Program administrators must consider a layered framework of federal, state, and local policies and regulatory authorities that impact heat pump adoption and program success. Below, we highlight key policies and regulatory agencies that impact residential heat pump program administration.

Federal Policies

Inflation Reduction Act (IRA)

The IRA provides significant tax credits and incentives aimed specifically at energy-efficient home upgrades, including the installation of heat pumps. In addition to lowering upfront costs for consumers, the IRA includes provisions like the Climate Pollution Reduction Grants (CPRG), which support state and local governments in reducing greenhouse gas emissions through clean energy initiatives. Together, these programs encourage the widespread adoption of heat pump technology, advancing energy efficiency goals and promoting a lower-carbon future across residential sectors.

Learn More: Inflation Reduction Act Overview

State Policies

Fuel Switching Policies

These policies can either promote or hinder heat pump adoption by regulating the transition from fossil fuel-based heating systems to electric options. Supportive fuel-switching policies often offer incentives or rebates for switching to heat pumps, while restrictive policies may limit program funding or incentives, making adoption more challenging.

Learn More: State Fuel Switching Policies and Rules | Tableau Policy Dashboard

Integrated Resource Planning (IRP)

State-mandated IRPs require utilities to consider all available resources for meeting future energy demands, including energy efficiency and renewable energy technologies like heat pumps. This comprehensive planning helps integrate heat pump solutions into the broader energy landscape.

Learn More: Midwest Integrated Resource Planning Overview

Energy Efficiency Resource Standard (EERS)

EERS mandates that utilities achieve specific energy savings targets, often through programs promoting energy-efficient technologies, including heat pumps. This regulatory framework incentivizes utilities to actively promote heat pump installations as part of their energy efficiency strategies.

Learn More: Midwest Energy Efficiency Resource Standards

Building Energy Codes

State and local building codes may incorporate energy efficiency requirements that affect the installation of heat pumps, such as specifying efficiency ratings or installation practices. By setting these standards, state and local governments can promote the use of high-efficiency heat pump systems in new constructions and major renovations.

Learn More: Midwest Building Energy Codes

Technical Reference Manual (TRM)

State TRMs provide standardized methodologies for estimating energy savings from various technologies, including heat pumps. By defining deemed savings and performance metrics, these manuals help streamline program evaluation and ensure consistency in reporting energy savings.

Learn More: Midwest TRMs Overview

Local Policies

Electrification Ordinances

Some municipalities are adopting electrification ordinances to promote the use of electric heating systems, including heat pumps. These ordinances can provide incentives or requirements for new buildings to install electric heating options, directly supporting heat pump adoption.

Learn More: Electrification Policies

Decarbonization Plans

Local governments often set ambitious decarbonization plans aimed at reducing greenhouse gas emissions within their jurisdictions. Heat pumps are an integral part of achieving these targets, as they offer a more sustainable heating and cooling solution compared to traditional fossil fuel systems. By promoting heat pump technology, local policies can help accelerate the transition to a low-carbon future.

Learn More: Local Decarbonization Plans

Benchmarking Ordinances

Energy benchmarking ordinances are key tools for advancing sustainability in buildings. These policies require building owners to regularly report energy consumption, increasing transparency, raising awareness, and encouraging energy efficiency improvements. The goal is to lower overall energy use and reduce greenhouse gas emissions in commercial and residential buildings.

Learn More: State-by-State Guide to Benchmarking Ordinances

Regulation

Department of Energy (DOE)

Oversees energy efficiency standards and establishes minimum efficiency requirements for heat pumps, ensuring systems meet national standards for energy performance.

Learn More: Standards and Test Procedures

Environmental Protection Agency (EPA)

Regulates refrigerants and emissions under the Clean Air Act, impacting the types of refrigerants used in heat pumps and ensuring environmental safety through emissions standards.

Learn More: Overview of Refrigerants Transition

Internal Revenue Service (IRS)

Administers tax credits and incentives for energy-efficient home improvements, including heat pumps, through programs like those under the Inflation Reduction Act (IRA).

Learn More: Energy Efficient Home Improvement Credit

Federal Energy Regulatory Commission (FERC)

Oversees aspects of the energy market that indirectly affect heat pump programs, such as energy pricing and grid reliability, which can influence demand for energy-efficient technologies.

Learn More: About FERC

Public Utility Commissions (PUCs)

Regulate utility rates, energy efficiency programs, and fuel-switching policies that impact incentives and rebates for residential heat pump adoption.

Learn More: Regulatory Commissions

State Energy Offices (SEOs)

Implement state-level energy efficiency programs, oversee distribution of federal funds for efficiency upgrades, and support residential heat pump adoption through incentives and educational programs.

Learn More: List of State Energy Offices and Organizations