The Pros and Cons of Heat Pump Tax Credit Incentives

Nick Orth , Sr. Manager, Residential Marketing

Federal incentives in the U.S. and Canada make new heat pump systems enticing for homeowners. Many dealers are committed to providing consumers with the right solution at the best price possible, especially since our industry has had so many price increases in recent years. Since consumers continue to struggle to afford to repair or replace their systems, why wouldn’t we offer a solution to help people save on upfront costs while helping to reduce heating costs?

Promoting incentives, when it’s not a promotion you’re offering, has risks, so many dealers simply walk away from talking about tax credits. The homeowner’s system broke down, and they need a new one. They’re going to buy something anyway, so why complicate things?

Two issues come up when discussing incentives with dealers:

1. “I don’t want to be on the hook for the tax credit if a consumer doesn’t qualify.”

What you’re really selling the consumer on is that the system match meets the incentive qualifications. The responsibility of whether they qualify or not is the responsibility of the consumer, not the contractor. It’s up to them to talk to a tax professional and/or legal advisor. Transparency is important – verbally tell them it’s their responsibility to check program qualifications and build it into the written quote when they accept your bid. You likely already have some legal support that can help protect you and your business, and it’s wise to consult your legal advisor.

2. “We don’t do heat pumps around here, so I’m just going to stay away from it.”

The market is shifting to heat pumps, so this is a sentiment of the past. Your business can either prepare for the future and get the training needed or begin to lose business to competitors. Heat pumps aren’t the products of 30 years ago. The technology and the ease of installation have improved substantially. You’ll need to brush up on best practices for installation and weigh in the charge (for example), but it’s important to tackle these things today.

Another misperception: consumers should replace their furnace with a heat pump, adding a heat pump to their furnace with a dual-fuel application. If you think heat pumps don’t produce enough heat, then keep the furnace as part of the system and let it handle the heating load when temperatures are extreme. In milder temperatures, the heat pump can handle the heating load more efficiently than a gas furnace.

If you’re not talking with customers about available incentives, you’re doing them a disservice. Few people wake up and think to themselves, “You know, it’s time for a new heating and cooling system…” and start to research what’s out there. Because it’s almost always unplanned, homeowners don’t face this type of purchase on a regular basis. It’s up to you to educate them, so do it in a transparent way, where your business is protected and prepared.

Views and opinions expressed by the author(s) are those of the employees and do not necessarily reflect the view of Allied Air Enterprises.