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

Comprehensive energy news coverage, updated nonstop

Annual subscription

8.25$/month*

*billed annually at 99$/year for the first year then 149,00$/year ​

Unlimited access • Archives included • Professional invoice

OTHER ACCESS OPTIONS

Monthly subscription

Unlimited access • Archives included

5.2$/month*
then 14.90$ per month thereafter

FREE ACCOUNT

3 articles offered per month

FREE

*Prices are excluding VAT, which may vary depending on your location or professional status

Since 2021: 35,000 articles • 150+ analyses per week

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.

Several scenarios are under review to regain control of CEZ, a key electricity provider in Czechia, through a transaction estimated at over CZK200bn ($9.6bn), according to the Minister of Industry.
The government has postponed the release of the new Multiannual Energy Programme to early 2026, delayed by political tensions over the balance between nuclear and renewables.
Indonesia plans $31bn in investments by 2030 to decarbonise captive power, but remains constrained by coal dependence and uncertainty over international financing.
A drone attack on the Al-Muqrin station paralysed part of Sudan's electricity network, affecting several states and killing two rescuers during a second strike on the burning site.
The Bolivian government eliminates subsidies on petrol and diesel, ending a system in place for twenty years amid budgetary pressure and dwindling foreign currency reserves.
Poland’s financial watchdog has launched legal proceedings over suspicious transactions involving Energa shares, carried out just before Orlen revealed plans to acquire full ownership.
The Paris Council awards a €15bn, 25-year contract to Dalkia, a subsidiary of EDF, to operate the capital’s heating network, replacing long-time operator Engie amid political tensions ahead of municipal elections.
Norway’s energy regulator plans a rule change mandating grid operators to prepare for simultaneous sabotage scenarios, with an annual cost increase estimated between NOK100 and NOK300 per household.
The State of São Paulo has requested the termination of Enel Distribuição São Paulo’s concession, escalating tensions between local authorities and the federal regulator amid major political and energy concerns three years before the contractual expiry.
Mauritania secures Saudi financing to build a key section of the “Hope Line” as part of its national plan to expand electricity transmission infrastructure inland.
RESourceEU introduces direct European Union intervention on critical raw materials via stockpiling, joint purchasing and export restrictions to reduce external dependency and secure strategic industrial chains.
The third National Low-Carbon Strategy enters its final consultation phase before its 2026 adoption, defining France’s emissions reduction trajectory through 2050 with sector-specific and industrial targets.
Germany will allow a minimum 1.4% increase in grid operator revenues from 2029, while tightening efficiency requirements in a compromise designed to unlock investment without significantly increasing consumer tariffs.
Facing a structural electricity surplus, the government commits to releasing a new Multiannual Energy Programme by Christmas, as aligning supply, demand and investments becomes a key industrial and budgetary issue.
A key scientific report by the United Nations Environment Programme failed to gain state approval due to deep divisions over fossil fuels and other sensitive issues.
RTE warns of France’s delay in electrifying energy uses, a key step to limiting fossil fuel imports and supporting its reindustrialisation strategy.
India’s central authority has cancelled 6.3 GW of grid connections for renewable projects since 2022, marking a tightening of regulations and a shift in responsibility back to developers.
The Brazilian government has been instructed to define within two months a plan for the gradual reduction of fossil fuels, supported by a national energy transition fund financed by oil revenues.
The German government may miss the January 2026 deadline to transpose the RED III directive, creating uncertainty over biofuel mandates and disrupting markets.
Italy allocated 82% of the proposed solar and wind capacities in the Fer-X auction, totalling 8.6GW, with competitive purchase prices and a strong concentration of projects in the southern part of the country.

All the latest energy news, all the time

Annual subscription

8.25$/month*

*billed annually at 99$/year for the first year then 149,00$/year ​

Unlimited access - Archives included - Pro invoice

Monthly subscription

Unlimited access • Archives included

5.2$/month*
then 14.90$ per month thereafter

*Prices shown are exclusive of VAT, which may vary according to your location or professional status.

Since 2021: 30,000 articles - +150 analyses/week.