Heat Pump Rebates in the IRA (Inflation Reduction Act) for Illinois Residents

Heat Pump Rebates in the IRA (Inflation Reduction Act) for Illinois Residents

Heat pump rebates in the IRA (Inflation Reduction Act) for Illinois residents are going to depend on your income and the heat pump equipment you and your contractor select. If you do qualify and install a qualifying heat pump system, incentives could exceed $3,500 to $5,000.

The devil is in the details, but we strongly urge every Illinois homeowner who has traditional HVAC equipment contact your trusted HVAC advisor and see how much you can save when the money becomes available.

Act Sooner to Lock in Heat Pump Savings

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Oh yeah, it’s not available until 2023, and the nitty-gritty details regarding qualifying equipment are still being worked out by our legislators and other industry advocates.

This means that by the time they set the rules, we expect to see an immediate spike in demand for eligible models. This means price increases and extended deliveries are inevitable.

So while there will indeed be opportunities for savings for the next ten years, there’s never been a better, more affordable time than right now to get your heat pump installation scheduled. This will lock in your heat pump equipment cost and get your order in the pipeline.

One last savings opportunity for those who act now is the energy savings you will most certainly reap. With the price of natural gas on an upward trajectory for the foreseeable future, it will pay you on day one to switch over to low ambient electric heat pumps for heating and for cooling.

IRA Heat Pump Rebates and Tax Credits in Illinois

Broadly speaking, every year for the next ten years, Illinois homeowners can claim a tax credit for 30 percent of the cost of qualified projects that make their home less drafty or improve energy efficiency, to an annual limit of $1,200 credit.

That means you can spend $4,000 annually to improve the comfort and efficiency of your home and the IRA will throw you up to $1,200 of that investment back in the form of tax credits and cash rebates.

Qualifying incentives include:

• Up to $600 for highly efficient heat pump air conditioners; electrical panel upgrades; and water heaters, furnaces, and water boilers that run on natural gas, propane, or oil. These products must meet Consortium for Energy Efficiency’s highest efficiency tier.
• Up to $150 for a home energy audit
• $600 for new energy-efficient exterior windows or skylights
• $500 for exterior doors

The Illinois Citizens Utility Board supports the IRA because they have long argued that climate change will cost electric customers billions in higher bills in years to come, so the board concludes that fighting climate change through strong clean energy legislation is a pro-consumer issue.

Heat Pumps are Perfect for Illinois

Politics aside, one thing is clear: the electrification of heat in the United States is not only underway, but over the next ten years, we will continue to see this trend accelerating.

Fortunately, the big winner in all this will be you, the homeowner, as your home comfort will improve and your energy use - and the energy bill for heating your home - will continue to decline.

Heat Pump Installation in Elgin, IL

The bottom line today is, none of this IRA money is available yet, nor do we know exactly when the state of Illinois will roll out its first programs. It’s safe to say that it will be sometime in 2023, but it could be several months into the year.

We expect the already high demand for heat pumps to grow even more, so if you know you want to get this done in time for next summer, we should be talking about your specific needs sooner than later.