Dec 5, 2023 - Climate

How to get money to install a heat pump in Washington state

Illustration of a geothermal heat pump with a dollar overlay.

Illustration: Gabriella Turrisi/Axios

If you'd like to upgrade your home heating and cooling system with an energy-efficient heat pump, several government programs exist to help — and more will be coming next year.

Why it matters: Electric heat pumps use far less electricity than conventional electric heating, and don't burn fossil fuels like natural gas-powered furnaces or boilers.

  • That makes them important tools for curbing greenhouse gas emissions that drive climate change, state and federal officials say.

Yes, but: Installing a heat pump isn't cheap, costing somewhere between $7,000 and $15,000 on average, depending on the system's design and the details of your home, the state Department of Commerce estimates.

  • Updated state building codes will soon encourage heat pumps in new construction in Washington — but with older buildings, it generally will be left up to owners when (and whether) to make the upgrade.

Here's a look at some financial assistance programs that can help.

  • Some of these rebates and credits can be used together, further offsetting costs.

Local programs

Seattle City Light customers can get rebates of $300 to $500 to help with installing a heat pump. More is possible if you're replacing an oil-burning furnace.

  • If you use Puget Sound Energy, you could qualify for up to a $4,000 rebate.

Plus: On the Eastside, residents of Redmond, Bellevue, Issaquah, Mercer Island and Kirkland can qualify for another $1,500 for a heat pump upgrade.

Federal tax credits

Through the federal Inflation Reduction Act, you can get a $2,000 tax credit if you install a heat pump between Jan. 1, 2023 and Jan. 1, 2033.

  • Homeowners can also get another $1,200 for energy efficiency improvements such as upgrading insulation.
  • The tax credits are awarded after you make the improvements, not before.

Inflation Reduction Act rebates

Washington state is getting $166 million from the Inflation Reduction Act to help people make their homes more energy efficient, which can include installing heat pumps, Liz Reichart, senior energy policy specialist at the state Department of Commerce, told Axios.

  • The money is geared toward helping low to moderate income households. The state hasn't decided yet whether to direct the money toward only the lowest of lower-income households, or to distribute it more widely; those program details are still being decided, Reichart said.
  • State officials expect to start accepting applications for rebates in mid-2024.

State programs

State lawmakers have allocated $75 million from the state's new carbon-pricing program, the Climate Commitment Act, to help Washington residents afford upgrades like heat pumps, Reichart said.

  • The state is looking at ways to pair that state money with the federal IRA rebates. That could help eligible low-income families afford the full cost of installing a heat pump, or help them complete related improvements like upgrading wiring, she said.
  • Another $35 million in state money will go toward helping low income people make their homes more energy-efficient, which may include buying heat pumps.
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