Incentives and Costs
Expand each section to see amounts for different households.
Save up to $1,750
Depending on income
For low-income households (under 80 percent of Area Median Income), HEEHRA covers 100 percent of your HPWH costs up to $1,750. For moderate-income households (between 80 percent and 150 percent of Area Median Income), HEEHRA covers 50 percent of your HPWH costs up to $1,750.
Total HEEHRA discounts across all qualified electrification projects are capped at $14,000.
Depending on income
25C provides households a 30 percent tax credit for heat pumps and heat pump water heaters, capped at $2,000 per year. The credit resets each tax year, effectively becoming available again for additional projects.
25C also includes a 30 percent tax credit up to $600 for an electrical panel upgrade, but only if it’s upgraded in conjunction with another upgrade covered by 25C (like a heat pump water heater). So it might be advantageous to do both at once!
All the details
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How does it work?
Heat pump water heaters (HPWHs) are similar to heat pumps for space heating, except they produce hot water instead of hot air. In other words, HPWHs use electricity to pull heat from the surrounding air and transfer it into a hot water tank. Like heat pumps, HPWHs transfer heat instead of creating it, leading to efficiency gains, utility bill savings, and greenhouse gas reductions.
How will it save me money?
HPWHs transfer heat instead of creating it, and they don’t combust fossil fuels. As a result, they are 2-3 times more efficient than most current hot water systems. These efficiency gains translate to hundreds of dollars per year in savings for an average household.
This year, Rheem launched the first 120-volt HPWH. Because they plug into a wall outlet and don’t require any special wiring, 120-volt HPWHs will have lower installation costs and further increase household savings. We expect more 120-volt HPWHs to become available soon.
Why is it better for the environment?
HPWHs don’t combust fossil fuels! When paired with clean electricity sources like rooftop or community solar, HPWHs warm your water without warming the planet. Even without clean electricity, HPWHs are more climate friendly than other water heating systems because they use so much less total energy.
Because they are not connected to the gas grid, heat pumps also do not contribute damaging methane leaks into the atmosphere. Gas water heaters (and the gas lines connected to your house) are the source of ongoing emissions of unburned methane gas, which has many times the global warming effect of carbon dioxide.
And like other heat pumps, HPWHs will become even better for the environment as the grid becomes cleaner and manufacturers switch to new refrigerants.