Heat Pumps

Get rebates when you install a new heat pump

Heat pumps are among the most efficient and environmentally friendly heating and cooling systems on the market. Install one in your home or business to lower your energy bills, and we’ll give you money back through our rebate program.

The benefits of heat pumps

Heat pumps don't make heat—they move it. By moving free heat available in the air or ground into your home or facility to keep you warm in the winter, and reversing the process to keep you cool in the summer, they're one of the most efficient systems available today.

  • Geothermal heat pumps are incredibly economical. They deliver more than four units of heat for each unit of energy used, which can reduce your annual heating and cooling costs by 70%.
  • Standard air-source heat pumps operate with high efficiency down to temperatures of 20-30°F and require supplemental heating during the coldest weather. When operated as part of an off-peak electric heating system they'll reduce your total heating costs by 30-50%.
  • Cold-climate air-source heat pumps operate with nearly 200% efficiency at 0°F and up to 400% efficiency at temperatures of 40°F and higher. This is thanks to inverter compressor technology. A cold-climate heat pump efficiently will meet up to 90% of space heating needs

Learn more about the types of heat pumps available to you.

Rebate eligibility and details

Qualifying high-efficiency geothermal, air-source, or cold-climate heat pumps are eligible for rebates through the Minnesota Conservation Improvement Program (CIP) and our energy control program.

  • Get a rebate of $800 per ton on geothermal heat pumps labeled ENERGY STAR or that have proof of a qualified minimum coefficient of performance (COP) rating as shown in the table below.
Type COP
  Open-loop configuration Closed-loop configuration
Water-to-air 4.1 3.6
Water-to-water 3.5 3.1
Direct-exchange 3.6


  • Get a rebate of $400 per ton on air-source heat pumps labeled ENERGY STAR or that have proof of the following ratings:
    • Split-system installation with 15.0 or greater seasonal energy-efficiency rating (SEER), 12.5 or greater energy efficiency ratio (EER), and 8.5 or greater heating season performance factor (HSPF).
    • Package-terminal heat pump installation with 12.0 or greater EER.
  • Get a rebate of $500 per ton on cold-climate heat pumps that have proof of the following ratings:
    • ENERGY STAR rated with HSPF of 10.0 or greater, or
    • Proof of ratings of 15.0 or greater SEER, 12.5 or greater EER, and 10.0 or greater HSPF, or
    • Qualify for an energy control rebate. See below for details.

 Cold-climate heat pump rebate of $500 per ton through the energy control program (not CIP) units must be:

Units must be subject to control according to the rate. Cold-climate heat pumps will be equipped with a variable capacity compressor, sized for heating season performance, and installed with a crossover set point no higher than 0°F.

Only cold-climate heat pumps installed and served as part of an off-peak system may qualify for a rebate when installed where natural gas has previously provided the primary heat source.

Rebate limits apply. Acceptable proof of your heat pump’s efficiency levels include AHRIdirectory.org certificates and manufacturer specification sheets. Heat pumps labeled ENERGY STAR will qualify for a rebate when proof is provided for the make and model installed.

If you have any questions about program eligibility, contact our Idea Center or call 800-493-3299 during business hours.

Apply for your rebate

Fill out the rebate form. When completed, mail it, along with required documentation, to:

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

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