Virginia heat pump incentives: 2024 guide

Almost one-third of Virginia homes already rely on a heat pump for heating and cooling. Whether it's swapping out an old system for a new energy-efficient model that can crank through the coldest days of winter, or switching away from traditional heating for the first time, most homeowners in Virginia are eligible for at least a couple thousand dollars in free money toward the cost of a new heat pump.

Like all American taxpayers, residents of Virginia are eligible for all of the heat pump incentives available through the Inflation Reduction Act of 2022 (IRA). We've covered those benefits in detail here, but in summary:

• Any household can claim a $2,000 federal tax credit (or 30% of the price, whichever is less) against the cost to install an air-source heat pump that meets modest efficiency requirements. Since it’s a tax credit, rather than a direct rebate, you’re only eligible for as much free money as you’re on the hook to pay the IRS per year. You can claim the rebate with tax form 5695, the same one you'd use for solar panels.

• Income-dependent rebates of up to $8,000 might be available in early 2025, according to Virginia Energy. (The date of availability keeps sliding backwards.) If you’re counting on those rebates, you should wait until the programs are actually in place for two important reasons. First, they’re highly unlikely to apply retroactively to a system that you’ve installed before the program's start date. Second, relatively few households will be able to claim the rebate, even those that are eligible based on income.

According to the DSIRE database, a few utility companies around Virginia including TVA and Appalachian offer rebates to customers who install heat pumps. The savings can range from $50 up to $1,625, depending on the utility company, and sometimes the efficiency and size of the system. But most people should expect to qualify for a few hundred dollars in rebates—nothing major compared to the cost of a new HVAC system, but a nice incentive. Each utility has a different procedure for claiming their rebates, so follow the instructions on the relevant company's website.

When you sign up for the EnergySage Heat Pump Marketplace, you'll get an instant estimate of how much it might cost to install a heat pump in your home based on real-world quotes for similar homes from vetted installers. You can schedule consultations with seasoned pros. If you want some independent guidance, one of our Energy Advisors can help you through the process. We're already the country's largest marketplace for solar energy, and now we've brought that clean-energy experience to heat pump shopping. Learn more here.