The Inflation Reduction Act of 2022 includes ways to save money with home energy efficiency upgrades. It provides qualifying homeowners a tax credit of up to $2,000 for installing a heat pump.1 It’s the largest efficiency rebate under the legislation (although local Bay Area rebate programs offered by BayREN and PCE can help save even more for some upgrades). With all the new options, you may be wondering how to save money with heat pump rebates.
How Do I Qualify for a Heat Pump Rebate?
You can qualify for the Energy-Efficient Home Improvement Credit or the High-Efficiency Electric Home Rebate Program. Some homeowners may qualify for as much as $8,000 in savings. But let’s talk about heat pumps. To qualify for a heat pump installation rebate:
- The equipment must be installed on January 1, 2023, or later
- The home must be where you live most of the time
- It must be located in the United States
- The property must be one you’re improving or adding onto (not a new construction)
The Inflation Reduction Act provides a heat pump rebate for lower-income households. Depending on eligibility and the equipment installed, it can cover 50% to 100% of the installation cost. Rebate amounts depend on income. You can get the full rebate if your household income is less than 80% of your state’s median household income or 50% if your income is 80% to 150% of the median.
The heat pump must also meet the criteria for Tier 1 or 2 of the Consortium of Energy Efficiency (CEE) to qualify for a rebate. Non-ducted heat pumps under Tier 2 won’t qualify. But a Tier 1 split-system ducted heat pump does qualify you for a tax credit of up to 30% of the system’s total cost (including labor). The tax credit renews yearly and is available through the end of 2032.
How to Claim Energy-Efficient Heat Pump Rebates for Homeowners
To apply for a federal tax credit, you must claim it on your federal income tax returns. Residential energy credits are claimed using Form 5695. Rebate programs also vary from state to state. In California, they’re being offered through utility companies and collaborations. You must apply for rebates directly through them.
For example, you can obtain a rebate through the Bay Area Regional Energy Network (BayREN) or Peninsula Clean Energy (PCE). Each organization has its own qualifying factors, which you can learn more about on our heat pump rebate page. To receive a BayREN rebate, a participating contractor will complete the rebate forms, which will require your signature. You can also qualify for a PCE rebate, but each payment is issued separately.
Silicon Valley Clean Energy (SVCE) customers can qualify for additional clean energy rebates, even if they received rebates from other programs. You can receive a rebate of up to $2,500 for an HVAC gas furnace/heat pump plus rebates for add-ons such as pre-wiring, gas meter removal, and upgrading a main breaker panel. To save, you’ll need to complete a “Rebate Activation Request” and complete the upgrade within 120 days of approval.
Start Saving Today
To receive a rebate, you must meet specific qualifications and follow the application process for the agency responsible for issuing the payment. Homeowners who make efficiency improvements can qualify for significant savings. You can also qualify for federal and state rebates at the same time (if the state rebate isn’t supported by federal funds).
To learn more about saving money with pump rebates, contact your local utility, installer, or tax advisor.
IRBIS Can Help with Energy-Efficient Heat Pump Rebates for Homeowners
We are a trusted heat pump installation, repair, and maintenance company in San Jose, CA. Our team ensures customers have access to the latest heat pump rebates and other opportunities to save on energy efficiency upgrades. To get started, schedule your appointment online, or call us at (669) 266-5464 today.