Many homeowners in Portland, Oregon, have decided to switch from a traditional forced air HVAC system to heat pumps. The Inflation Reduction Act provides some incentives that make that decision more enticing for many.
What Is The Inflation Reduction Act?
On August 16, 2022, President Joe Biden signed the Inflation Reduction Act (IRA) into law. This act aims to lower prescription drug prices, halt global warming, minimize the deficit, and take steps to alleviate the financial burden caused by inflation.
With more than $369 billion invested in clean energy sources, the IRA represents the federal government’s most significant legislation to tackle climate change. A primary focus of this bill was to promote clean energy technologies to improve energy efficiency.
The bill accomplishes this by offering homeowners sizable tax incentives if they purchase a heat pump. In fact, according to the IRA, some American homeowners could qualify for a free heat pump to use in their homes in 2023.
Why Is the IRA Incentivizing Heat Pump Usage?
Heat pumps are an energy-efficient alternative to the traditional forced air furnace and air conditioner. During the summer, a heat pump transfers the heat from inside to outside, making your home cooler. During the winter months, even in colder temperatures, a heat pump can transfer the heat from outside, moving it into your home. New technologies let modern heat pumps effectively warm your home, even when the outdoor temperatures are as cold as 10° below zero.
The IRA is designed to incentivize renewable energy sources, including wind, solar, and hydro. These fall under the clean energy category because they produce no carbon emissions.
With this bill, the government is trying to pull away from energy sources that rely on fossil fuels, including gas, and pivot towards electric sources. Heat pumps rely on electricity. They use less energy than traditional forced air systems because a heat pump transfers heat rather than generates it.
A significant step in moving away from energy sources that use fossil fuels is to get homeowners to upgrade to energy-efficient appliances. The IRA’s focus is creating an infrastructure that exchanges traditional energy sources for cleaner variety. In addition to being energy efficient, heat pumps offer additional benefits over traditional furnaces, including space and cost savings, reduced utility bills, improved air quality, less noise, and better safety.
How Is the IRA Incentivizing Homeowners to Purchase a Heat Pump?
This is being done thanks to the High-Efficiency Electric Home Rebate Act (HEEHRA). This is the heat pump incentive program found within the IRA.
With these incentives, homeowners can receive point-of-sale rebates on a heat pump of up to $8,000. Since it is a point-of-sale rebate, the cost is automatically deducted at the time of sale. Homeowners do not have to wait around for a refund.
The HEEHRA rebates are designed to help low- and moderate-income households. Each qualifying household will receive a rebate amount based on the style of heat pump they choose and their income level.
Households with an income 80% below the median income in their area will qualify for the maximum rebate. This could cover 100% of the cost of a new heat pump up to $8,000. Households that earn between 81 and 150% of the median income in their area could receive up to 50% off their heat pump costs.
Even homeowners whose income is more than 150% of the median income for the area can receive tax credits of up to 30% of the price of their heat pump with a max set on the refund of $2,000.
The rebates offered by HEERHA on heat pumps are more significant for low-income households. For them, a heat pump could be free. The average cost of a heat pump is around $5,800. Middle-income houses will save close to $2,900 on a new heat pump, and even homeowners above middle-income could save close to $1,740 with this tax credit. According to the Department of Energy (DOE), funding should be available for this project by 2023, with rebates being given to the public later in the calendar year.
Enjoying Highly Rated Services for HVAC in Portland, Oregon
At Climate Control, we have provided our clients with quality climate control for decades. We strive to be an efficient team focused on providing our clients with fair and honest treatment. All of our service techs are NATE-certified. We are a Carrier residential factory authorized dealer. You can count on us to address your needs promptly and courteously.
Our services include residential and commercial HVAC maintenance, repair, and installation. We provide hot water heater installation, heat pump services, indoor quality services and audits, and duct and vent cleaning. Contact Climate Control today and see what it is that sets us apart from the rest.
