Heat Pump HVAC

Heat Pump HVAC

High efficiency electric heating and cooling technology for your home.

Replacing a gas furnace or boiler with heat pump HVAC is a great way to save money and reduce your carbon emissions. Heat pump HVACs come in several types, but the most common type is an air-to-air heat pump, which pulls heat from the outside air and uses refrigerants to concentrate it enough to heat a home. Most are also equipped with a reversing valve, which allow heat pump HVAC systems to cool a home just like an air conditioner.

Although heat pump HVAC might seem like a very new technology, air-to-air heat pumps have been installed for decades in warmer climates. Only recently, however, has compressor technology improved enough to allow a heat pump HVAC unit to work below 40 degrees Fahrenheit or so. Now, cold-climate-optimized heat pumps can work in temperatures far below zero.

Advantages of Heat Pump HVAC

It’s super energy efficient. Because heat pumps move heat rather than generate it, they are at least three times more efficient than conventional furnaces. This is great for reducing your carbon footprint.

It can save you a lot of money. Although comparing electrical to natural gas usage is tricky because they are two separate bills with two separate prices per unit, the average homeowner with a properly installed heat pump HVAC should stand to save significant sums on their heating bill.

It’s safer and healthier. Burning natural gas in your home creates modest risks to health due to its effect on indoor air quality and fire potential. Heat pump HVAC doesn’t create these risks.

Things to Consider

The upfront cost is higher. Replacing an existing gas furnace with another gas furnace is almost certainly cheaper. However, the cost savings on natural gas should more than cover this difference over the life of the system.

Installation costs vary. The cost of heat pump HVAC is very dependent on the required installation work. Right now, heat pump HVAC technology most seamlessly installs into homes with central air conditioning and natural gas furnaces. Adding heat pump HVAC to homes with different heating or cooling systems, like homes with boilers, is more difficult.

Old-school contractors. While heat pumps have been around for decades, only recent technological advancements have made them suitable for applications in the upper Midwest. As a result, some HVAC contractors have outdated perceptions of the technology and may even try to talk you out of it. Today, a heat pump is absolutely a reasonable choice for many Illinois or Wisconsin homeowners.

Federal Tax Credit for Heat Pump HVAC

The federal government offers a 30% tax credit (up to $2000) for the installation of a heat pump HVAC system.

You can also take credit of 30% (up to $600) for the costs of upgrading your wiring to support a heat pump HVAC system.

Heat Pump Incentives in Illinois and Wisconsin

Both Illinois and Wisconsin offer rebates to offset the cost of heat pump heating and cooling systems. In addition, the federal government offers tax credits to taxpayers who install a heat pump systems. These heat pump incentives fit into a broader set of incentives for electrifying all the gas appliances in your home. (More information for Illinois or Wisconsin.) 

Wisconsin Heat Pump Rebates

Wisconsin offers a rebate of up to $8,000 for heat pump space heating systems under its Home Electrification and Appliance Rebate (“HEAR rebate“) program. In addition, you can receive up to $6,500 for the cost of electric wiring upgrades to support the heat pump system. The HEAR program has certain income limitations, but they are fairly generous. Focus on Energy administers this rebate, which is actually funded by the federal government and exists because of 2022’s Inflation Reduction Act.

Homeowners could also possibly use the Wisconsin Home Efficiency Rebate (“HOMES rebate“), which can be up to $10,000, to cover the cost of a heat pump. The HOMES rebate is more complex to apply for but is not income limed (although the highest rebate amounts are reserved for income-qualified households). 

Finally, Focus on Energy offers a smaller rebate of up to $1,000 for heat pumps that you could use to cover costs not covered by the above rebates. 

Illinois Heat Pump Rebates

Illinois will offer rebates for heat pumps funded by the federal government as a result of 2022’s Inflation Reduction Act.  Illinois’s program is not yet live, but we expect it will be similar to Wisconsin’s but with tighter income limitations.

Federal Heat Pump Tax Credit

The federal government offers a 30% tax credit (up to $2,000) for the installation of a heat pump space heating system. You can also take credit of 30% (up to $600) for the costs of upgrading your electrical wiring to support the system. In most cases, homeowners would want to use the federal tax credit to offset any costs not covered by the rebates described above. Claim both of these credits on IRS Form 5695 as part of your federal income tax return. The heat pump tax credit is not limited by income.

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