The Inflation Reduction Act of 2022 is the nation’s largest-ever investment in climate and energy. While it aims to lower prescription drug and healthcare costs, adjust the tax code, and reduce the deficit, the legislation also provides incentives to lower energy costs. This includes tax credits for electric vehicles, rooftop solar systems, and heat pumps. Here, we’ll explain what the Inflation Reduction Act means for heat pump installation in San Jose.
According to WhiteHouse.gov, families that purchase heat pumps and other energy-efficient appliances can receive up to $14,000 in direct consumer rebates, starting on January 1, 2023.1 This is rather significant because a heat pump can cost anywhere from $4,000 to $40,000.2 Meanwhile, tax credits vary based on household income. They break down as follows:
- Low-Income Households: Up to 100% of the costs can be covered depending on the type and model of heat pump installed.
- Moderate-Income Households: Up to 50%, or $8,000, of the cost can be covered.
- Higher-Income Households: Can earn a tax credit of up to $2,000 a year for an energy-efficient upgrade.
Purchasing a geothermal heat pump can qualify a household for a 30% tax credit, as it’s the most expensive and energy-efficient option.
What Is Behind the Push for Heat Pumps?
Climate change is a leading factor behind the Inflation Reduction Act. President Biden aims to save families an average of $500 per year on energy costs.1 The initiatives don’t end at heat pumps. The plan aims to build a clean energy economy by adding millions of solar panels by 2030 as well as thousands of wind turbines and grid-scale battery plants.
Heat pumps and other efficient solutions are prioritized due to:
- Reduced Atmospheric Pollution: Burning fossil fuels contributes to particle pollution that plays a role in asthma, various medical conditions and diseases, and premature death. Clean energy helps reduce particulates associated with these. Heat pumps use no natural gas at all; they work directly off the power grid or household solar equipment.
- Reduced Greenhouse Gas Emissions: An ambitious plan to reduce emissions by 2030 is behind the incentives to install heat pumps. They emit less carbon dioxide than traditional HVAC systems. For that reason, they’ve already become a requirement in parts of Atlanta, GA, and for all new homes and apartments in Washington State.
Why Should I Install a Heat Pump Over a Furnace?
A heat pump is a bit more expensive to install than a traditional system and the federal government is working to offset some of the costs. But a tax incentive is not the only reason to invest in a heat pump. Once a heat pump is installed, it will use less energy. Since it’s less expensive to run, your energy bill from month to month should be more affordable.
It all has to do with how a heat pump works. The system moves heat from one place to another rather than burning fuel to create it. Even at relatively low temperatures, ambient heat is distributed into your home from outside in winter. During summer, the unit can operate in reverse to remove heat from your home and make it comfortably cool.
There are different types of heat pumps to choose from. An air-source unit extracts ambient warmth from the air to warm your home or release it outside. A ground source, or geothermal heat pump, can extract or release heat from underground, where it’s a relatively constant temperature all year. There are ducted and ductless heat pump systems as well, so there’s a range of options depending on your home.
Contact IRBIS for Heat Pump Installation in San Jose
Our San Jose heat pump installation experts can assist in switching to a heat pump if you have an older HVAC system or are eager to meet the latest climate standards. We’ll evaluate your needs and recommend the best model and size for your home (the most efficient unit depends on many factors, including the square footage of your house). Skilled and certified, our technicians can also diagnose, repair, and maintain your heat pump. To request a consultation or schedule service, call 669-266-5464 today.