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Oct 20, 2024

The hottest home renovation could shave hundreds off your energy bills — and you can get paid $3,500 to make the upgrade

The Environmental Protection Agency estimates you can save $550 per year on water heating costs. Photo Credit: iStock There are an incredible number of ways to upgrade your home while benefiting the

The Environmental Protection Agency estimates you can save $550 per year on water heating costs.

Photo Credit: iStock

There are an incredible number of ways to upgrade your home while benefiting the environment, but one of the best could be in reach for more people than ever, thanks to handy federal rebates. Now is the best time to install a heat pump water heater and save hundreds on energy costs each year.

A heat pump water heater doesn't directly warm the water inside. Instead, it pumps heat from outdoors to warm the water. Doing it this way uses much less energy than directly generating the same amount of heat, so a heat pump water heater is even cheaper to run than an ordinary electric unit.

It can still get the water as hot as you need, but the Environmental Protection Agency estimates you can save $550 per year on water heating costs, which is why this is one of the hottest modern home upgrades. Plus, using less energy makes this appliance one of the best ways to reduce your impact on the environment.

This hack is more accessible than ever for one reason: government incentives. Not only do you save money on heating your water, but the Inflation Reduction Act allows you to get $1,750 off the installation cost of your eco-friendly water heater — plus another $1,750 in tax credits.

That's a $3,500 savings, which goes a long way to covering the installation costs. Add that to your lower energy bills, and a heat pump water heater will pay for itself, all while letting you upgrade to the most recent model.

For help finding the best deals and navigating government incentives, you can also check out Rewiring America.

Bill McKibben, a leading environmental journalist, is enthusiastic about the incredible savings the IRA brings to American households. "In essence, the IRA creates an $8,000 bank account for every American household … if people figure out how to access it and use it," he said during a press briefing.

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