Electric heat pumps have long been a fantastic option for both cooling and heating your home. However, they are about to become an even better choice thanks to new tax credits and rebates. Here is everything you need to know about the new heat pump tax credits and also why heat pumps are such a great choice.
Heat Pump Tax Credits and Rebates
The recent Inflation Reduction Act was partly designed to invest in technology that can help fight against climate change. As part of this legislation, the U.S. federal government has announced a variety of different tax credits and rebates for homeowners who improve their home’s energy efficiency or upgrade their appliances.
One feature of this act is the new “non-business energy property credit,” which is available for anyone who purchases and installs a new electric heat pump in their home. This credit also covers heat pump water heaters and biomass boilers. If you have any of these units installed between January 1, 2023, and the end of 2033, you will qualify for a 30% tax credit that is worth up to $2,000.
The act also sets out additional rebates for low-income families that upgrade to a heat pump. The Department of Energy is still finalizing the details of this rebate program, but it should be available beginning sometime in the middle of 2023 or possibly earlier. However, individual states must opt into this program. If the state doesn’t sign up, then its residents will not be eligible for any rebates.
Known as the “high-efficiency electric home rebate,” this program entitles low-income families that upgrade to an electric heat pump to a rebate of up to $8,000 at the time of purchase. In addition to electric heat pumps, there will also be rebates available on the purchase of electric heat pump clothes dryers, electric stoves, and heat pump water heaters.
Why Heat Pumps Are Such a Great Choice
There are two main reasons why the Department of Energy is encouraging people to upgrade to electric heat pumps for cooling and heating. The first reason is that, unlike gas furnaces, heat pumps don’t burn fuel and thus don’t produce any carbon emissions. The second reason is that heat pumps are far more energy-efficient than any other type of heating system.
Heat pumps work using a process known as heat transfer, and this is the same process that air conditioners use for cooling. In fact, a heat pump is nearly identical to a central air conditioner and works in exactly the same way when cooling. The major difference between a heat pump and a central AC unit is that a heat pump can reverse the heat transfer process to also heat your home.
As with air conditioners, heat pumps use a special refrigerant to capture and transfer heat energy between the air inside and outside the building. When cooling, the refrigerant removes heat energy from the air inside and releases it back outside the home.
The opposite happens when the heat pump is set to heating mode. In this case, the refrigerant captures heat energy from the air outside and uses this to heat the air inside the home. This process works because the heat pump compresses the refrigerant so that it is much colder than the outdoor air temperature.
Due to the laws of physics, heat energy in the air flows naturally into the colder refrigerant. This process starts to raise the temperature of the refrigerant. Before being pumped into the house, the refrigerant first flows through an expansion valve. This instantly raises the pressure of the refrigerant, which also results in it becoming much hotter.
The hot refrigerant is pumped into the coil inside your HVAC air handler. The blower fan draws cold air in through the return ductwork and into the air handler. Heat energy then naturally flows from the hotter refrigerant into the colder air.
Because heat pumps naturally absorb and transfer heat energy from the air, they use much less energy than any other type of heating device. Gas furnaces have a maximum efficiency rating of around 99%, and electric furnaces and other electric heating units have a maximum efficiency of 100%. On the other hand, heat pumps are often as much as 200% or even 300% efficient. That may sound impossible, but a heat pump functioning under the right conditions can actually transfer 300% more energy than it consumes.
Switching to a heat pump has the potential to cut your annual heating costs in half. The fact that heat pumps use much less electricity and don’t produce any emissions means that they will also reduce your carbon footprint.
If you’re considering upgrading your home in Portland or the surrounding area with an energy-efficient heat pump, Climate Control is here to help. We install, service and repair all types of residential and commercial HVAC units including heat pumps, central air conditioners, furnaces, and ductless mini-splits. We also specialize in duct cleaning, indoor air quality services, water heater installation, and zone-control HVAC systems. To learn more about the benefits of upgrading to a heat pump, give us a call today.