Heat pumps are a fantastic way to comfortably heat and cool your home while saving money on energy bills. Now is a great time to add them to your home thanks to federal Inflation Reduction Act heat pump tax credits and rebates.

These tax credits and rebates cover much, or sometimes all, of the purchase and installation of eco-friendly heat pumps and water heaters that use heat-pump technology. The Inflation Reduction Act heat pump discounts are a great way to add energy efficiency to your home at a deeply reduced price.

What Is a Heat Pump?

Air-source heat pumps are more economical than a traditional furnace because they transfer heat from one place to another instead of making heat. Instead, a heat pump pulls outside air into a building or vice versa. This process is known as heat exchange.

In addition to being energy efficient, heat pumps allow you to heat your entire home — including any rooms your current HVAC system doesn’t reach. So, goodbye to rooms that are hot and stuffy or way too cold. They also come with filters that improve the air quality in your home.

At Lakeside Heating and Air Conditioning, we install ducted heat pumps that push air through your home’s ductwork as well as ductless mini-splits that do not require any ductwork. We also install heat pump water heaters, which are two to three times more efficient than water heaters that rely on electricity alone.

Since 1971, Lakeside Heating and Air Conditioning has been the top choice for heat pump installation in Denver, CO. Call us today to learn about how a heat pump or water heater can reduce your energy bills.

What Is the Inflation Reduction Act?

The Inflation Reduction Act of 2022 created a $369 billion bundle of federal programs designed to reduce the rate of inflation in the country and its impact on residents. A portion of that investment is aimed at making green technology and climate-friendly home-improvement programs.

Several programs include significant rebates and tax credits for homeowners who purchase heat pumps, water heaters and other energy-efficient home upgrades. It’s a great deal for homeowners. You can save money on home improvements and lower your monthly utility bills.

How Will the Inflation Reduction Act Affect Me?

How homeowners get Inflation Reduction Act heat pump tax credits and rebates depends on their incomes. There are two programs available: High-Efficiency Electric Home Rebate Act (HEERA) rebate and the Inflation Reduction Act tax credits.

How do these Inflation Reduction Act heat pump tax credit and rebate programs work? Here’s a closer look:

  • High-Efficiency Electric Home Rebate Act (HEEHRA): The HEEHRA program offers a heat pump rebate through the Inflation Reduction Act. Available to low-income and moderate-income families, the HEERA rebate covers up to 100% of eligible heat pump and water heater purchases and installation for low-income homeowners. It also covers up to 50% for moderate-income homeowners. Participants can use the rebate for multiple upgrade purchases, but there is a monetary cap at $14,000 per customer.

What Are the HEERA Income Levels?

  • Low-Income Homeowners: Income less than 80% of the area median income.
  • Moderate-Income Homeowners: Income of 80-150% of the area median income.
  • Inflation Reduction Act Tax Credits: Homeowners whose incomes don’t meet HEEHRA limits are eligible for a tax credit. Starting on Jan. 1, 2023, the Inflation Reduction Act heat pump tax credit offers a 30% tax credit on the purchase and installation of heat pumps — with a maximum credit of $2,000 for a heat pump. Homeowners can make additional green energy upgrades to their home through the program but are limited to a total of $3,200 in tax credits per year.

Additional Heat Pump Rebates for Denver, CO, Residents

On top of the federal rebates, there’s an extra set of Denver heat pump rebates available. These rebates offered by the city of Denver provide $1,500 to $3,500 rebates for air-source heat pumps. The city also offers other rebates for energy-efficient home upgrades.

What Heat Pumps Qualify for the Inflation Reduction Act?

Only highly efficient heat pumps are eligible for the Inflation Reduction Act rebates and tax credit. They must at least have ENERGY STAR® certification in order to be eligible for the HEEHRA or tax credit programs.

Ask our experienced pros at Lakeside Heating and Air Conditioning for more details on which heat pumps, mini-split heat pumps and water heaters are covered by the discounts.

How Do I Get the Inflation Reduction Act Rebate?

Getting an Inflation Reduction Act rebate or tax credit is easy. It has two programs that work in different ways:

HEEHRA Rebate: HEEHRA rebate will be provided at the time of purchase — acting like a discount to the price of a heat pump purchase and installation. Exact details of how HEEHRA will work has not been released yet by the Department of Energy.

Tax Credit: Those whose incomes don’t qualify for the HEEHRA rebate can instead claim the tax credit. The credit reduces the amount of money a purchaser owes the Internal Revenue Service (IRS) on their taxes.* It can be claimed the same tax year the heat pump was purchased. So, keep your receipts!

*Consult with a tax professional for details on how to apply.

Call Lakeside Heating & Air Conditioning to Learn More About Heat Pump Rebates

The Inflation Reduction Act tax credits and rebates are great ways to save money on a high-efficiency heat pump or water heater. It’s better for the environment and your checkbook.

The home comfort experts at Lakeside Heating and Air Conditioning have the latest details on these and other discount programs. Our skilled crews are known for superior heat pump and water heater installation in Denver, CO, and surrounding communities.

Put our experience to work for you. Reach out today to schedule an appointment and find out more about how you could save money on a heat pump.