There's been a lot of buzz about heat pump water heaters because of their potential energy bill savings and the limited-time federal incentives available to install one in your home.
This cutting-edge technology allows you to heat water considerably more efficiently than you can with traditional models while reducing your home's pollution output. However, now is the time to act on a heat pump water heater upgrade for the best savings opportunities.
According to the Department of Energy's Home Upgrades page, there is a tax credit of up to 30% for heat pump water heaters, offering homeowners up to $2,000 per year in savings.
Energy Star-certified electric heat pump water heaters may also be eligible for a Home Efficiency Rebate of up to $8,000 or a Home Electrification and Appliance Rebate of up to $1,750.
The department explains that you can submit IRS Form 5695 to access the tax credit and references a rebate portal to check the status of rebate availability based on location.
"Water heating accounts for nearly 20% of the average home's energy use and is typically the second-largest energy expense in any home, after heating and cooling," the department states. "Installing an efficient water heater can save you hundreds of dollars every year on your utility bills."
However, these tax credits are set to expire at the end of 2025, prompting a sense of urgency.
Federal tax incentives for heat pump water heaters have been helping Americans access and afford high-efficiency appliances that they might not have otherwise been able to buy.
Many people have been sharing stories on social media about how their heat pump water heaters are saving them thousands of dollars. Spreading public awareness about the incentives still available can help others understand their options when they're ready to make upgrades.
You can bring your home energy costs down even more with additional energy-efficient updates such as solar panels.
EnergySage helps homeowners save up to $10,000 and shares the expertise of vetted local installers. There's also the option of leasing solar panels with no money down to lock in low energy rates through Palmetto's LightReach program.
If you act now on buying an energy-efficient water heater from a trusted brand such as LG, you may qualify for these federal incentives before they disappear. LG offers a variety of heat pump water heaters to help you save money on your utility bills.
Homeowners have also shared that their utility companies offer rebates for heat pump water heaters, making them even more investment-worthy.
"Our utility will cut us a check for a $1,200 rebate for installing one," one Reddit user shared.
"Our local electric utility gave a $650 rebate on these also," another wrote.
"It is amazing what it costs to run and at current rates will pay for itself in less than three years," someone else said about their heat pump water heater. "We will save $500 to $700 PER YEAR compared to the old gas water heater."