Source: United States Senator Amy Klobuchar (D-Minn)
The Heating Efficiency and Affordability through Tax Relief (HEATR) Act creates a manufacturer tax credit to incentivize production of high-efficiency, safe, and affordable heat pumps
WASHINGTON – U.S. Senator Amy Klobuchar (D-MN) led her colleagues in introducing legislation to expand access to clean, affordable heating and lower energy costs for consumers. The Heating Efficiency and Affordability through Tax Relief (HEATR) Act would create a manufacturer tax credit to incentivize production of high-efficiency, safe, and affordable heat pumps.
In addition to Klobuchar, the legislation is also sponsored by Senators Tina Smith (D-MN), John Hickenlooper (D-CO), Sheldon Whitehouse (D-RI), Patrick Leahy (D-VT), Jeff Merkley (D-OR), and Cory Booker (D-NJ).
“Far too many households across our state struggle to afford their heating costs. Families should not have to choose between paying for heat and other essential necessities,” said Klobuchar. “This legislation is a win-win – reducing energy costs for consumers, while strengthening access to clean, energy-efficient heating solutions. As we continue transitioning to a clean energy economy, increasing production of heat pumps will be critical to lowering emissions and helping families across our state get the affordable heating they need.”
“The transition to clean energy is happening, the question is whether our country leads or follows. I want us to lead,” said Smith. “If we do nothing, climate change will be an economic, environmental and public health disaster. The good news is that taking action on climate also presents an enormous economic opportunity. This legislation will incentivize manufacturers to produce more heat pumps, and provides important extra incentives for heat pumps that work in cold climates. By installing more heat pumps and running them off of American-made clean electricity we will increase our energy independence, lower energy costs for families, reduce pollution, and protect the planet.”
“To cut emissions, we need to green home heating. To squeeze Putin, we need Europeans to stop using Russian natural gas. By spurring U.S. heat pump manufacturing we can lower emissions, cut European dependence on Russia, and create jobs at home,” said Hickenlooper.
“Heat and hot water make up the majority of the energy a household uses,” said Whitehouse. “Heat pumps can significantly lower families’ energy bills while reducing America’s dependence on the volatile international oil market and tackling a major source of carbon pollution. I’m glad to join Senator Klobuchar in introducing legislation that would boost manufacturing to get more heat pumps into homes.”
“With oil and natural gas prices skyrocketing this winter, Vermonters were hit hard by high heating costs,” said Leahy. “This bill will not only help provide affordable heating solutions but will help us reduce greenhouse gas emissions and our reliance on fossil fuels.”
“With fossil fuels driving devastating storms, fires, and droughts and pouring money into our enemies’ pockets, it is crucial to our economy, national security, and environment that we move as rapidly as possible to clean and renewable energy,” said Merkley. “The HEATR bill will help transition traditional, expensive heating systems that use oil and fossil gas into more efficient, cost-saving, climate-friendly heat pumps. Transitioning to clean heat pumps isn’t just good for our future, it’s good for our present. American families would pay significantly less on heating and cooling—especially for rural communities and older homes. This bill is a win-win for everyone, and I look forward to working with my colleagues to move it forward.”
“Expanding access to more zero-emission, energy efficient appliances such as heat pumps will help consumers save money and reduce carbon emissions,” said Booker. “I’m proud to support this bill that provides tax credits to domestic manufacturers building heat pumps and spurs local job creation. This important legislation will also make it more affordable for consumers to upgrade their home heating and cooling systems with cleaner, more affordable technology.”
Specifically, the HEATR Act will:
- Expand access to clean, affordable heating solutions. Making it easier for landlords to purchase more efficient technology will allow more renters to benefit from the tax credit.
- Transition the space and water heating market to provide clean, affordable, safe heat and hot water at no extra consumer cost.
- Spur domestic job creation by requiring equipment to be manufactured in the U.S.
- Make more efficient use of taxpayer dollars by targeting the tax credit to where it will have the biggest impact.
Because heat pumps transfer rather than generate energy, they represent an energy-efficient, affordable alternative to traditional heating and cooling systems. Heat pumps operate on average at 2-4 times the efficiency of a regular furnace or boiler, while reducing electricity usage by approximately 50% over traditional electric heating, according to the Department of Energy. According to HomeAdvisor, the average annual cost of heat pumps range between $260-$850 per year, drastically less than the annual costs for furnaces or other traditional heating systems. Further, given heat pumps operate solely on electricity, they are significantly more emissions-friendly compared to existing heating systems that depend on propane, fuel oil, or natural gas for energy.
The legislation has been endorsed by the Minnesota Rural Electric Association, Sierra Club, American Federation of Labor & Congress of Industrial Organizations (AFL-CIO), American Council for an Energy-Efficient Economy (ACEEE), Natural Resources Defense Council (NRDC), Rocky Mountain Institute (RMI), Collaborative Labeling and Appliance Standards Program (CLASP), Center for Energy and Environment (CEE), National Association of State Energy Officials (NASEO), Carbon Switch, Earthjustice, and Rewiring America.
“Many of Minnesota’s cooperatives have strong programs to assist their members in transitioning to energy efficient heat pump solutions. We applaud Senator Klobuchar’s efforts to work with manufacturers to improve the availability of these technologies,” said Darrick Moe, President and CEO of Minnesota Rural Electric Association.
“Air source heat pumps and heat pump water heaters offer critical opportunities to both increase the energy efficiency of our building stock and decarbonize our economy. Now is the time to accelerate adoption of these technologies, and this manufacturer tax credit will be a key driver to help the supply chain prioritize and promote them,” said Center for Energy and Environment President Chris Duffrin.
“The HEATR Act will help to make efficient heat pump technology for space and water heating accessible to all. Heat pumps are two to five times more efficient than their fossil fuel counterparts and are a key component to getting our buildings off of polluting fossil fuels and fighting the climate crisis. By incentivizing manufacturers to produce more heat pumps at a lower cost, we can make this critical technology more affordable, leading to cleaner, climate-friendly buildings. The recent IPCC report says that we are in a ‘make or break’ moment for climate action. With our nation’s buildings responsible for around 40 percent of all carbon emissions, we simply must make our buildings more efficient while using energy from clean, renewable sources if we hope to reach our climate goals. Congress should pass this bill,” said the National Resources Defense Council (NRDC).
“Cold climate heat pump technology has drastically improved in the last decade, so much so that they can now meet the heating and cooling needs anywhere– even the coldest climate states like Minnesota,” said Alisa Petersen, Federal Policy Manager at RMI. “Providing financial incentives to increase heat pump manufacturing will help make homes healthier for American families, help us reach our climate goals, and boost our economic and energy security.”
“The HEATR Act implements the recommendations of CLASP’s 3H Hybrid Heat Homes proposal by incentivizing manufacturers to transition from one-way air conditioners to reversible heat pumps. Around half of US homes have a central air conditioner—what if that equipment could also provide heating? CLASP has found that making this one change in US homes can reduce their fossil fuel consumption by almost 40%, while strengthening energy independence and reducing utility bills and carbon dioxide emissions,” said CLASP Director Matt Malinowski.
“The HEATR Act announced today by Senator Klobuchar is a great example of energy policy that can deliver both emissions reductions and huge benefits for American families. Installing a heat pump can save the average household in America hundreds of dollars per year. But for many families the upfront cost is too high. This bill has the opportunity to change that by making this technology more affordable and accessible,” said Carbon Switch.
“As households face high energy prices, we must urgently consider innovative solutions that reduce costs for American families,” said Earthjustice Associate Legislative Representative Jake Kornack. “With this bill, families can replace oil and gas furnaces with highly efficient heat pumps that can cool and heat homes at a fraction of the cost while building a more sustainable future for all of us. We thank Senator Klobuchar for her leadership to address energy costs, bolster sustainability, and assist families who stand to be most impacted.“
“We have an electric imperative: We need to incentivize the domestic manufacturing of critical clean tech like heat pumps in order to guarantee our energy security, save Americans money, have healthier homes, and build a beautiful, resilient future. Electrification policy is win-win-win policy,” said Rewiring America CEO Ari Matusiak.
Klobuchar has worked to lower energy costs and strengthen access to affordable heating solutions for communities across Minnesota. In November, she successfully pushed the Biden administration to provide relief funding through the Low-Income Home Energy Assistance Program (LIHEAP) to help low-income families afford heating costs. In 2015, her bipartisan Water Heater Efficiency Act was signed into law. This bill, which she led with Senator John Hoeven (R-ND), enables rural electric power cooperatives and their members to continue using large, energy-efficient water heaters in “demand response” conservation programs, decreasing energy costs for consumers.
She has also led efforts to boost energy efficiency. Her bipartisan legislation with Hoeven to assist non-profit organizations with saving money on making energy efficiency upgrades was signed into law as part of the Infrastructure Investment and Jobs Act last November.
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