Tax Incentives
Part of the Inflation Reduction Act (IRA), the HEEHR outlines rebates to cover point-of-sale costs for electrifying homes in low- to moderate-income households. The intention is to help US families save money on their monthly energy bills, improve the quality of indoor air environments, and reduce their carbon emissions for sustainability.
Overview
HEEHR is a rebate program that covers 100% of electrification project costs up to $14,000 for low-income households and 50% of costs up to $14,000 for moderate-income households. Households where income is more than 150% of adjusted median income (AMI) are not eligible. For multifamily, 50% of the households in the building need to meet the income eligibility requirements.
Funds are administered through the state energy offices, which have some leeway on program particulars. HEEHR will be available sometime in the second half of 2024. This is subject to the Department of Energy (DOE) and individual states for implementation time lines.
Status
COMING SOON
Qualified electrification projects include heat pump HVAC systems (air pump and geothermal), heat pump water heaters, electric stoves and cooktops, heat pump clothes dryers. Projects can also include enabling measures such as upgrading circuit panels, insulation, air sealing, ventilation, and wiring. Products must be ENERGY STAR® compliant. Project costs covered include both purchase and installation expenses.
Following are the maximum rebates you as a homeowner can possibly claim from the HEEHR program:
HEEHR rebates can stack with federal energy efficiency and electrification tax credits (e.g., 25C). Note: HEEHR rebates cannot be combined with HOMES rebates.
Following is the breakdown of the HEEHR rebate incentives, including the breakdown of potential tax credits for homeowners:
Up to:
Heat Pumps = $8,000
Elec Service Upgrade = $4,000
Electric Wiring Upgrade = $2,500
Insulation, Leakage Sealing, Ventilation = $1,600
Installation Maximum = $50050% of the project cost
AC, Split = 15.2 SEER2, 12.0 EER2
AC, PAC = 15.2 SEER2, 11.5 EER2
Heat Pump, Split = 15.2 SEER2, 11.7 EER2, 7.8 HSPF2
Heat Pump, PAC = 15.2 SEER2, 10.6 EER2, 7.2 HSPF2
Rebate based on AMI
100% Rebate if AMI < 80%
50% Rebate if AMI 80% to 150%
0.0% Rebate if AMI > 150%
Rebates are per household
Cannot be combined with HOMES
Products must meet the SEER2, EER2, and HSPF2 requirements outlined by ENERGY STAR® to qualify for the HEEHR rebate.
Following are requirements for air conditioning and heat pump systems:
| Product Type | SEER2 | EER2 |
|---|---|---|
| CAC Split Systems | ≥15.2 | ≥12.0 |
| CAC Single Packaged Equipment | ≥15.2 | ≥11.5 |
*Including gas/electric package central AC units
| Product Type | SEER2 | EER2 | HSPF2 |
|---|---|---|---|
| HP Split Systems | ≥15.2 | ≥11.7 | ≥7.8 |
| HP Single Packaged Equipment* | ≥15.2 | ≥10.6 | ≥7.2 |
*Including gas/electric heat pumps, which are not eligible for the Cold Climate designation.
| Product Type | SEER2 | EER2 |
|---|---|---|
| HP Split Systems (Non-Ducted) | ≥15.2 | ≥8.5 |
| HP Split Systems (Ducted) | ≥15.2 | ≥8.1 |
| HP Single Packaged Equipment* | ≥15.2 | ≥8.1 |
*Excludes gas/electric package heat pumps, which are not eligible for the Cold Climate designation.
Find a pro
As part of the Inflation Reduction Act, states were given the option to apply for federal funding to support the High-Efficiency Electric Home Rebate (HEEHR) and the Home Owner Managing Energy Savings (HOMES): Rebate Programs. States have the option to opt out of the programs if they wish or apply for federal funds. To see your states application status, and learn more about the program see the link below.
Home Energy Rebates Program: Status of State Applications | Department of Energy
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