Heating and Cooling Solutions

Inflation Reduction Act (IRA)

Summary of Relevance to Efficient Heat Pumps

Signed into law in August 2022, the multibillion Inflation Reduction Act is the single largest investment in climate and energy in American history. The IRA was designed to carry out more high-efficient, electric appliances in homes and commercial buildings resulting in lower energy costs and overall reduction in carbon footprint. In this article we will outline the available tax credits and rebate programs, who they benefit, what building structures are eligible, and how to get your cost savings.

Download a Samsung HVAC IRA 25C qualified product list* *Samsung HVAC will continue to monitor and update this list.

IRA Overview


Who BenefitsWhat is EligibleHow MuchHow To GetWhen
High-Efficiency Electric Home Rebate ProgramResidents and building owners with income less than 150% of Area Median IncomeCertain ENERGY STAR® Electric Appliances Weatherization of homes Electric panel upgrades50% of project cost for medium income households and 100% of project for low income households up to $14,000 total with Sub caps – for heat pumps the max is $8,000Rebates via State Energy Offices and Tribes  DOE will administer the program and distribute money to State Energy Offices and TribesAfter DOE guidance and State plans  Until 9/30/2031
Home Energy Performance-Based Whole-House (HOME) RebatesHomeowners and landlords, all income levels (or aggregators)Whole-home retrofit projects that reduce energy use at least 15%Two Paths – Modelled and Measured Savings $2,000 for min. 20% and $4,000 for 35% modeled savings. Amount doubles for low & mod. Income OR  Measured Approach payment is prorated per $/KwH based on $2,000 for 20% savings at least 15% savings required  Limit of 50% of project cost. Rebate doubles for low or mod. Income and limit increases to 80%State Energy Offices must apply to DOE and develop the program and implement it  Currently we do not have details of the implementation of the rebate programAfter DOE guidance and state plans  For retrofits completed by 10/1/2031
Energy Efficient Home Improvement Credit (25C)Homeowners for their principal residenceEfficient equipment and components, energy audits30% of cost up to $2,000 for heat pumps meeting highest CEE TierVia tax returnFrom 2023 till 2032 Lower amounts for 2022
Energy Efficient Commercial Building Deduction (179D)Owners of commercial and large multifamily buildings. Nonprofits and government owners can transfer deductionRetrofit projects that reduce building energy use at least 25%$0.50–5 per sq. ft. of floor area based on energy savings and labor standardsVia tax returnFrom 2023 till 2032 Under current rules for 2022
  • High-Efficiency Electric Home Rebate Program

    This $4.5 billion DOE program will be administered by state energy offices to provide rebates to low and moderate-income households to install ENERGY STAR® heat pumps and certain other electric equipment that does not replace the same kind of equipment. It cannot be used to replace an existing heat pump, but it can be used for new homes. The program includes apartments and single-family homes. It also includes insulation and air sealing and upgrading electric service and wires. There is an income eligibility cap of 150% of Area Median Income.

    • - Rebates amount is up to 50% of the cost for households with income of 80–150% of Area Median Income and up to 100% of cost for those under 80% of Area Median Income.
    • - There are maximum incentives for each type of equipment as well as a $14,000 per household cap. the max for heat pumps is $8,000.
    • - Contractor rebate eligibility up to $500.
    • - Must replace a non-electric appliance or new construction or first-time purchase of that appliance.
    • - Qualifying Heat Pumps must be ENERGY START V6.1 certified
    See Area Median Income in your area
  • Home Energy Performance-Based Whole-House (HOMES) Rebates

    This is a $4.3B DOE program that will be implemented by State energy offices to provide rebates for whole home retrofit packages based on the reduction in home energy use. The program is available for all income levels and includes apartments.

    There are two approaches to avail this rebate: modeled savings and measured savings.

    • Modeled Savings

      - For “modeled” savings a contractor will do an energy assessment of the home, design a retrofit package, and model the savings.

      - For single family homes, rebate amounts are $2,000 for 20% energy savings and $4,000 for 35% energy savings, but these are doubled for low- and medium-income households below 80% of Area Median Income.

    • Measured Savings

      - For the “measured” savings approach the incentive will be prorated per kilowatt-hour saved with measurement of actual savings when at least 15% savings is achieved.

      - There is a limit of up to 50% of project cost.

      - For households with income less than 80% of area median income, the rebate amounts doubles and limit increases to 80% of project cost.

      - Contractor performing the job can get a $200 rebate for each home located in underserved community.

  • Energy Efficient Home Improvement Credit (25C)

    This is a long-standing federal tax credit for home energy improvements that is expanded and extended in IRA. It is a tax credit for improvements such as insulation, windows, heating and cooling systems, and electric breaker box upgrades. Starting in 2023, IRA increases the credit to 30% of cost, with an annual cap of $1,200 for certain smaller appliances but it allows up to $2,000 for a heat pump.

    • - In 2022 the credit is under the old rules, with lower amounts and a lifetime cap of $500.
    • - Qualifying product must meet CEE highest tier excluding any advanced tier.
    • - The credit is taken on tax returns and is only available to homeowners (for their principal residence).
  • Energy Efficient Commercial Building Deduction (179D)

    This is a long-standing federal tax provision that IRA made more generous. IRA provides tax deductions of $0.50–5.00 per square foot of floor area to owners of new and improved energy-saving commercial buildings depending on the percentage of energy savings and whether the contractor pays prevailing wages.

    • - Energy projects that reduce energy use by a minimum of 25% are eligible.
    • - For nonprofits and federal buildings, the deduction may be transferred to the project company or responsible party.
    • - Unlike a tax credit which reduces the tax owed. This is a deduction which reduces the taxable income.
    • - Deduction amount of $0.5 per sq. ft. for 25% energy reduction, increases by 0.02 per sq. ft. for every percentage above 25% reduction up to a max. $1 per sq. ft.
    • - If the contractor meets the prevailing wage and apprentice requirement the amount increases to $2.5 per sq. ft. for 25% energy reduction and increases by $0.1 per % reduction over 25% up to a max of $5 per sq. ft.

FAQ

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  • Emerging Technology Award

    This award is given to appliances that have been recognized as groundbreaking innovations by offering new ways to save energy.

  • Most Efficient Distinction

    The EPA bestows the Most Efficient Distinction to products that meet criteria even more stringent than ENERGY STAR certified.

  • Corporate Commitment Award

    Samsung was the only company in nine years to receive this rare award for our wide-scale commitment to sustainability.

Introducing our EPA-recognized, energy-efficient solutions

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