The IRA and Home Heating | AEC
The Issues

What the Inflation Reduction Act Means to Heating Fuel Providers

The Inflation Reduction Act (IRA) of 2022 includes $369 billion in energy and climate policies. The White House touted the plan’s goal to “reduce greenhouse gas emissions by about 1 gigaton in 2030, or a billion metric tons – 10 times more climate impact than any other single piece of legislation ever enacted.”1

It also includes large incentives for property owners to switch to electric heating:

  • $4.275 billion for electrification rebates for single family and multi-family buildings
  • Point-of-sale rebates of up to $8,000 for Energy Star® certified heat pumps, $1,750 for a heat pump water heater, $840 for an electric appliances such as a stove, rang, oven or heat pump clothes dryer.
  • Whole-home rebates up to $4,000 for efficiency improvements resulting in 15% energy savings.

They didn’t exclude the liquid heating market completely. Heat pump installations get $8,000. A new Bioheat® fuel compatible boiler or furnace can earn a $600 tax credit. The IRA also includes $500 million over 10 years for the Department of Agriculture’s Higher Blends Infrastructure Incentive Program (HBIIP) to support biofuel production, storage, and distribution.2

Congress and the White House included heating systems that can run on “renewable fuel blends,” acknowledging our contribution to the countries carbon reduction goals. With equipment lifespans of 20-30 years, installing new systems now can protect your business for decades. By then, B100 heating fuel will be the norm, and we will be providing a truly net-zero fuel.

You can learn more about the IRA here.

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