Sustainable Energy Program

Residential Incentives:

1. Review the list of participating contractors. 
2. Contact one or more of the participating contractors for bids and available incentives.
3. Once you accept and sign a quote from one of the participating contractors, they will submit the project to LES on your behalf if it qualifies for an incentive.
4. You will receive an LES credit on your invoice from the contractor.

If you don’t select a participating contractor, contact [email protected] for further instructions on applying.

Commercial Incentives:
Reach out to [email protected] for instructions on applying. 

2025 Sustainable Energy Program general guidelines

LES offers incentives for high-efficiency heat pumps and air conditioners and other energy- efficient HVAC systems to both residential and commercial customers. Heating and cooling typically accounts for 50% of energy consumed in a home or business, so upgrading your HVAC to a high-efficiency system can result in significant energy savings.

Things to Consider:

• The higher the SEER2/EER2, the more efficient the system will cool your home or building. Utilize AHRI Certification Directory to verify the efficiency.
• The higher the HSPF2 rating on a heat pump, the more efficient the system will heat your home or building. Utilize AHRI Certification Directory to verify the efficiency.
• Heat pumps offer an energy-efficient solution for both cooling and heating. In the summer, they work just like an air conditioner by extracting heat from inside your home/building. However, unlike air conditioners, heat pumps can also operate in reverse during the winter—pulling heat from the outside air (even in cold temperatures) and transferring it into your home/building. This ability to move heat makes heat pumps 3 to 4 times more efficient than gas or electric furnaces.
  • Installing a heat pump with an electric furnace offers the highest energy/cost savings. Cost savings may be affected by lower natural gas costs when a heat pump is combined with a natural gas furnace. For a cost comparison analysis, contact [email protected].
  • See the City of Lincoln/LES Heat Pump Combo section for more heat pump incentives. 

For more information on the LES incentives, program requirements, or how to apply, please refer to the program document(s) below:

Residential High-Efficiency Heat Pumps and Air Conditioners: Incentives, Guidelines, Process

Commercial High-Efficiency Heat Pumps and Air Conditioners: Incentives, Guidelines, Process

Tax Credits Available: High-efficiency heat pumps—30% up to $2,000, High-efficiency air conditioners—30% up to $600. Visit Federal Tax Credits for Energy Efficiency | ENERGY STAR.

Tax Deductions Available: Visit Tax Deductions for Commercial Buildings | ENERGY STAR.

LES offers a $500 incentive for qualifying heat pump water heaters to residential and commercial customers. These systems are 3 to 4 times more efficient than conventional electric water heaters and transfer heat from the surrounding air to the water, saving customers an average of $150 annually on electric bills. For optimal performance, make sure to follow the manufacturer’s installation guidelines.

For more information on the LES incentive, program requirements, or how to apply, please refer to the program documents below: 

Residential and Commercial Heap Pump Water Heaters: Incentives, Guidelines, Process

Tax Credits Available: 30% up to $2,000. Visit Heat Pump Water Heaters Tax Credit | ENERGY STAR.

Customers in existing homes and commercial buildings with no wall or minimal attic insulation (R-19 or less) can qualify for up to $1,500 from LES to seal penetrations and upgrade insulation levels. Incentives are available at $0.80/square foot for wall insulation and $0.50/square foot for attic insulation. A pre- and post-blower door test is required.

Improving insulation and sealing leaks in a home/building ensures a consistent indoor temperature and can help customers save up to 20% on heat and cooling costs annually.

For more information on the LES incentives, program requirements, or how to apply, please refer to the program document sheet below: 

Residential and Commercial Sealing and Insulation: Incentives, Guidelines, Process

Tax Credits Available: 30% up to $1,200. Visit Insulation Tax Credit | ENERGY STAR.

LES offers commercial and industrial customers incentives for energy-efficiency measures that result in peak demand/energy savings. Incentives include but are not limited to variable frequency drives, energy management systems, motion sensors for lights, compressed air systems upgrades, Energy Star kitchen appliances, and refrigeration upgrades. If you are considering another energy-efficient measure, it may qualify for a custom incentive from LES. Reach out to [email protected] for details on how to apply. Please note that miscellaneous commercial and industrial energy efficiency incentives require pre-authorization before installation to qualify. 

For more information on the LES incentives, program requirements, or how to apply, please refer to the program document sheet below: 

Miscellaneous Commercial and Industrial Energy Efficiency: Incentives, Guidelines, Process

Tax Deductions Available: Visit Tax Deductions for Commercial Buildings | ENERGY STAR.

Download a snapshot of the 2024 City/LES heat pump combo incentive

The best way to heat your home in the winter and cool your home in the summer is with a heat pump. Electric heat pumps are more energy efficient than other heating and cooling systems and keep your home comfortable year-round. They also reduce your household’s greenhouse gas emissions.

Lincoln residents are eligible for a City of Lincoln-funded incentive toward the purchase and installation of an air source heat pump. This may be combined with an $800 incentive from LES’ Sustainable Energy Program. Funds are available on a first-come, first-served basis until Aug. 31, 2026, or until funds are expended, whichever comes first.

If you are low-to-moderate income:

1. Check to see if you qualify for the $3,000 low- and moderate-income incentive. Your income must be equivalent to or below 80% of the Lincoln Area Median Income.
2. If you think you qualify for the low- and moderate-income incentive, contact the Urban Development Department at [email protected]. Approvals must occur before the heat pump is installed to qualify.
3. See the participating HVAC contractors. Once you have been approved by the Urban Development Department, contact one or more of the Sustainable Energy Program participating contractors for bids and available LES incentives. Contact [email protected] with any questions. 
4. Purchase and install your new heat pump through the contractor you select. The incentives will be applied as a credit on your contractor’s invoice.

If you are above moderate-income (general population):

1. See the participating HVAC contractors. Contact one or more of the Sustainable Energy Program participating contractors for bids and available LES incentives. They will apply for the City and LES incentives on your behalf. Contact [email protected] with any questions.
2. Purchase and install your new heat pump through the contractor you select. The incentives will be applied as a credit on your contractor’s invoice.

Residents of the City of Lincoln who:

• Live in and own or rent out a single-family detached home.
• Live in and own a row home, town home, condo or duplex.

The above criteria are only applicable to the City incentive. All LES customers installing qualifying heat pumps are eligible for the $800 LES incentive. Contact [email protected] for more details.  
 

• The purchase and installation of air source heat pumps or mini-split heat pumps.
• Heat pumps must replace an existing heat pump, central air conditioner, or window AC that is at least five years old. A heat pump can be matched with a gas furnace or an electric furnace.
• Heat pump must be inverter driven or have a minimum SEER2 (Seasonal Energy Efficiency Rating) of 15.2 and a minimum EER2 (Energy Efficiency Ratio) of 12.

• Any residence outside of Lincoln city limits.
• Commercial property, including multi-family housing.
• Row homes, town homes, condos and duplexes if the unit is renter occupied.
• Ground source heat pumps.
• New residential construction.
• More than one heat pump per household.
• Installation of a new heat pump without replacement of an older system.

The above criteria are only applicable to the City incentive. See the Sustainable Energy Program section or contact [email protected] for more details on LES incentives.

Federal tax credits are available for up to 30% of the cost of a new heat pump. This credit may be used in addition to the incentives from the City of Lincoln and LES. Visit EnergyStar.gov for further information. The City recommends consulting a tax professional on qualifying equipment and tax deduction details. You may also qualify for additional savings on other electrification updates. Visit the Inflation Reduction Act calculator for more information.