which also vary by home and system efficiency. Palmetto offers a Comfort Plan with $0 upfront, predictable payments, and maintenance, repairs, and warranty coverage during the plan, or direct purchase with ownership and the potential to qualify for local rebates. No federal heat pump tax credit applies to systems installed in 2026.
Heat pump installation costs in Texas vary with system type, capacity, home size, and installation needs, so there is no single statewide price. Get a home-specific quote that separates equipment and labor. Texas’s average electricity price is 14.9¢ per kWh, which affects operating costs, not the upfront installation price.
Palmetto offers a Comfort Plan with $0 upfront cost, a predictable monthly payment, maintenance and repairs included for the plan’s life, and warranty coverage. Direct purchase requires a one-time payment and gives you ownership; state or utility rebates may be available. For systems installed in 2026, federal heat pump tax credits are no longer available.
There isn’t one best heat pump brand for every Texas home. Carrier, Trane, Lennox, Rheem, and Goodman offer widely available central systems, while Mitsubishi is a common option for ductless needs. Compare models—not just logos—by cooling performance, efficiency, sound, warranty, and access to qualified local service.
With Texas electricity averaging 14.9¢ per kWh, a properly sized, efficient unit and good installation can affect operating costs; actual bills depend on home and rate plan. Palmetto’s Comfort Plan has no upfront cost, predictable monthly payments, maintenance and repairs for the plan’s life, and warranty coverage; direct purchase means ownership and may qualify for state or utility rebates.
Rebates may be available in Texas, but terms vary by utility service area, equipment, and program funding; there isn’t one rebate amount for every homeowner statewide. Check your electric provider and local energy programs before installing, and confirm that the heat pump model and installer meet program rules.
For systems installed in 2026, federal 25C and 25D tax credits are no longer available. Palmetto’s direct-purchase option gives you equipment ownership and may qualify for applicable state or utility rebates. The Comfort Plan has $0 upfront, predictable monthly payments, warranty coverage, and maintenance and repairs for the plan’s life. Texas electricity averages 14.9¢/kWh.
In Texas, lease a heat pump if you prefer no upfront cost, a predictable monthly payment, and included maintenance and repairs; Palmetto’s Comfort Plan also includes warranty coverage. Buy if you can make a one-time payment and want to own the system outright, with possible access to state or utility rebates where available.
With Texas electricity averaging 14.9¢ per kilowatt-hour, compare estimated energy use and your retail electricity plan as well as the payment terms. For a heat pump installed in 2026, no federal heat pump tax credit is available; state and utility rebates may still apply, but check current eligibility and funding before choosing.
A heat pump can be financially worthwhile in Texas, especially when replacing older electric resistance heating or an aging air conditioner and furnace. Texas’s mild winters let heat pumps provide efficient heating, but savings depend on your home, equipment, electricity plan, and usage. At 14.9¢ per kWh, compare estimated annual costs before deciding.
Palmetto’s Comfort Plan has $0 upfront cost, a predictable monthly payment, and maintenance, repairs, and warranty coverage. Direct purchase means owning the system and may qualify for state or utility rebates where available. Federal heat pump tax credits ended for systems installed after December 31, 2025, so they aren’t available for 2026 installations.
There isn’t one heat pump size that fits every Texas home. The right capacity depends on your home’s square footage, insulation, window exposure, ceiling height, duct condition, and local design temperatures—from humid Gulf Coast summers to colder North Texas winters. Ask an installer to calculate heating and cooling loads rather than size by square footage alone.
A properly sized heat pump can help maintain comfort without unnecessary cycling; an undersized unit may struggle on extreme days. Palmetto offers installation through a Comfort Plan, with $0 upfront, predictable monthly payments, and maintenance and repairs included for the plan’s life, or direct purchase, which gives you ownership and may qualify for state or utility rebates where available.