Heat Pump Rebates | Find Out If You’re Eligible
A Closer Look at the Incentive Landscape in Illinois & Michigan
According to the United Nations, the Earth is already about 1.1°C warmer than it was in the late 1800s. In 2015, the Paris Agreement set a goal to limit global warming to well below 2 degrees Celcius and aim for a limit of 1.5 degrees C, compared to pre-industrial levels. In order to achieve this, we have to reduce Greenhouse gas emissions by 45% by 2030 to achieve sustainability and net-zero carbon levels by 2050.
Because of this, governments and higher bodies in many countries have realized that they need more robust strategies to achieve net-zero emissions.
Energy Efficient Retrofits are the Best Solution for Multifamily Buildings
According to the EPA, as of 2009, the United States had more than 28 million housing units in multifamily buildings, using a total of 1.6 quadrillion BTUs of energy.
The average household in a multifamily building spends about 61% of its energy-related expenditures on heating and cooling, which adds up to about $20 billion per year nationwide. The U.S. government has responded to this problem with the Inflation Reduction Act.
The Inflation Reduction Act
To mitigate this issue, the Government of the United States has taken a huge step by signing the ‘Inflation Reduction Act’ into law on August 16, 2022. The Act includes a total budget of $750 billion and over $360 billion directed towards climate initiatives.
Read more about the Inflation Reduction Act in our blog here.
What Rebates are Available For Heat Pumps?
The added rebates and federal tax credit benefits on Heat Pumps and their installation, help in offsetting the initial costs. You can bring down the initial cost of retrofitting your multifamily buildings by utilizing these rebates and reap the benefits of low energy bills for years to come. In the long run, you will enjoy an increased CAP rate and occupancy rate by tenants.
How Much Can You Save With Heat Pump Rebates?
There are several different rebate programs available for landlords and businesses owning multifamily residential buildings, depending upon their eligibility and other factors, as of 2022. The list keeps getting updated and new programs and states are expected to be added in the near future
Let’s discuss two important states and the current rebates available in Illinois and Michigan.
Illinois
With Illinois home to 12.6 million people, there are currently 1,593 building owners with 3,582 multifamily buildings built prior to 1990 - almost all of them in need of energy efficiency upgrades. Illinois has two main electric utility companies ComEd and Ameren, along with a handful of smaller providers. Both companies offer energy efficiency improvement incentives for electrically heated multifamily buildings. It is anticipated that these programs will extend to gas-powered buildings in the future to allow for fuel switching and greater carbon reductions.
ComEd
Operating mainly in Northern Illinois, Commonwealth Edison Company (ComEd), is the largest utility company in the state, and is the sole electric provider in Chicago (where about three-quarters of Illinois’ population resides) and much of Northern Illinois.
ComEd energy offers the following rebates:
$30 per ton for a through-the-wall or built-in self-contained PTAC or PTHP
$100 for programmable thermostats installed with the systems
ERV - $40 per 1,000 square feet
Up to an additional 30% off on installed price available to buildings in distressed communities
Ameren Illinois
Ameren distributes electricity and natural gas to most of central and southern Illinois (excluding the Chicago Metropolitan Area) and to the majority of northern and eastern Missouri. Their Headquarters are based in St. Louis, Missouri. They provide rebates and incentives to multifamily, single family and businesses.
Ameren offers the following rebates:
Public housing $7,500 per heat pump retrofit
Funding has been allocated for the year
Income qualified $7,500 per heat pump retrofit
Refer to the Ameren Map located in the Playbook folder
Market rate $5000
Funding has been allocated for the year
Michigan
With Michigan home to 10 million people, there are currently 1,189 building owners with 2,842 multifamily buildings built prior to 1990 with greater than 25 units each. Michigan’s residential and commercial buildings account for 19.8% of the state’s total energy-related direct carbon dioxide emissions.
Michigan has two main utility companies DTE and Consumers Energy, along with Indiana Michigan Power Company in the south and a handful of others operating in the north. DTE, Consumers Energy, and Indiana Michigan Power Company all offer energy efficiency improvement incentives for multifamily buildings that are electrically heated.
DTE
DTE is a Detroit-based utility that provides natural gas as well as electricity including Heat Pumps in their program last year. Their pilot program offers:
Income-Qualified Properties:
$3,500 per ton for air source heat pumps.
$100 for programmable thermostats installed with the systems.
Limited to $100,000 per property or $2,000 per apartment unit, whichever is greater, per year.
Apartments qualify if they participate in an affordable housing program (LIHTC, HUD, USDA, MSHDA), or they are located within the “Qualified Census Tract” or if 50% of the occupants meet the following are below 200% of the Federal Poverty Level, or below 80% of Area Median Income.
Market Rate Properties:
$50 per ton for air source heat pumps.
$25 for programmable thermostats installed with the systems.
$100,000 total incentives per property per year.
When using the Epocha system in the US, DTE can offer clients additional rebates for the built-in ERV option included in the AOI system. Incentives are determined on a per project basi.
Consumers Energy
Consumers Energy is an investor-owned utility that provides natural gas and electricity. In 2019, its multifamily program achieved 9,367 MWh in savings, while spending $4,436,781.
Consumers Energy offers the following rebates:
Air Source Heat Pump: $150 - $250
Ductless Mini-Split Heat Pump: $350
$50-$100 available for programmable thermostats installed with the system.
Indiana Michigan Power Company
Indiana Michigan Power Company is an electrical utility headquartered in Fort Wayne, Indiana. It provides electricity to Indiana and southern Michigan.
Indiana Michigan Power Company offers the following rebates:
Wi-Fi/Smart Thermostat: $50-$100
Air Source Heat Pump: $100 - $200/ton
Ductless Heat Pump/Mini Split: $80 - $285/ton
Packaged Terminal Heat Pump: $100-$250
With the Inflation Reduction Act in action, more States are going to launch rebates/incentive policies in order to support the government with their net zero carbon goal by 2050.
If you live in another state and are interested in learning about rebates and incentives in your region, click HERE.
CONTACT US to get started with Heat Pumps today!
