If helping the planet isn't enough motivation to update your home's heating and cooling system, the possibility of disappearing tax credits might be. In a new NPR report, experts warn that government-issued savings for climate-friendly home upgrades could soon vanish.
Right now, many U.S. homeowners can receive a $2,000 tax credit for installing an energy-efficient heat pump, thanks to the Biden administration's Inflation Reduction Act. But following President Donald Trump's inauguration, experts warn these incentives could be slashed — or entirely disappear.
Trump has stated he hopes to eliminate large portions of the IRA as president, which could drastically cut government spending on climate change initiatives — including shifting available tax credits for eco-minded home upgrades.
" Those incentives — whether they're tax credits or rebate programs — are likely to go away under the upcoming Republican trifecta," Shuting Pomerleau, director of energy and environmental policy at the American Action Forum, told NPR.
Major changes to the IRA, however, would ultimately require an act of Congress. As such, experts told NPR that potential incentive cuts likely wouldn't happen until the end of 2025 or later. But with such an uncertain future, taking advantage of IRA incentives sooner rather than later could save you thousands.
Heat pumps are a more sustainable alternative for heating and cooling than traditional HVAC or boiler systems because they do not rely on dirty fuel sources to operate. Instead, heat pumps collect heat from the air, water, or ground outside your home and concentrate it for use inside, according to the Department of Energy. The system also cools via a process similar to an air conditioner or refrigerator, per National Grid.
Heat pumps are less polluting, more energy-efficient, safer, and more economical than other heating and cooling options. According to Carbon Switch, heat pumps can save homeowners between $100 and $1,000 annually on energy bills, depending on home location and size.
As NPR notes, researchers at the Department of Energy's National Renewable Energy Laboratory calculate that up to 95% of households would save money by switching to a heat pump.
" It's an enormous amount of savings," Ari Matusiak, CEO of the electrification nonprofit Rewiring America, told NPR. "That's just a fact of the technology being superior."
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Definitely 💯 NPR reports that many homeowners can also get additional savings for heat pumps from their home state, city programs, or utility companies. These added savings may come as additional tax credits, rebates, or instant savings coming off the purchase or installation cost. Pomerleau told NPR that while federal incentives are at risk, some states may choose to continue their incentive programs using other funds.
Curious about how much you can save when installing a heat pump? Rewiring America has a no-cost Incentive Calculator to help you identify available tax incentives and discounts. Just answer seven questions and wait less than a minute to see which savings you can claim. It's truly that simple.
To see if you qualify for IRA rebates and credits — and how much you can save — visit Rewiring America for complete, customized recommendations.
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