How Are Government Grants And/Or Rebates Impacting The HVAC Market?

Consumer incentive and rebate programs can lower the cost of high-efficiency heating, cooling, and water heating products, enabling consumers to lower their utility bills without sacrificing comfort and affordability. Home Energy Rebates and a Federal Energy Efficient Home Improvement Credit are significant, new investments in strengthening the value proposition that comes from consumers making equipment decision based on the long-term utility bill savings and environmental benefits. For example, the American Council for an Energy Efficient Economy (ACEEE) estimates that the Energy Efficient Home Improvement Credit cuts consumer energy costs by approximately $130 a year. As a federal tax credit, qualified homeowners also reduce federal tax owed. For more moderate-income homeowners and families who rent, the Home Energy Rebates are an attractive option to substantially reduce the upfront costs of heat pump water heaters and heat pumps, popular choices in both the new construction and add on and replacement markets.

It's a mixed bag. Utility rebate programs continue to play a meaningful role in shaping the HVAC market wherever they are available, often helping to boost consumer awareness and adoption of all-electric, all-climate heat pumps. The Inflation Reduction Act (IRA) also created significant potential for all-climate heat pump adoption. The IRA’s impact on the broader HVAC market has been most clearly seen through the 25C tax credits, though the credits are sunsetting at the end of 2025. Other aspects of the legislation have seen varying implementation across states, making it challenging to quantify broader market effects at this stage. That said, the overall trend toward all-climate heat pump adoption remains strong, fueled by consumer interest in more energy-efficient systems that offer advanced features, the potential for lower utility costs, and enhanced comfort.

At Samsung, government grants and rebates play a key role in making energy-efficient upgrades more accessible by reducing the upfront cost of installing heat pump systems. Homeowners can combine incentives from local utilities, federal tax credits, and manufacturer promotions – often saving thousands of dollars on a new installation. Beyond the initial savings, energy-efficient equipment leads to lower utility bills and improved home comfort. Additionally, states are beginning to roll out Inflation Reduction Act (IRA) programs, which can provide up to $8,000 for qualifying heat pump systems. In some cases, when incentives are stacked, rebates can exceed $10,000 – depending on the state’s requirements. Contractors benefit too, as these programs make it easier to sell higher-value projects, increasing revenue without having to move more units. As we like to say: How would you like to grow your business by 10%, without selling a single additional box? As these rebate programs expand, contractors have an opportunity to grow their business by focusing on higher-value projects supported by available incentives.

Programs like Section 25C and 25D have offered homeowners up to $2,000 in credits for high-efficiency heat pumps and other upgrades, while Sections 45L and 179D have supported energy-efficient residential and commercial construction. As these incentives approach their scheduled sunset — beginning at the end of 2025 and continuing through mid-2026 — the HVAC industry has a unique opportunity to help customers maximize the remaining benefits of energy-efficient upgrades. Carrier encourages contractors to educate their teams and customers, promote qualifying products with urgency messaging and prepare for increased demand. With continued support through marketing tools, training and legislative updates, the industry is well-positioned to navigate this transition and maintain momentum toward a more energy-efficient future.

Rebates have moved from “nice to have” to foundational. They’re effectively driving product design and sales strategy – but with thousands of programs across North America, each with different requirements, frequent updates, and unpredictable funding cycles, they also introduce complexity that often limits their real-world impact. The risk of losing unifying standards like ENERGY STAR® only adds to the uncertainty.

That’s why the true influence of rebates today depends on how usable they are. Programs that reward performance – especially for inverter-driven variable capacity systems – are gaining ground. But if contractors can’t easily determine what qualifies or how to claim it, the opportunity gets lost.

As the policy landscape evolves, the challenge isn’t just awareness – it’s execution. Whether through better-aligned program criteria, streamlined claim processes, or clearer communication, our industry needs to treat rebates as infrastructure. Simplifying the experience is key to scaling adoption, not just checking compliance boxes.

Electronically Commutated (EC) fans are influencing the landscape of government grants and rebates across North America due to high energy efficiency and performance compared to traditional fan technologies such as AC motors. EC fans use brushless DC motors and integrated electronics to optimize airflow while minimizing power consumption. As a result, they align closely with government goals to reduce greenhouse gas emissions and promote energy conservation. EC fans can play a significant role in achieving climate targets, agencies like the U.S. Department of Energy (DOE) and Natural Resources Canada have increasingly included EC fans in their eligibility criteria for incentive programs aimed at upgrading HVAC and refrigeration systems in residential, commercial, and industrial sectors.

Increasing grants and rebate availability for EC fan retrofits in existing systems could have a significant sustainability impact. EC fans not only lower electricity consumption but also reduce operational costs and carbon footprints over time. By expanding rebates dedicated exclusively to EC fan upgrades - rather than bundling them with HVAC systems - governments and utilities could encourage more building owners to take immediate and cost-effective steps toward energy conservation. This focused approach would help scale retrofits quickly, making a measurable difference in reducing emissions across aging HVAC infrastructure