Swapping your outdated water heater for a high-efficiency model could slash your utility bills, and thanks to federal and state tax incentives, it might cost you less than you think. With the cost of living continuing to rise, it's imperative to find ways to lower costs — like upgrading to a heat pump water heater.
According to Rewiring America, heat pump water heaters are four times more efficient than conventional electric water heaters, which can translate to hundreds of dollars in annual savings for the average homeowner. Unlike traditional units, heat pump water heaters pull warmth from the surrounding air to heat water.
To encourage making the switch, the federal government is offering financial incentives through the Inflation Reduction Act. This includes a 30% tax credit that's capped at $2,000, and individual states are also offering additional rebates and tax incentives. Check out this database to see what your state offers. But there's a catch: These incentives might not be around forever.
President Donald Trump has repeatedly stated his intention to eliminate these subsidies, which could mean homeowners who wait could miss out on thousands of dollars in potential savings. Moving quickly to take advantage of these programs could pay off in a big way.
On top of the government incentives, there are some exciting innovations making water heaters smarter and even more efficient. One standout is Cala, a company that manufactures smart, highly customizable heat pump water heaters. Its systems intelligently heat water exactly when it's needed, helping households drastically reduce their energy usage. The result? Much lower energy bills and a smaller carbon footprint.
Besides helping homeowners save money, heat pump water heaters are a powerful tool in the fight against climate change. Since heat pumps move heat rather than create it, there's no burning of fossil fuels, which leads to less harmful carbon pollution from residential energy use. If you're looking to make the upgrade, now may be the perfect time to act — before these valuable incentives disappear.
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