INDIANAPOLIS — The federal government is incentivizing heat pump purchases by offering tax credits through 2032. This is part of President Joe Biden’s Inflation Reduction Act.

Though historically used in the South due to warmer temperatures, heat pumps are becoming increasingly popular in the Midwest thanks to technological improvements.  

“The systems are able to extract more warm air out of, frankly, the cold winter air so it’s able to produce more heat on the inside,” Brian Schutt, Co-Founder of Refinery46 speaking on behalf of HomeSense Heating & Cooling, said. “But also, more neighborhoods are being developed with electric-only options.”

Heat pumps essentially take warm air from the outside and transfer the heat inside. In the summer, the heat pump does the reverse and releases the hot air outside.

Experts say these units are generally better for the environment than gas.

Where to find help with heating assistance

“Installing heat pumps now means we’re still going to have them in 10-20 years when we have a cleaner electricity grid, so we’re more prepared and ready for that day,” Rebecca Ciez, Assistant Professor of Mechanical Engineering and Environmental & Ecological Engineering at Purdue University, said.

Last year, researchers with the University of Michigan said heat pumps would need to be more affordable and improvements made to the electricity grid to entice people to buy heat pumps.

Companies installing the devices locally say customers report increases on their bills. 

“What we’ve seen is people that will have, let’s say, $200 electric bills in the summertime have that bumped up to $4 or $500 a month in the winter,” Schutt said.

The government is offering a tax credit for up to $2,000 for certain heat pumps installed in 2023 and beyond. People can also receive rebates for heat pump water heaters. AES Indiana is also offering money back. 

“Many of the manufacturers like Daikin offer rebates in the fall and the spring to help incentivize customers who are making a proactive decision,” Schutt said.

Experts do say heat pumps will take some getting used to because they don’t heat the home as fast. 

“It’s going to feel cooler and many times that electrical expense in the winter is going to go up pretty tremendously compared to what their traditional electric costs are in the winter. That’s a big surprise if you’ve been used to lower expenses during the summer and you’ve not been used to an all-electric heating source.”