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Need a new water heater? You can get $1,200 in government incentives for this super-efficient model

These incentives may not be available indefinitely.

These incentives may not be available indefinitely.

Photo Credit: iStock

A new generation of smart water heaters is making saving on your monthly bills and building a cleaner future easier than ever.

Homeowners who install heat pump water heaters typically save $250 to $500 annually on energy costs compared to other models. Thanks to the Inflation Reduction Act, buyers can now claim a 30% tax credit (up to $2,000, though typically less since they are cheaper) for heat pump water heaters, plus the possibility of additional state and local rebates depending on your location and income.

However, these incentives may not be available indefinitely. President Donald Trump has consistently stated his intention to eliminate these subsidies as part of efforts to reduce federal spending, though this would require a congressional act. Taking advantage of the current incentives sooner rather than later could save you thousands of dollars.

Heat pump technology pulls heat from the atmosphere rather than creating it from scratch, making these units up to four times more efficient than standard electric water heaters. For homeowners looking to replace aging equipment, the math makes more sense now than ever. 

For instance, a family in North Carolina switching to a heat pump model from an electric resistance water heater could save over $5,100 over the unit's lifetime, and those replacing propane units in the Northeast might see nearly $6,900 in lifetime savings.

These savings don't require you to sacrifice comfort or performance. Heat pump water heaters benefit your wallet and the planet. Using less electricity reduces strain on the power grid and reduces the carbon footprint of daily activities like showering and washing dishes.

"But choosing the right water heater isn't just about upfront costs — it's about long-term performance and smart features that adapt to your home's needs. Cala is designed to do more, from synchronizing with home solar and variable electricity prices to preheating hot water when you need it most," according to Cala's website.

Cala is one company pushing the technology forward with smart heat pump water heaters launching in 2025. Its highly customizable systems help homeowners drastically decrease energy bills and environmental footprint. Cala's intelligent systems heat water exactly when needed, avoiding waste and maximizing efficiency.


💡Save thousands with a heat pump


A heat pump can save you thousands of dollars in heating and cooling costs — but first you have to find the right installer at the right price.

Use EnergySage's free tool today to find local options, compare prices, and see how much you can save.

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EnergySage | Heat Pumps

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Which of these factors would most effectively motivate you to buy a heat pump?

Lower energy bills 💰

Better temperature control 🌡️

Helping the planet 🌎

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