What is the difference between pre-approval and reservation in HEAR programs?

Pre-approval is the process of verifying eligibility (income, address, household size) and confirming the specific equipment and rebate amounts before installation begins. A reservation locks those funds in the program's allocation so they cannot be committed to another project. In most states, pre-approval and reservation happen simultaneously, but in some programs they are separate steps. Always confirm a written reservation before beginning installation.

What does 'modeled savings' vs 'measured savings' mean in HOMES rebates?

Modeled savings: the projected annual energy reduction calculated using approved modeling software before any work is done. A certified energy assessor models the home's current state and the proposed upgrades. HOMES modeled pathway pays rebates based on this projection. Measured savings: the actual energy reduction verified after installation using utility bill comparison over 12+ months. The measured pathway pays based on real outcomes and requires an administrator to track consumption data.

What does POS rebate mean in HEAR programs?

POS (point-of-sale) rebates are applied at the time of purchase or installation — the contractor immediately reduces the customer's invoice by the rebate amount and is reimbursed by the program administrator afterward. New Mexico is currently the only HEAR state using a POS model (via RebateBridge), which provides instant contractor payment. All other live HEAR states use a post-installation reimbursement model where the homeowner receives rebate funds after the project is verified.

What is Area Median Income (AMI) and how does it apply to HEAR?

AMI (Area Median Income) is the midpoint income for a geographic area, set annually by HUD. HEAR has two tiers: households at or below 80% AMI receive the maximum rebate amount (up to $8,000 for heat pumps), and households between 80-150% AMI receive 50% of the maximum. Households above 150% AMI do not qualify for HEAR. AMI varies significantly by metro area — a family of 4 in San Francisco has a much higher AMI than in rural Mississippi. Always look up the specific AMI for the client's county, not a national average.

What is a Qualified Energy Conservation Bond (QECB) and how does it relate to HEAR?

QECBs are not directly related to HEAR — they are a separate municipal financing mechanism for energy conservation. They are sometimes confused with HEAR because both involve energy efficiency funding, but they operate through different channels. HEAR is a direct consumer rebate program funded by IRA appropriations administered through DOE and state energy offices.

The IRA Practitioner Brief | Home · State Tracker · Enrollment Guide · Application Mistakes

HEAR & HOMES Rebate Glossary: 35 Key Terms for Practitioners (2026)

Last updated: April 11, 2026 | The IRA Practitioner Brief

Program jargon varies across states and administrators. This glossary covers the 35 terms practitioners encounter most often across the HEAR and HOMES programs — with plain-language definitions and notes on state-specific variations.

Jump to section: Eligibility Terms Application Process Equipment & Measures Payment Models HOMES-Specific Program Structure

Eligibility Terms

AMI (Area Median Income) HEAR HOMES: The median household income for a specific geographic area, published annually by HUD. HEAR uses AMI to set rebate tiers: at or below 80% AMI = full rebate; 80–150% AMI = 50% of maximum; above 150% AMI = not eligible for HEAR. AMI varies significantly by county — always look up the specific AMI for the client's location using the AMI lookup tool.
Household Income HEAR: The total gross income of everyone in the household, used to calculate AMI percentage. Includes wages, Social Security, retirement income, and most other income sources. Some states allow deductions for dependent care or medical expenses. Variable income (self-employment, gig work) is typically averaged over 12–24 months.
Household Size HEAR: The number of people who live in the residence being improved. A larger household size increases the AMI threshold — a family of 5 can have higher income and still qualify than a family of 2. Household size is verified by the number of people listed on the application, not number of bedrooms.
LMI (Low-to-Moderate Income) BOTH: Umbrella term for households at or below 80% AMI (Low Income) and 80–150% AMI (Moderate Income). Some programs use LMI to mean only below 80% AMI — verify the definition in each state's program guidelines.
Self-Attestation HEAR: When a household declares their income meets program requirements without submitting supporting documents. The homeowner signs a form affirming their household income falls within program limits. Some states allow self-attestation for all applicants; others require document verification above certain income thresholds or for specific income types. See the income verification guide for state-by-state rules.
Document-Based Verification HEAR: Income verification using supporting documents such as W-2s, tax returns, pay stubs, Social Security award letters, or bank statements. Required by some states for all applicants and by others only when self-attestation raises questions. Documents are reviewed by the program administrator, not the contractor.
Primary Residence HEAR: The home where the applicant lives as their main dwelling. HEAR generally requires the improved property to be the applicant's primary residence. Rental properties and vacation homes are typically ineligible (though NM covers renters at ≤150% AMI and some states have LMI renter provisions).

Application Process Terms

Pre-Approval HEAR: The program's confirmation that a homeowner is eligible and that specific equipment qualifies for rebates — issued before installation begins. Pre-approval typically verifies income, confirms the property address is in the service territory, and specifies the rebate amounts for approved measures. Never begin installation without written pre-approval.
Reservation HEAR: A commitment by the program administrator to hold specific rebate funds for a particular project. Differs from pre-approval: pre-approval confirms eligibility, reservation locks the dollars so they cannot be committed to another project. In most states, pre-approval and reservation happen simultaneously. In programs with high demand (CO, MA), the reservation step protects against funding exhaustion between approval and disbursement.
Disbursement HEAR: The actual payment of the rebate, after installation is verified. In standard (non-POS) states, disbursement goes to the homeowner after they submit proof of installation and the contractor's work passes quality review. In POS states, disbursement goes to the contractor at the point of sale.
Post-Installation Inspection HEAR: An on-site review of completed work to verify that installed equipment matches the pre-approved measures and meets program standards. Conducted by the program administrator or a third-party QA firm. Some programs do sampling (1 in 10 inspections) rather than 100% review. Failed inspections can delay or deny disbursement.
Qualified Energy Professional (QEP) BOTH: A credentialed professional authorized to perform energy assessments, modeling, or inspections under a specific program. QEP requirements vary by program: some require BPI Building Analyst certification, others accept HERS raters, RESNET auditors, or licensed professional engineers. Always check the specific QEP requirements for each state program.
Participating Contractor HEAR: A contractor who has enrolled in a specific state HEAR program, submitted required credentials and insurance documentation, and been approved to perform rebate-eligible work. Homeowners can only receive HEAR rebates for work performed by a participating (enrolled) contractor. Enrollment requirements and processes vary by state. See the enrollment guide.
Pre-Installation Blower Door Test BOTH: An air leakage diagnostic performed before any air sealing work, establishing the baseline for pre/post comparison. Required by some programs to quantify air sealing improvements. Results are reported in ACH50 (air changes per hour at 50 Pascals pressure) or CFM50 (cubic feet per minute at 50 Pa). Some programs require both pre- and post-installation testing.

Equipment & Measures Terms

HSPF2 (Heating Seasonal Performance Factor 2) HEAR: A measure of heat pump heating efficiency under updated testing conditions (introduced 2023). A higher HSPF2 means more efficient heating. HEAR requires heat pump HVAC systems to meet a minimum HSPF2 of 7.5 or higher. HSPF2 ratings are roughly 15% lower than the older HSPF ratings for the same equipment — check which standard the program uses.
SEER2 (Seasonal Energy Efficiency Ratio 2) HEAR: A measure of heat pump or air conditioner cooling efficiency under updated testing conditions (introduced 2023). HEAR requires SEER2 ≥ 15.2 for heat pumps. Like HSPF2, SEER2 ratings are lower than legacy SEER ratings for the same equipment.
UEF (Uniform Energy Factor) HEAR: The efficiency metric for heat pump water heaters. HEAR requires UEF ≥ 2.2 for electric resistance water heaters to qualify as "heat pump water heaters" under the program. Higher UEF = more energy-efficient. Check the equipment guide for state-specific requirements.
Qualifying Measure HEAR: An eligible improvement type under the HEAR program, defined in IRA Section 50122. The eight qualifying measures are: heat pump HVAC, heat pump water heater, heat pump dryer, electric cooking appliance, insulation/air sealing/ventilation, electric wiring, circuit panel upgrade, and weatherization. Each has specific efficiency requirements and rebate caps.
Bundled Measure HEAR: Combining multiple eligible improvements in a single HEAR application. Insulation and air sealing must typically be combined with electrification measures (not rebatable as standalone upgrades in most states). Heat pump HVAC and heat pump water heater can be applied separately or together. Maximum total HEAR rebate per household: $14,000 regardless of how many measures are bundled.
ENERGY STAR Certified BOTH: A certification indicating that equipment meets efficiency standards set by EPA. HEAR equipment must generally be ENERGY STAR certified to qualify. Certification is listed in the ENERGY STAR product database — confirm before purchasing. ENERGY STAR requirements are updated periodically; check the version required by your state's program.

Payment Model Terms

POS Rebate (Point-of-Sale Rebate) HEAR: A rebate applied at the time of installation — the contractor reduces the customer invoice by the rebate amount and is reimbursed by the program administrator. New Mexico (via RebateBridge) is currently the only live HEAR state using a full POS model. POS eliminates the homeowner's need to wait for reimbursement and simplifies cash flow for LMI households.
Standard Rebate Model HEAR: The reimbursement model used by all live HEAR states except New Mexico. The homeowner pays full installation cost, the contractor submits documentation post-installation, and the program administrator pays the rebate to the homeowner (or in some states, directly to the contractor if designated). Processing time varies from 2 weeks (MD) to 16 weeks (CO/AZ).
Gross Cost vs. Net Cost BOTH: Critical stacking concept: Gross cost = the total project cost before any rebates. Net cost = the amount after HEAR rebates are deducted. Some utility rebate programs calculate their rebate based on gross cost; others calculate on net cost (after HEAR). Gross-basis utilities pay more — but some programs explicitly state they calculate on net cost to avoid double-dipping. Always clarify with the utility before sequencing applications.
Rebate Stacking BOTH: Combining multiple rebate sources for the same project: HEAR + HOMES + utility rebates + state programs. IRA permits stacking HEAR and HOMES. Utility rebates generally stack freely with HEAR but some prohibit combining with other rebates. Always verify the specific program's stacking rules. See the stacking guide.
Per-Household Cap HEAR: The maximum total HEAR rebate a single household can receive: $14,000 lifetime (not per year). Individual measure caps within the $14,000 limit: $8,000 for heat pump HVAC, $1,750 for heat pump water heater, $840 for heat pump dryer, $840 for electric cooking appliance, $1,600 for insulation/air sealing, $4,000 for electrical panel upgrade, $2,500 for electrical wiring.

HOMES-Specific Terms

HOMES (Home Owner Managing Energy Savings) HOMES: IRA Section 50121 program providing rebates based on whole-home energy savings. Separate from HEAR: no income limit for the market-rate tier, uses either modeled or measured savings pathways, and has its own $4.3 billion funding pool. HOMES and HEAR can be stacked. HOMES pays $2,000–$8,000 for market-rate clients and up to $16,000 for LMI households depending on savings level.
Modeled Savings Pathway HOMES: HOMES rebate pathway where rebates are based on projected annual energy savings calculated by an approved energy model before installation. A certified qualified energy professional models the home's current energy use and the proposed upgrades. Rebates are paid upon project completion without waiting for actual utility bill data. See the HOMES guide.
Measured Savings Pathway HOMES: HOMES rebate pathway where rebates are based on actual energy reduction verified through 12+ months of post-installation utility data, compared to a baseline period. More complex to administer but pays based on real outcomes. Requires the program administrator to collect and analyze utility bills. Some states implement measured pathway only after modeled pathway is operational.
Whole-Home Energy Savings HOMES: The total reduction in source (not site) energy use across all fuel types (electricity, natural gas, propane, oil) for the entire dwelling. HOMES requires minimum 20% whole-home savings for the base rebate ($2,000 market-rate) and 35%+ for the higher tier ($4,000 market-rate). LMI bonuses double these amounts.
Source Energy HOMES: Energy measured at the point of extraction, including the energy used to generate and deliver electricity (power plant + transmission losses). Source energy accounts for the full environmental and economic cost of energy, unlike site energy (measured at the meter). HOMES uses source energy for savings calculations, which means electrification projects (replacing gas with heat pumps) get credit for the upstream efficiency difference.
Audit Report / Energy Assessment HOMES: The formal report produced by a qualified energy professional documenting the home's current energy profile, diagnostic results, recommended improvements, and projected energy savings. Required for the HOMES modeled pathway. Includes blower door results, insulation levels, heating/cooling system specs, and energy model outputs. Report format requirements vary by program administrator.

Program Structure Terms

Program Administrator BOTH: The entity that manages HEAR or HOMES applications, verifies eligibility, processes payments, and handles contractor enrollment in a given state. Varies widely: some states use their state energy office directly (NC DEQ, GEFA in GA), others contract with third parties (Franklin Energy for NM, Resource Innovations for PA HOMES, EGIS BLN for PA HEAR, Everblue/APTIM for NC). Contractors interact with the administrator, not DOE.
State Energy Office BOTH: The state agency that received IRA HEAR/HOMES funding from DOE and is responsible for program oversight and compliance. Examples: Maryland Energy Administration (MEA), Colorado Energy Office (CEO), Illinois EPA, Georgia Environmental Finance Authority (GEFA). The state energy office sets program rules; the program administrator handles day-to-day operations.
Enrollment HEAR: The process by which a contractor joins a state's HEAR program as an approved participating contractor. Enrollment requirements vary by state — some require only a license and insurance (MD: 1-2 weeks), others require BPI certification and a provisional project review period (IN: 4-8 weeks). See the certification requirements guide.
Funding Exhaustion HEAR: The point at which a state's allocated HEAR funds are fully committed and new applications are no longer accepted. Exhaustion can be total (program-wide) or partial (specific geographies or measures). Projects with existing reservations are protected from exhaustion. Colorado's Front Range reached exhaustion in April 2026 — the first major metro-level exhaustion. See the funding exhaustion guide.
IRA (Inflation Reduction Act) BOTH: The 2022 federal law that created HEAR (Section 50122) and HOMES (Section 50121) and funded them with $4.5B and $4.3B respectively. Also created the 25C and 25D tax credits (which expired December 31, 2025 under the One Big Beautiful Bill Act). HEAR and HOMES are direct DOE grant programs unaffected by the 25C/25D expiration — they continue through September 30, 2031.
HEEHRA (High-Efficiency Electric Home Rebate Act) HEAR: The formal legislative name for the HEAR program. Section 50122 of the IRA. Often used interchangeably with "HEAR" — both refer to the same program. Some older program documentation and state materials use HEEHRA; newer materials generally use HEAR.
OBBBA (One Big Beautiful Bill Act) BOTH: Federal legislation signed July 4, 2025 that terminated the 25C energy-efficient home improvement tax credit and the 25D residential clean energy tax credit effective December 31, 2025. OBBBA did NOT affect HEAR or HOMES — those are direct DOE rebate programs funded through 2031. Clients with 2025 qualifying installations can still claim 25C on their 2025 tax return.
Provisional Contractor Status HEAR: A temporary enrollment tier used by some programs (notably Indiana's RGC-administered program) where a newly enrolled contractor must complete a set number of supervised projects before gaining full independent enrollment. The provisional period typically involves review of the first 3-5 projects by the program administrator before granting full participation rights.
BPI Building Analyst (BA) BOTH: The most widely required credential for HEAR contractor enrollment across live states. BPI BA Professional (BA-P) requires a hands-on field exam in addition to written exams. States requiring BA or equivalent: GA (GEFA), IN (whole-home), WA, CO, NY (NYSERDA HPwES). States accepting BPI Building Science Principles (BSP) for HVAC-only enrollment: IL (ComEd/Nicor), some NC measures. See the certification requirements guide.
Quality Control Inspector (QCI) HEAR: A BPI credential that certifies proficiency in quality assurance review of completed home performance projects. Some HEAR programs require that post-installation inspections be conducted by a QCI. QCI and BPI Energy Auditor certifications launched new exam versions in February 2026.

Related Resources

HEAR Eligible Equipment & Rebate Amounts — Complete qualifying measure list, rebate caps, efficiency standards
Income Verification Guide — AMI lookup, self-attestation vs. document requirements by state
Application Rejection Guide — 12 most common mistakes, pre-submission checklist
Contractor Enrollment Guide — State-by-state enrollment steps
Certification Requirements by State — BPI vs. RESNET vs. HVAC license per state
HOMES Program Guide — Modeled vs. measured pathways, audit requirements
Funding Exhaustion Guide — Reservation protection, CO Front Range case study
Stacking HEAR with Utility Rebates — Gross vs. net cost, sequencing