Climate-friendly heat pumps are not cheap. Rebates can help

Heat pumps have become a popular, energy-saving way to both heat and cool a home.

Installing one can easily cost $10,000 (for ductless systems) or $30,000 (for ducted systems).

Federal, state, and local governments want to encourage their adoption to help fight pollution and protect public health during extreme heat and wildfire smoke.

Here are some incentives available to lower the steep upfront cost of heat pumps, with more becoming available in 2024.

Federal tax credit

A 30% federal tax credit is available through the Inflation Reduction Act for energy efficiency and electrification projects. This can save you up to $2,000, if you pay federal income tax.

Utility programs

• Seattle City Light offers rebates of $300 to $600 for heat pumps purchased through a contractor.

• Puget Sound Energy offers rebates of $1,500 to $4,000 for converting from an electric forced-air furnace to a heat pump and, for low-income customers, a $2,400 rebate for energy efficiency upgrades.

Local Incentives

• Seattle offers a $2,000 rebate to switch from oil heat to a heat pump.

• King County will install heat pumps in 150 homes in the North Highline and Skyway-West Hill unincorporated areas free for low-income residents and at a discount for others.

• Eastside cities (Bellevue, Issaquah, Kirkland, Redmond, and Mercer Island) offer a $500 discount on some heat pumps; and a $1,500 fuel-switching incentive for qualified products. Low-income residents can have 100% of installation costs covered.

• Olympia offers a $600 to $1,000 heat pump discount; $800 savings for the first 40 participants; and free installation for low-income residents.

Coming soon:

Federal discounts

Washington state expects to receive $80 million in federal funding to subsidize heat pumps and other home energy-saving improvements.

The Washington state Department of Commerce plans public meetings this fall to hear how the federal largesse should be given out and how much should go to low-income households. The funding should be available in “mid-2024,” according to Commerce officials.

State discounts

• The Washington Legislature has allocated an additional $80 million to home energy improvement incentives over the next two years. Commerce officials aim to have those funds ready for distribution sooner in 2024 than the federal funds are available.

• The legislature also allocated $40 million to support better insulation and measures to improve low-income families’ health by improving indoor air quality.

To see what other tax credits or discounts you qualify for, including those not available until 2024, check out Rewiring America’s IRA Savings Calculator.

Information provided by Resource Media, utilities, the Washington Department of Commerce, and other agencies