2022 Inflation Reduction Act

Inflation Reduction Act of 2022

Qualifying homeowners can get rebates as high as:

• $840 for a heat pump clothes dryer

• $1,750 for a heat pump water heater

• $8,000 for a heat pump for space heating or cooling

Rebates for non-appliance upgrades will also be available up to the following amounts:

• $1,600 for insulation, air sealing, and ventilation

• $2,500 for electric wiring

• $4,000 for an electric load service center upgrade

To look up your area’s median income, use this tool from Fannie Mae. 

If your household income is 80% below your area’s median income, you receive the maximum rebate, covering your new heat pump at 100% up to $8,000. If your household income is 81-150% of your area’s median income, you’ll receive up to 50% of the heat pump’s cost.

To look up your area’s median income, use this tool from Fannie Mae.

You’re not out of luck if your household income exceeds 150% of your area’s median income. These homeowners receive a 30% tax credit of up to $2,000 on new heat pumps.

The HEERHA heat pump rebates are significant for low-income homeowners. According to HomeAdvisor, heat pumps cost an average of $5,792. In most cases, low-income households will get a new heat pump for free.

Middle-income households will save an average of $2,896 on a new heat pump. And above-middle-income households will get an average tax credit of $1,737.60.

State governments will execute the HEEHRA rebates. The Department of Energy will likely issue guidelines to the states in late 2022. The heat pump rebates will presumably apply to equipment purchased after January 1, 2023. 

The Department of Energy (HEAT PUMPS)  

The Department of Energy (HEAT PUMP WATER HEATERS)

Click here to see your incentives

The IRA heat pump tax credits will likely also go into effect in 2023. To receive your tax credit, save your receipt and declare it on your tax return. If you can’t wait until 2023, there is currently a lesser $300 tax credit for heat pumps that meet the Consortium for Energy Efficiency (CEE)’s top tier. Efficiency Standards (PDF)