4 Reasons To Upgrade to a Heat Pump (Even If You Don’t Qualify for a $2,000 Tax Credit)
Written by
Stephanie Mickelson
Edited by
Rebekah Evans
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Heat pumps offer an energy efficient alternative to traditional heating and cooling systems. One of the incentives to install one in recent years has been a federal tax credit under the Energy Efficient Home Improvement Credit. This allowed homeowners who installed a heat pump to claim a credit on their owed taxes that equaled 30% of qualified expenses up to $2,000.
As of Dec. 31, 2025, this credit will no longer be available, but there are still a lot of reasons to upgrade to a heat pump even if you don’t qualify for the tax credit. GOBankingRates spoke with D.R. Richardson, CEO and co-founder of Elephant Energy, to discuss the benefits of installing a heat pump for heating and cooling your home.
More Comfortable Heating and Cooling
The number one reason to upgrade to a heat pump according to Richardson? A more comfortable heating and cooling experience. A traditional furnace will heat up the air in the room and then stop running, but the heat will then dissipate into the furniture and the walls. Then the furnace will kick on again to heat the air and the cycle continues.
When a heat pump heats your home, “the heat goes into the couches and the walls and the other pieces of furniture in your home at a much more even pace, which means that it stays that temperature,” Richardson said. This means that it takes a little longer to get your home to the right temperature, but it heats and cools the home evenly. “[It] provides a much more comfortable environment for your home,” he added.
Improved Air Quality
Traditional furnaces create heat by burning methane and converting it to heat. But not all of it converts to heat and it emits CO2 which can affect the indoor air quality in your home as well as the outdoor air quality.
Heat pumps don’t actually create heat, they move it. “You’re not burning anything. Instead, you’re moving heat around using electricity. This works even in very cold temperatures because there is still ambient heat in the air even if it feels very cold,” Richardson explained. “The reverse is true when it’s cooling-it pulls heat out of the home and directs it outdoors, cooling the interior.”
All of this means that the indoor air quality in your home will be better with a heat pump over a furnace.
Savings Even Without Incentives
Even without the tax credit incentive, purchasing and installing a heat pump can be more affordable than installing a furnace and an air conditioner. For homeowners who have been heating with expensive fossil fuels, for example “electric baseboard heating or delivered fuel oil or propane,” Richardson said you’ll notice the difference pretty quickly and he estimated that “customers are saving hundreds, if not thousands, off dollars per year, depending on the price of electricity in their market. If you’re coming from natural gas, you’ll be paying about the same to run your heat pump.”
State Rebates May Be Available
As part of the Inflation Reduction Act, the Home Efficient Rebates (HOMES or HER) and Home Electrification and Appliance Rebates (HEAR) programs allow states to reimburse homeowners directly when they purchase a heat pump. You can check your state’s eligibility requirements to see if your heat pump will qualify for a rebate and for how much.
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