What is HEEHRA?

HEEHRA is the High-Efficiency Electric Home Rebate Act passed as part of the 2022 Inflation Reduction Act by the U.S. Congress.

HEEHRA provides federal funding to state-run programs to offer up to $14,000 in rebates to low- and moderate-income homes for replacing a gas furnace and gas appliances with electric appliances.

• Up to an $8,000 instant rebate for replacing a gas furnace with an electric heat pump
• Up to a $1,750 instant rebate to replace a gas water heater with a high-efficiency heat pump water heater.
• Up to an $840 instant rebate to replace a gas dryer with a high-efficiency condensing electric dryer.
• Up to an $840 instant rebate to replace a gas stove with an electric range.

In addition to instant rebates for replacing the gas appliances with electric versions, low- and moderate-income households are eligible for instant rebates up to $4,000 for breaker box revisions and $2,500 for wiring upgrades to accommodate the new electric appliances.

Electrification project rebates are limited to $14,000 per household.

HEEHRA also provides up to $1,600 in weatherization rebates to improve windows, insulation and air seals in your home.

Who Qualifies for HEEHRA rebates?

Low-income households are eligible to receive 100% rebates for the costs of qualified electrification projects. Installation costs are included in the rebates. Moderate-income households can get 50% rebates for the costs of qualified electrification projects (including installation).

Low-Income Qualifications

To qualify as a low-income household, annual earnings must be less that 80% of the area’s median income level. Earning a comfortable living won’t necessarily disqualify you for this income classification.

For example, a household in the Denver, Colorado area (where median income is $117,800) could earn up to $94,240 to qualify for the 100% HEEHRA rebates as a low-income family.

You can look up your area’s median income on the Fannie Mai Area Median Income Lookup Tool to find out if you qualify for the 100% HEEHRA electrification project rebates.

Moderate-Income Qualifications

Households earning between 80% and 150% of their area’s median income qualify for 50% HEEHRA electrification project rebates.

Even though the percentage of rebates for moderate-income households decrease, the maximum amount of rebates for an electrification project stays the same. Moderate-income families can still get up to $14,000 in rebates, although their out-of-pocket expenses for electrification projects will typically be higher than that of low-income households.

A family in the Denver area earning between $94,240 and $176,700 would qualify for 50% HEEHRA electrification project rebates.

When will Rebates be Available?

Implementation of HEEHRA rebates is still underway. The U.S. Department of Energy currently predicts that rebates will be available for most qualifying households by late 2023 or early 2024.

Individual states will administer the rebates according to the guidelines set by the federal government.

Check back for updates as the details of this rebate program continue to unfold.

Frequently Asked Questions about the HEEHRA Electrification Project Rebates

Why Aren’t the Rebates Available Now?

Although Congress appropriated the funds for HEEHRA electrification project rebates to be available on January 1, 2023, the U.S. Department of Energy is still in the process of setting guidelines for states to administer the rebates. Once the Department of Energy makes funds available to the states, the state entities will then be responsible for setting up and administering the programs that make the rebates accessible to households.

According to the Department of Energy, the administration process for making the HEEHRA rebates is projected to be completed by late 2023 or early 2024.

Will HEEHRA rebates be retroactive?

No. According to the Department of Energy, HEEHRA rebates won’t be retroactive. You’ll need to wait until they’re officially available to get rebates for qualifying electrification projects.

What should I do if my gas furnace is old and needs repair?

If you qualify for HEEHRA rebates, getting your furnace repaired and keeping it until the HEEHRA heat pump rebates become available would be your best option in this situation. Schedule in-home repair service through Sears and have a service technician diagnose and repair the furnace failure.

Once the HEEHRA heat pump rebates become available, take advantage of these incentives to replace your old furnace with a new heat pump.

What is a Heat Pump?

A heat pump works exactly like an air conditioner to cool your home in the summer. During winter, the heat pump reverses refrigerant flow. It uses hot refrigerant to heat your home. A heat pump also has an electric heating element that add heat to your home as needed when hot refrigerant can’t keep up with your home’s heat loss.

A heat pump efficiently uses electricity and refrigerant to heat and cool your home.

What is a Heat Pump Water Heater?

A heat pump water heater runs a compressor at the top of the tank to heat refrigerant. It uses the hot refrigerant as the primary heat source for heating water inside the water heater tank. The refrigerant flows down through heat exchanger tubes inside the water heater tank and heats the water. The refrigerant then flows through an evaporator heat exchanger on top of the water heater to cool the refrigerant down.

Next, the refrigerant flows back to the compressor and the heating cycle repeats.

When hot water demand exceeds the refrigerant systems ability to heat water, standard electric water heating elements turn on to heat water in the tank.

What is a Condensing Heat Pump Clothes Dryer?

A condensing heat pump dryer runs a compressor to heat refrigerant. It uses hot refrigerant gas to heat the clothes and cooler refrigerant to dehumidify the air that flows through the clothes during the drying cycle. Many heat pump dryers are ventless. Here’s how the drying cycle works.

• The compressor compresses refrigerant which heats up the fluid.
• The heated refrigerant fluid flows from the compressor through the condenser heat exchanger.
• A fan blows air through the condenser heat exchanger and into the dryer drum to heat the clothes and cool down the refrigerant. (A small electric heating element also helps heat the air as needed.)
• Warm moist air flows out of the drum and through the evaporator fins.
• Refrigerant flows from the condenser heat exchanger to the evaporator heat exchanger tubes. The refrigerant inside the evaporator dehumidifies the moist exhaust air blowing over the evaporator fins.
• Moisture removed from the clothes drips down from the evaporator fins into a drain sump. When the drain sump gets full, a drain pump sends the water to the washer drain.
• Refrigerant returns to the compressor and air goes back through the condenser heat exchanger to repeat the drying cycle.

The drying cycle in a heat pump dryer takes longer but uses much less energy than a conventional dryer because the heat efficiently generated by the compressor is used twice—first to heat the clothes and then to dehumidify them.

Keep the upcoming HEEHRA rebates in mind when you’re facing repair or replacement of a gas furnace or gas appliances in your home. Taking advantage of these generous rebates could be a huge financial win for your family.