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Heat pump rebates

Install the most efficient heating and cooling system and save big!

Stay comfortable and save with a heat pump

Heat pumps don't make heat—they move it and are efficient and environmentally friendly.

Heat pumps keep you warm in the winter, cool in the summer, and can be installed in any home or business. You’ll lower your energy bills, and we'll give you money back through a rebate on qualified equipment.

Save with three different types of heat pumps:

  • Cold-climate air-source heat pumps (CCHP) use inverter compressor technology to provide nearly 200% efficiency at 0°F and up to 400% efficiency at temperatures of 40°F. A CCHP will meet up to 90% of your heating needs, and after rebates, cost about the same as a standard central air conditioner.
  • Air-to-water heat pumps (AWHP) are a great option when paired with hydronic in-floor heating systems. AWHPs achieve efficiencies over 150%.
  • Geothermal heat pumps deliver the highest overall efficiency—reaching more than 400% efficiency to reduce annual heating and cooling costs up to 70%.

Our rebates can be claimed in addition to federal incentives when IRA requirements are met. For more information about heat pump tax credits, visit otpco.com/IRA.

Learn more about the types of heat pumps available. 

Visit our Find a contractor tool for a list of heat pump installers in your area.

Find out more about our Quality Installation program.

Eligibility and details

The following heat pumps are eligible for rebates. Rebates are based on system size measured in tons. A typical residential unit is sized at three tons to five tons. 

Cold-climate heat pump

Ductless configuration: 

  • $600-per-ton rebate when the unit is rated with a seasonal energy efficiency ratio (SEER2) of 16.0 or greater and a heating seasonal performance factor (HSPF2) rating of 9.5 or greater.
    Additional $200-per-ton rebate when the heat pump is installed by a certified contractor participating in our quality installation program.
  • Additional $40-per-ton rebate when the heat pump is subject to energy control on our Dual Fuel, Deferred Load, or Residential Demand Control Rate.

Total potential rebate: $840 per ton

Ducted configuration: 

  • $800-per-ton rebate when the unit is rated with a SEER2 of 15.2 or greater and an HSPF2 of 8.1
    or greater.
  • Additional $200-per-ton rebate when the heat pump is installed by a certified contractor participating in our quality installation program.
  • Additional $40-per-ton rebate when the heat pump is subject to energy control on our Dual Fuel, Deferred Load, or Residential Demand Control Rate.

Total potential rebate: $1,040 per ton

Air-to-water heat pump

  • $800-per-ton rebate when the unit has a 1.7 or greater coefficient of performance (COP) at an A5W110F (at an outdoor ambient air temperature of 5°F, the unit delivers 110°F supply water).
  • Additional $200-per-ton rebate when the heat pump is installed by a certified contractor participating in our quality installation program. 
  • Additional $200-per-ton rebate when a buffer tank with heating coils is added for domestic hot water preheating. Tonnage is based on the associated heat pump unit. Limit 20 tons.
  • Additional $40-per-ton rebate when the heat pump is subject to energy control on our Dual Fuel Rate.

Total potential rebate: $1,240 per ton

Geothermal heat pump

Residential customers:

  • $1,200-per-ton rebate when the unit has an ENERGY STAR® label or when it meets the minimum COP and energy efficiency ratio (EER) ratings shown in the table below.
  • Additional $200-per-ton rebate when a desuperheater is added for domestic hot water preheating. Tonnage is based on associated heat pump unit. Limit 20 tons.
  • Additional $200-per-ton rebate when the heat pump is installed by a certified contractor participating in our quality installation program.
  • Additional $40-per-ton rebate when the heat pump is subject to energy control on our Dual Fuel, Deferred Load, or Residential Demand Control Rate.

Total potential rebate: $1,640 per ton

Commercial customers:

  • $900-per-ton rebate when the unit has an ENERGY STAR® label or when it meets the minimum COP and EER ratings shown in the table below.
  • Additional $200-per-ton rebate when a desuperheater is added for domestic hot water preheating. Tonnage is based on associated heat pump unit. Limit 20 tons.
  • Additional $200-per-ton rebate when the heat pump is installed by a certified contractor participating in our quality installation program.
  • Additional $40-per-ton rebate when the heat pump is subject to energy control on our Dual Fuel, Deferred Load, or Residential Demand Control Rate.

Total potential rebate: $1,340 per ton

Geothermal heat pump ratings

Geothermal heat pump

Loop type

COP

EER

Water to air

Open loop

4.1

21.1

Water to air

Closed loop

3.6

17.1

Water to water

Open loop

3.5

20.1

Water to water

Closed loop

3.1

16.1

Direct exchange

-

3.6

16.1

GHP single unit 6 tons or greater

-

3.1

13.0

Standard heat pump

Ductless or ducted configuration: 

  • $300-per-ton rebate when the unit has a SEER2 rating of 14.3 or greater and an HSPF2 rating of 7.5 or greater.
  • Additional $200-per-ton rebate when the heat pump is installed by a certified contractor participating in our quality installation program.

Total potential rebate: $500 per ton

Rebate limits apply. Heat pumps may also qualify for federal tax credits or incentives. Contact our Idea Center or call 800-493-3299 with questions. 

Apply for your rebate

Always get and keep an AHRI certificate for your new system from your contractor. Submit a copy with your rebate application. Fill out the form below and attach all required documentation, then email it to us or send it to:

Rebates
Otter Tail Power Company
P.O. Box 496
Fergus Falls, MN 56538

2024 heat pump rebate form

2023 heat pump rebate form

Please allow 6-8 weeks for your rebate check to arrive.

Learn more about:

Heating and cooling

From heat pumps to air conditioning, better understand your options when it comes to comfort, energy savings, and discounted pricing for heating and cooling.

Inflation Reduction Act

Tax credits, rebates available.

Related programs

Residential Business

Deferred Load Rate

Store now, use later—save up to 30% on your heating and cooling costs by switching to our Deferred Load Rate.

Dual Fuel Rate

Gain the benefits of both electric heat and backup non-electric heat through use of our Dual Fuel Rates.

Electric heating rebates

Rebates are available for several electric-heating technologies.

Residential Demand Control

Get about 25% lower rate on all the electricity you use when you partner with us and use our RDC Rate.