Introduction
In August 2022, President Biden signed the landmark Inflation Reduction Act (IRA) into law. The IRA includes transformative provisions and incentives to accelerate the transition to cleaner energy across the United States. For homeowners, this presents an opportunity to make upgrades like installing heat pumps and improve energy efficiency, while benefiting from IRA rebates, tax credits, and savings on utility bills.
Heat pumps are innovative heating and cooling systems that transfer heat between indoor and outdoor environments. As an efficient alternative to furnaces and air conditioners, heat pumps can play a major role in reducing home energy use and carbon footprint. The 2023 Heat Pumps & Homeowners Index compiled by leading HVAC manufacturer METUS provides data-driven insights into homeowner perceptions, motivations, and barriers when considering heat pump adoption.
METUS IRA Fast Facts
Understanding the Inflation Reduction Act and Its Impact on Homeowners
The Inflation Reduction Act is the most ambitious climate legislation ever passed in the US. It earmarks over $370 billion for energy security and climate change programs. Importantly, it extends and expands tax credits for homeowners who invest in energy efficiency upgrades. For heat pump installations, the IRA provides a tax credit covering 30% of the system cost through 2032. This credit applies to both air source and ground source heat pumps. Additional rebates and incentives are offered by utility companies and state/local governments to further reduce upfront costs. Overall, the IRA makes it more affordable for millions of households across America to install heat pumps. With lower annual heating and cooling costs, homeowners can realize long-term utility bill savings.
The 2023 Heat Pumps & Homeowners Index: Key Findings
METUS IRA Fast Facts
METUS conducted its second annual nationwide Heat Pumps & Homeowners Index survey in October 2022. It provides data on homeowner awareness of the IRA's benefits, attitudes toward heat pumps and other upgrades, and motivations driving adoption.
Key findings from the 2023 Index include:
- 63% of homeowners are aware of the IRA's rebates and tax credits for energy-efficient upgrades.
- 76% expressed excitement about upgrading HVAC systems, ahead of other improvements like solar panels or electric vehicles.
- 67% of homeowners intend to consider heat pumps the next time their HVAC system needs replacement.
- The top motivations for installing heat pumps are energy bill savings, federal tax credits, and environmental benefits.
- 51% of respondents still face confusion about how heat pumps work and their advantages.
These insights demonstrate high homeowner interest in leveraging the IRA to install heat pumps. But knowledge gaps remain around heat pump benefits and technology.
