If you're looking for an easy way to cut down on your energy bills, there's one upgrade that could make a huge difference — and the government will even help you pay for it.
Heat pump water heaters are one of the most efficient ways to heat water, using up to 70% less energy than traditional models. Thanks to incentives from the Inflation Reduction Act, homeowners can claim a federal tax credit of up to $2,000 when they make the switch.
The scoop
Heat pump water heaters don't heat water like traditional heaters do. Instead of creating heat from nothing, they take warmth that's already in the surrounding air and move it into your water. That uses a lot less energy, meaning your monthly bills could drop quite a bit. Energy Star estimates the typical home could save about $300 to $500 each year by switching.
The IRA makes it even cheaper to switch. Homeowners can get a 30% tax credit (up to $2,000) through the Energy Efficient Home Improvement Credit. Plus, depending on your area, there might be extra rebates from state or local programs.
How it's helping
Heat pump water heaters use way less energy than old-school models, so your monthly bills will be lower right from the start. After a while, those savings start to stack up.
They're great for the environment, too. Heating water uses up around 18% of all the energy in your house, according to the U.S. Department of Energy. So, if you switch to one of these smarter systems, you'll shrink your home's carbon footprint and use less power that comes from dirty energy.
Organizations including Arcadia and WattBuy make it easier for homeowners to find affordable, cleaner energy options. Even small upgrades, such as sealing drafty spots or choosing energy-efficient appliances, can help lower monthly bills and reduce pollution at the same time.
Cala and other companies are stepping up with smart heat pump water heaters that don't just lower your energy bills; they also make things way more comfortable at home by heating water right when you actually need it. Their systems significantly cut down your home's environmental footprint by using less power, too. You can set these systems exactly how you want, so you're saving energy but still have plenty of hot water.
What everyone's saying
One Reddit user shared that switching to a heat pump water heater cut about a third off their total energy usage, saving around 30 kilowatt-hours every day. Another noted that despite installation costs, the long-term savings quickly made up for it.
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Lower energy bills 💰 But these incentives may not stick around. President Donald Trump has consistently said he wants to eliminate clean energy subsidies, potentially putting future funding at risk. Major changes to the IRA would require approval by Congress, leaving the future of these incentives uncertain.
Upgrading to a heat pump water heater is one of the easiest ways to lower your energy bills while also making your home more sustainable. With a $2,000 tax credit available and the potential for additional rebates, now is the time to take advantage of these savings before policies shift.
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