Get pumped for the latest home electrification rebate
HEERHA is a part of the Inflation Reduction Act of 2022.
The rebate covers costs to electrify homes in low- to moderate-income households.
Qualifying households can save up to $14,000 on electrification measures.
Different electrification projects offer different max savings.
You could save almost $500 per year with rebate-approved measures.
If you’ve ever dreamed of sporting the latest environmentally friendly heat pump in your home but balked at the cost of investing in one, you may be in luck. As of August 2022, a new rebate program called HEEHRA has homeowners pumped about home electrical projects—but not everyone qualifies. Here is everything you need to know about HEEHRA rebates and whether you can save money on a heat pump and other qualifying electric upgrades.
The High-Efficiency Electric Home Rebate Act (HEEHRA) is a 10-year rebate program for low- to moderate-income (LMI) households that encourages homeowners to switch to electric home appliances and systems.
This $4.5 billion voluntary program is part of the 2022 Inflation Reduction Act (IRA), passed and signed into law by the United States Congress and President Joe Biden. The act contains several incentives, rebates, and tax credits that aim to encourage the United States to reduce carbon emissions by 40% by 2030, invest in domestic energy companies and products, and reduce inflation, to name a few.
As part of this ambitious mission, the HEEHRA rebate covers 100% of the costs to electrify homes in low-income households and 50% of the costs for moderate-income households for up to $14,000. There’s also a max contractor rebate of $500 for the installation.
Since the HEEHRA rebate likely won’t be active until 2023, it’s hard to say exactly how the rebate will work. The rebate is point-of-sale, meaning you’ll likely receive a discount upon purchasing qualifying electrification products, but you might also need to take additional measures by the time the program comes into effect.
Knowing if you qualify for a program—especially a new one—can be a little confusing. Fortunately, HEEHRA requirements are relatively straightforward: households below 150% of the area’s median income are applicable, with a few caveats. To qualify for HEEHRA, you must meet the following requirements:
Low-income households: Less than 80% of your area’s median family income
Moderate-income households: 80% to 150% of your area’s median income for families
Multifamily buildings: Above requirements apply to multifamily buildings with 50% or more LMI residents
If you’re unsure of your eligibility status, check with the U.S. Department of Housing and Urban Development (HUD) to see what the income limits are in your county. HUD’s mission is to provide housing information, improve communities, support LMI families in homeownership, and enforce housing laws that are fair to all. From there, calculate your estimated income. If your income is 150% or less than the median income in your area, you may qualify.
Most can agree that a rebate program in and of itself is beneficial, but the HEEHRA program comes with more than just saving a pretty penny. A few advantages of the program include:
Upgrading the electric furnaces and water heaters in most homes by replacing them with heat pump-operated systems could save households an average of nearly $500 per year on energy bills.
These savings on energy bills can make all of the difference for those who meet income requirements for the rebate program. Helping low- to moderate-income households save up to $500 yearly on energy bills is only one aspect of what the HEEHRA program can do, however. LMI households are more likely to use outdated, energy-inefficient HVAC and water heating systems, meaning they might also spend more on repairs for older units. A new heat pump could mean fewer funds designated for costly repairs and more peace of mind.
The Bluegreen Alliance estimates that the home energy rebates will create over 170,000 jobs in the United States. Meanwhile, the Inflation Reduction Act will create over 400,000 jobs in the cleantech industry over the next decade.
According to the U.S. Department of Energy, HVAC and water heating make up 46% of residential building emissions. Meanwhile, research from the Natural Resources Defense Council suggests that replacing natural gas heaters with electric heat pumps can decrease emissions by anywhere from 46% to 54%, while switching from natural gas to electric water heaters could reduce emissions by 50% to 70%.
Electrifying appliances like gas stoves and furnaces in the household can help improve indoor and outdoor air quality. Indoor air pollution especially impacts low-income communities, which often have outdated appliances in homes with smaller square footage compared to high-income households.
There are many qualifying electrification purchases for the HEEHRA rebate, but not every qualifying purchase has equal rebate savings. Here’s how much you can save for each installation project:
| Electrification Project | Maximum Rebates |
|---|---|
| HVAC heat pumps | $8,000 |
| Circuit breaker panel | $4,000 |
| Electrical wiring | $2,500 |
| Heat pump water heaters | $1,750 |
| Weatherization (insulation, air sealing, and ventilation) | $1,600 |
| Electric stoves and cooktops | $840 |
| Heat pump clothes dryers | $840 |
Even though the rebate isn’t live and ready to go, there are still ways that you can prepare your home for the perks of discounted electrification products and installations. Here are a few tips on how to get ready for the HEEHRA rebate in advance:
Have a local energy auditor look at your home. An auditor can help you determine ways to save money by making upgrades. They’ll recommend the best upgrades and local companies for making the most out of your electrical upgrades.
Know which products you want in your house. Once the rebate goes live, there could be a storm of homeowners on the edges of their seats, ready to purchase heat pumps. This could lower inventory nationwide. Have a list of the products you want on hand in advance to avoid waiting on backorders.
Vet top-rated contractors in your area. Just as there could be low inventory, there could also be fewer available contractors in your area to install your products. You can stay on top of long waitlists by having your contractors lined up and ready to go come time to receive the rebate.
Keep in mind: While the program is set to run through September 30, 2031, it’s unclear if homeowners will receive a retroactive rebate for purchases that take place from now until the program is fully set up. To be on the safe side, you might want to hold off on making any qualifying purchases until the official start date of the rebate.
