How the Efficiency AZ Program Works

Introduction

Advantage Home Performance (AHP) created this guide to help you navigate the new Efficiency Arizona Program. Our goal is to help you take advantage of these home energy rebates to improve the comfort and efficiency of your home, and maximize the financial incentives available to you.

There are two rebate programs under the IRA Home Energy Rebate umbrella:

• HEAR – Home Electrification and Appliance Rebates
• HOMES – Home Efficiency Rebates

Currently, only the HEAR program is active. We expect HOMES to launch in late 2025, so this article focuses exclusively on the HEAR program.

The HEAR program is live in Arizona and offers up to $14,000 in rebates to low- and moderate­ income households. Many AHP customers are receiving combined Efficiency Arizona and utility rebates averaging $10,700.

As a Qualified Contractor, Advantage Home Performance has helped dozens of homeowners successfully participate in this program. We’re sharing what we’ve learned to help you do the same.

HEAR Rebate Amounts

HEAR offers point-of-sale rebates to low- and moderate-income households who switch from gas to electric ENERGY STAR® appliances. Eligible rebates include:

• $8,000 – Electric heat pump (space heating/cooling)
• $4,000 – Electrical panel upgrade
• $2,500 – Electrical wiring
• $1,750 – Heat pump water heater
• $1,600 – Insulation, air sealing, and ventilation
• $840 – Heat pump clothes dryer and/or electric stove, cooktop, range, or oven

Important: Projects must be approved before installation. Completed or in-progress jobs are not eligible unless approved through the program and installed by a Qualified Contractor.

What is the Efficiency Arizona Program?

Efficiency Arizona is funded by the Inflation Reduction Act of 2022 (IRA), which allocated energy rebate funds to individual states. Arizona received $153 million, administered by the Governor’s Office of Resiliency.

The program aims to:

• Help low- and moderate-income households afford high-efficiency electric appliances.
• Reduce household energy bills.
• Cut greenhouse gas emissions by replacing fossil fuelappliances.

Our experience shows it’s already achieving the first two goals. For example, a homeowner in Green Valley saw her utility billdrop by 34%. (See our Case Study for details.)

AHP’s Rebate Experience

Since Q2 2025, AHP has completed nearly two dozen HEAR jobs. The average rebate awarded through Efficiency Arizona and utilities is approximately $10,700.

We’ve seen:

• Up to $14,000 in HEAR rebates
• TEP utility rebates up to $1,850
• Combined rebate totals that cover 80-95% of project costs for low-income households

Program Insights from the Field

From our hands-on experience, here’s what Arizona homeowners should know:

• Application processing: Typically 3-8 weeks
• Rebates rarely cover 100% of a full HVAC replacement
• Low-income customers often receive 75-95% coverage
• Only ENERGY STAR-certified heat pumps qualify
• System type/size impacts total project cost
• Gas-to-electric conversions often require significant electrical upgrades (covered by up to $6,500 in rebates)
• Stacking rebates (program + utility) significantly reduces costs
• One AHP customer has reported up to 34% drops in utility bills after installation

Example:

A Tucson homeowner received a $14,000 HEAR rebate plus a $300 TEP rebate, paying only $175 out of pocket for a new Trane 15.2 SEER2 heat pump system.

Moderate-income homeowners typically receive 50% of project costs, up to $14,000.

Choosing a Contractor

Participation requires usingan Efficiency Arizona Qualified Contractor. You’ll be assigned one, or you can select your preferred contractor from a list.

If you’re a TEP or SRP customer, ensure your contractor is also approved in those utility rebate programs.

Why Choose Advantage Home Performance?

With offices in Phoenix, Tucson, and Prescott, Advantage Home Performance is an Efficiency Arizona Qualified Contractor with extensive program experience.

We specialize in:

• Heat pump systems
• Insulation and weatherization
• Whole-home energy solutions

Our team is BPI-certified, and AHP is one of Arizona’s largest weatherization contractors. We take a whole-home approach to energy efficiency–exactly what this program was designed for.

How to Apply

Visit EfficiencyArizona.com to:

• Review eligibility criteria and income tiers
• Start your application

If you’re not enrolled in a qualifying assistance program, you’ll need to upload income documentation for each adult in your household. Accepted documents include:

• Pay stubs (last 30 days)
• W-2s, 1099s, tax returns (most recent year)
• Benefit letters
• Bank statements for child support, alimony, etc.

Income Eligibility

Rebates are based on your household income relative to your region’s Area Median Income (AMI):

• S80% of AMI (low income): Rebates cover up to 100% of project cost
• 80-150% of AMI (moderate income): Rebates cover 50% of project cost, up to $14,000

Use the 2025 Arizona AMI tables on the Efficiency Arizona website to check your eligibility.

Categorical Eligibility

If anyone in your household is enrolled in a federally recognized assistance program (e.g., LIHEAP, SNAP, WIC, SSI, Medicaid, housing assistance). In that case, you can provide a current enrollment letter instead of income documentation.

HEAR Program Exclusions

The HEAR program supports fuel switching only—from gas to electric.

• You can’t use it to upgrade an existing heat pump or mini split.
• You can replace electric resistance/baseboard heating with a heat pump.
• The heat pump must supply at least 51% of your home’s heating/coolingneeds.
• Garages and porches are not eligible for heat pump installations under this program.