United States: heat pump subsidies to reduce emissions

US subsidies for heat pumps are stimulating the adoption of this technology in households, impacting demand and changing the dynamics of the energy market.

Share:

Pompe à chaleur sur une habitation

Subscribe for unlimited access to all energy sector news.

Over 150 multisector articles and analyses every week.

Your 1st year at 99 €*

then 199 €/year

*renews at 199€/year, cancel anytime before renewal.

As part of its strategy to reduce CO2 emissions, the United States is stepping up financial support for heat pumps.
The Inflation Reduction Act, passed in 2022, provides tax credits of $2,000 for the installation of these systems in homes.
These devices, which use electrical energy to transfer heat, offer an alternative to traditional heating and air-conditioning systems.
By reducing energy consumption, they aim to optimize energy efficiency in the home.

Impact on the U.S. Heat Pump Market

Federal incentives, coupled with local programs, are beginning to stimulate demand for heat pumps.
In 2023, applications for tax credits for these installations exceeded 267,000 for air-to-air models and 104,000 for thermodynamic water heaters.
This figure reflects a growing awareness of potential savings, and a diversification of energy solutions in the US residential market.
Middle- and low-income households in particular benefit from these grants, encouraging them to gradually replace their heating systems.
Some municipalities, like Washington, go even further, covering the full cost of installation for eligible households.
Non-eligible households are encouraged to opt for a gradual approach, replacing obsolete equipment with more modern, economical systems over time.
This dynamic helps to structure the market around energy solutions that are less dependent on fossil fuels.

Cost-effectiveness and Gradual Adoption

According to a study published in Joule, heat pumps are proven to be profitable for 59% of American households, even without financial support.
This economic perspective is a strong argument for their widespread adoption.
However, the main challenge remains informing and motivating consumers.
Although the trend shows growing adoption, it remains largely concentrated among consumers who are already sensitive to energy issues.
Local and federal organizations are stepping up initiatives to train installers in the new technologies.
The aim is to ensure a smooth transition and sufficient availability of skilled manpower to meet growing demand.
This development goes hand in hand with changes in the practices of construction companies, particularly in the southeastern United States, where the demand for air conditioning is driving the adoption of heat pumps.

Demand Regionalization and Market Diversification

The uptake of heat pumps varies considerably across the US.
In Massachusetts, for example, the equipment rate is still low (6%), while in states like South Carolina, it reaches 40%.
This disparity can be explained by economic and structural factors, such as electricity costs, the prevalence of gas infrastructures, and specific air-conditioning needs.
Homebuilders and heating system installers in these regions are targeted by government-funded training programs.
These programs aim to encourage the use of these fast-growing technologies, integrating heat pumps as a standard component in new residential construction projects.

The South Korean government compels ten petrochemical groups to cut up to 3.7 million tons of naphtha cracking per year, tying financial and tax support to swift and documented restructuring measures.
The U.S. Department of Energy has extended until November the emergency measures aimed at ensuring the stability of Puerto Rico’s power grid against overload risks and recurring outages.
Under threat of increased U.S. tariffs, New Delhi is accelerating its energy independence strategy to reduce reliance on imports, particularly Russian oil.
With a new $800 million investment agreement, Tsingshan expands the Manhize steel plant and generates an energy demand of more than 500 MW, forcing Zimbabwe to accelerate its electricity strategy.
U.S. electric storage capacity will surge 68% this year according to Cleanview, largely offsetting the slowdown in solar and wind projects under the Trump administration.
A nationwide blackout left Iraq without electricity for several hours, affecting almost the entire country due to record consumption linked to an extreme heatwave.
Washington launches antidumping procedures against three Asian countries. Margins up to 190% identified. Final decisions expected April 2026 with major supply chain impacts.
Revenues generated by oil and gas in Russia recorded a significant decrease in July, putting direct pressure on the country’s budget balance according to official figures.
U.S. electricity consumption reached unprecedented levels in the last week of July, driven by a heatwave and the growth of industrial activity.
The New York Power Authority targets nearly 7GW of capacity with a plan featuring 20 renewable projects and 156 storage initiatives, marking a new phase for public investment in the State.
French Guiana plans to achieve a fully decarbonised power mix by 2027, driven by the construction of a biomass plant and expansion of renewable energy on its territory.
The progress of national targets for renewable energy remains marginal, with only a 2% increase since COP28, threatening the achievement of the tripling of capacity by 2030 and impacting energy security.
A Department of Energy report states that US actions on greenhouse gases would have a limited global impact, while highlighting a gap between perceptions and the economic realities of global warming.
Investments in renewable energy across the Middle East and North Africa are expected to reach USD59.9 bn by 2030, fuelled by national strategies, the rise of solar, green hydrogen, and new regional industrial projects.
Global electricity demand is projected to grow steadily through 2026, driven by industrial expansion, data centres, electric mobility and air conditioning, with increasing contributions from renewables, natural gas and nuclear power.
Kenya registers a historic record in electricity consumption, driven by industrial growth and a strong contribution from geothermal and hydropower plants operated by Kenya Electricity Generating Company PLC.
Final energy consumption in the European industrial sector dropped by 5% in 2023, reaching a level not seen in three decades, with renewables taking a growing role in certain key segments.
Réseau de transport d’électricité is planning a long-term modernisation of its infrastructure. A national public debate will begin on September 4 to address implementation methods, challenges and conditions.
The Spanish Parliament has rejected a package of reforms aimed at preventing another major power outage, plunging the national energy sector into uncertainty and revealing the fragility of the government's majority.
The U.S. government has supported Argentina’s request for a temporary suspension of an order to hand over its stake in YPF, a 16.1 billion USD judgment aimed at satisfying creditors.

Log in to read this article

You'll also have access to a selection of our best content.

or

Go unlimited with our annual offer: €99 for the 1styear year, then € 199/year.