Air-source heat pumps are shaking up the industry due to their efficiency and convenience. These systems are highly environmentally friendly, too, making them popular among homeowners who want greener alternatives. To help incentivize homeowners to make more eco-friendly choices, special rebates are available for air-source heat pumps, but what are they?

Since 2007, we at Monkey Wrench Plumbing, Heating, Air & Electric have seen an increase in homeowners asking about air-source heat pumps for their houses. We’ve worked with various heating, ventilation, and air conditioning (HVAC) systems, but air-source heat pumps are becoming increasingly more common. With rebates available, homeowners can take advantage of these incentives and have an air-source heat pump installed in their homes.

With an air-source heat pump system, homeowners in Los Angeles and the surrounding areas may qualify for the following rebates and tax credits.

  • Los Angeles Department of Water & Power (LADWP)
  • Federal tax credit

We will break down and explain each of these air-source heat pump rebates to see which ones you qualify for.

Let’s dive right in!

What Rebates Are Available in California for Air-Source Heat Pumps?

Rebates are available for air-source heat pumps thanks to their high energy efficiency. Instead of using oil or natural gas to produce heat, air-source heat pumps use electricity to draw in heat from the ambient air instead of creating heat.

Thanks to this design, air-source heat pumps use about 50% less energy to heat homes than standard electrical heating systems. To help boost greener alternatives for home fixtures, California and the federal government have various rebates available to help convince homeowners to switch to air-source heat pumps.

Homeowners must first replace their older HVAC system with an air-source heat pump for the following rebates. After that, each rebate has qualifications for homeowners interested in applying, such as the LADWP heat pump rebate.

Los Angeles Department of Water & Power Air-Source Heat Pump Rebates

Homeowners with houses serviced by the Los Angeles Department of Water and Power (LADWP) can qualify for a special rebate and save $100 per nominal ton on the air-source heat pump. These units range between one to over five tons, and the larger the capacity of the air-source heat pump, the more money a homeowner can save. The upfront cost of an air-source heat pump may be a downside to some, but there are other benefits to having one of these units installed.

Eligible air-source heat pumps must have a heating seasonal performance factor (HSPF) rating equal to or greater than 8.5 and a seasonal energy efficiency ratio rating (SEER) rating equal to or greater than 15.

To qualify for the LADWP Consumer Rebate Program, homeowners must meet the following criteria.

  • Must be a LADWP residential customer
  • An approved Building and Safety Permit
  • Proof of air-source heat pump purchase
  • Must be an AHRI-certified heat pump (ducted central air, HVAC)
  • Installation contract

All required documents must be submitted with the application after purchasing and having a professional install the air-source heat pump. All applications must be submitted online or bookmarked by mail within 12 months of the air-source heat pump purchase date.

Even if a homeowner doesn’t qualify for the LADWP rebate program, they may be eligible for a federal tax credit.

Federal Tax Credit for Air-Source Heat Pump

Qualifying homeowners can apply for a federal tax credit of up to $2,000 or 30% of the cost of an air-source heat pump installation, whichever is less. If required, there’s also an additional $600 bonus for electrical panel upgrades to help support heat pump installation.

The air-source heat pump is one of the many credits available through the 25C Energy Efficient Home Improvement Credit, including a tax credit for heat pump water heaters.

These credits are incentives from the federal government to encourage homeowners to switch to more energy-efficient, environmentally friendly fixtures. Here are the qualifying factors homeowners must meet to be eligible for the tax credit.

  • Must be an Energy Star-certified air-source heat pump
  • Rating greater than or equal to SEER2 16, EER2 12, and HSPF 9
  • Available on a primary residence
  • Not applicable to new construction

If your air-source heat pump installation meets the requirements, then come tax season, you can be eligible for the tax credit. But you will still need to apply.

How to Apply for Air-Source Heat Pump Federal Tax Credit?

Homeowners who meet the eligibility must submit Form 5695 for Residential Energy Credits to see if they qualify for the tax credit. The air-source heat pump tax credit application is only available during the tax season and must be submitted along with a tax return.

Since the application involves a tax form, working with a professional tax preparer is recommended to ensure there aren’t any issues with submitting the tax credit application. To help expedite the process, you may be required to submit any supporting documents, such as the proof of purchase and installation contract.

Is an Air-Source Heat Pump a Good Investment?

Updating a home’s natural gas heating and cooling systems can be a daunting thought when it’s time to consider what the cost can look like. Fortunately, rebates and tax credits are available to help convince homeowners to install a brand-new air-source heat pump system. Now that you know about these rebates and credits, you can confidently prepare an investment into air-source heat pumps, knowing special incentives are available.

At Monkey Wrench Plumbing, Heating, Air & Electric, we understand that not all homes are built the same. Yet, for over 15 years, we’ve helped homeowners decide on the right heating and cooling systems while presenting different options that meet their budget. Most homeowners in the Los Angeles area may not know about these rebates, so we inform them so they can take advantage of the special savings.

For more information on air-source heat pump installations, contact us using one of the buttons below or book an appointment directly through our online scheduler.

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If you’re interested in air-source heat pumps but unsure where to look, check out our five best heat pump brands to help narrow your search to a specific brand.

Still on the fence about installing an air-source heat pump? See how air-source heat pumps compare against natural gas furnaces to determine whether either system suits your home.

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