The Inflation Reduction Act & HEAT PUMPS

Don't miss the opportunity to save even more money with the upcoming Federal Rebates and Tax Credits

What does this mean for heat pumps?
  • Tax Credit: 25C Energy Efficient Home Improvement Credit – up to $2,000 for a heat pump
    • Credit taken on tax returns
    • Available for households that pay taxes
    • Available to homeowners for their principal residence only
    • Instant Rebates – unknown at this time
When will rebates be available?
  • The revised tax incentives begin on January 1, 2023
  • Rebate: – unknown at this time.
Who is Eligible?
  • Tax Credit – Households that pay taxes (and can front the money until they file their taxes). Rental units do not qualify for the 25C tax credit.
  • Rebates – The instant rebate programs are targeted to benefit low- and moderate-income (LMI) households and disadvantaged communities

Do we know which heat pumps are eligible?

Not yet but stay tuned. At the same time that the 25C tax credit was released on January 1, 2023, a new HVAC equipment rating system (M1) was implemented by the US Department of Energy. The 25C tax credit eligibility is based on the new M1 rating system. The HVAC equipment currently available in the Pacific NW has not been rated through the new system.

The industry is currently hoping the Federal Government will approve the use of current equipment using a calculation to convert the old rating system to the new rating system. If this does not happen then we will have to wait for the manufacturers to release new equipment with the new M1 ratings.

heat pump vs air conditioner