Inflation Reduction Act Will Lower Your Cost for a Hybrid Water Heater

New federal law provides rebates and tax incentives for energy-efficient heat pump water heaters

No matter what’s going on around me lately, my mind keeps coming back to how can I spend less money, save more money, or continue running my household and business on the same amount of money. Everyone I talk with is a little more financially aware lately.

And since typical household operating costs are stretched, can we even consider home improvements? Or God forbid, an emergency?

Only four in ten Americans have enough in savings to cover a $1,000 emergency expense, according to a Bankrate survey. And inflation continues to increase our expenses while our incomes remain the same.

Inflation Reduction Act

You’re probably asking “Is there any good news, Phil? Any relief?” Yes. There is good news on the home improvement/household emergency front. The Inflation Reduction Act Congress recently passed provides rebates, tax credits and incentives to encourage homeowners to switch to energy-efficient appliances and home systems.

There are two main ways the Inflation Reduction Act can decrease the cost of energy-efficient appliances, like high-efficiency hybrid water heaters (aka “heat pump water heaters”).

High-Efficiency Electric Home Rebate (HEEHRA)

• What: An upfront rebate/discount at time of purchase
• How much: Maximum rebate is $1,750, specifically for heat pump water heaters
• When: Starts January 1, 2023. Program expires after ten years.
• Who: Homeowners with low-to-moderate household incomes.

Qualifying households are defined in the law as “individuals or families whose annual incomes are less than 80 percent of the area median or not greater than 150 percent of the median.”

If, like me, you have no idea how to figure out if you qualify as a low-to-moderate income household, use this benefits calculator from Rewiring America.

Energy Efficient Home Improvement Credit

• What: Tax credit, which allows you to deduct the credit from the amount of taxes owed
• How much: 30 percent of the total project cost (including appliance cost, labor, and parts). Maximum credit is $2,000 for electric heat pump water heaters.
• When: Starts January 1, 2023. Program expires after ten years.
• Who: All homeowners

Low-to-moderate income households can combine the rebate and the tax credit, according to Rewiring America’s benefits calculator. Check with an accountant to be certain.

Even more savings

In addition to these new programs the Inflation Reduction Act will introduce in 2023, there are additional rebates available now through local and state government programs. And as is the nature of rebate programs, they are temporary. If you aren’t ready to make the switch just yet, we can add you to our Rebate Waiting List when you call us (925) 872-0805.

Not only will you receive quality workmanship from our trained technicians, but we will also complete all of the necessary rebate paperwork for you. You do not have to wait for a check in the mail since the rebate is instantly deducted from your Barnett invoice. It’s a win-win situation!

After you make the switch to a high-efficiency hybrid water heater, you can expect to save at least $200 a year (for a family of four) in utility costs. Switching to hybrid from an electric water heater will save you even more on your utility bill! And combining your hybrid water heater with your solar system will save you the absolute most money every month.

What questions do you have about your water heater — hybrid or conventional? We’ll be happy to answer them and ensure you have the system that’s right for you and your family. Give us a call at (925) 872-0805.