Heat pumps are an energy upgrade for homeowners that’s becoming a climate and financial winner
Heat pumps are becoming more popular for residential housing with energy prices increasing and the need to reduce use of fossil fuel heating systems.
Andrew Aitchison | In Pictures | Getty Images
Thinking about a home heat pump? New and expanded government incentives, coupled with sharply rising utility costs, make it more compelling.
Especially when used in connection with clean electricity sources like rooftop or community solar, a heat pump — a single electric appliance that can replace a homeowner’s traditional air conditioner and furnace system — can warm and cool a home with less planetary harm.
These investments are becoming more appealing to consumers, too, given inflation’s heavy hand. A whopping 87% of U.S. homeowners surveyed said they experienced higher prices in at least one household service or utility category over the summer, according to SaveOnEnergy.com. There’s another possible bonus: Incentives being offered through the recently passed Inflation Reduction Act of 2022.
“These incentives are not only saving you money now and in the long run on your utility bills, but they are putting our economy on track to reduce consumption of fossil fuels that contribute to climate change,” said Miranda Leppla, director of the Environmental Law Clinic at Case Western Reserve University School of Law. “It’s a win-win.”
The use of heat pumps will become more common as governments legislate their adoption. Washington State recently mandated that new homes and apartments be constructed with heat pumps. In July, California Governor Gavin Newsom announced a goal of 3 million climate-ready and climate-friendly homes by 2030 and 7 million by 2035, supplemented by 6 million heat pumps by 2030.
Here are four important things to know about upgrading your home to a heat pump system.
Heat pump cost, savings and efficiency considerations
Heat pumps are appropriate for all climates and are three to five times more energy efficient than traditional heating systems, according to Rewiring America, a nonprofit focused on electrifying homes, businesses and communities.
Rather than generating heat, these devices transfer heat from the cool outdoors into the warm indoors and vice versa during warm weather. Heat pumps rely on electricity instead of natural gas or propane, both of which have a higher carbon emission than renewable electricity such as wind or solar, said Jay S. Golden, director of the Dynamic Sustainability Lab at Syracuse University.
With installation, heat pumps can range from around $8,000 to $35,000, depending on factors such as the size of the home and heat pump type, according to Rewiring America, but it estimates the savings could amount to hundreds of dollars per year for an average household. What’s more, it’s a long-term play, since heat pumps that most people will consider installing have an average lifespan of 10 to 15 years, according to Rewiring America.
Electricity costs also tend to be more stable, insulating consumers against gas price volatility, said Joshua Skov, a business and government consultant on sustainability strategy who also serves as an industry mentor and instructor at the University of Oregon.
“While there’s an upfront cost, millions of homeowners would save money with a heat pump over the life of the device,” he said. “You’ll save even more with the federal government covering a chunk of the upfront cost.”
Inflation Reduction Act incentives
The Inflation Reduction Act — an expansive climate-protection effort by the federal government — includes multiple incentives to lower the cost of energy-saving property improvements. These incentives significantly exceed what’s available to homeowners today, said Jono Anzalone, a lecturer at the University of Southern Maine and the executive director of The Climate Initiative, which empowers students to tackle climate change.
For low-income households, the Inflation Reduction Act covers 100% of the cost of a heat pump, up to $8,000. For moderate-income households, it covers 50% of your heat pump costs, up to the same dollar limit. Homeowners can use a calculator — such as the one available from Rewiring America — to determine their eligibility.
If you’re considering multiple green home improvements, keep in mind that the law’s overall threshold for “qualified electrification projects” is up to $14,000 per household.
Federal tax credits for homeowners
For those who exceed the income threshold for a rebate, there’s the option, starting Jan. 1, to take advantage of the nonbusiness energy property credit, commonly referred to as 25C, said Peter Downing, a principal with Marcum LLP who leads the accounting firm’s tax credits and incentives group.
Homeowners can receive a 30% tax credit for home energy efficiency projects such as heat pumps. In a given year, they can get a credit of up to $2,000 for installing certain equipment such as a heat pump. This credit will expire after 2032, according to the Congressional Research Service.
There can be another tax credit to homeowners who purchase a geothermal heat pump, which is a more expensive, but longer-lasting option on average. Homeowners can receive an uncapped 30% tax credit for a geothermal heating installation, according to Rewiring America, which estimates an average geothermal installation costs about $24,000 and lasts twenty to fifty years. That means the average tax credit for this type of pump will be around $7,200, Rewiring America said.
The ventilation system of a geothermal heat pump located in front of a residential building.
Picture Alliance | Picture Alliance | Getty Images
Rulemaking is still underway for the Inflation Reduction Act. But it is possible eligible consumers will be allowed to receive both a rebate and a credit, Downing said. But the math is not likely to be as straightforward, based on previous IRS guidance on energy rebates backed by the federal government. Say a consumer is entitled to a 50% rebate for a heat pump that costs $6,000. For purposes of the tax credit, the remaining $3,000 could be eligible for a 30% tax credit, resulting in a possible credit of $900, he said.
State and local financial support
States, municipalities and local utility companies may provide rebates for certain efficient appliances, including heat pumps. “Check with all of them because there are so many different levels of programs, you really need to hunt around,” said Jon Huntley, a senior economist at the Penn Wharton Budget Model who co-authored an analysis of the Inflation Reduction Act’s potential impact on the economy.
Also be sure to check back frequently to see what new state, local and utility-based incentives may be available because programs are often updated, Golden said. Reputable local contractors should also know about locally available rebates, he said.
Many installers have aggressive financing packages to make heat pump installation more feasible, Anzalone said.
Tesla has unexpectedly terminated a contractor’s contract at Gigafactory Texas, resulting in the layoff of 82 workers who were supporting the automaker’s production at the giant factory in Austin.
MPW Industrial Services Inc., an Ohio-based industrial service provider specializing in cleaning and facility management, has issued a new WARN notice, confirming that it will lay off 82 workers in Texas due to Tesla unexpectedly ending its contract with the company.
Here are the details from the WARN notice:
- State / agency: Texas Workforce Commission (TWC).
- Notice date: August 27, 2025.
- Employees affected: 82
- Likely effective date: September 1, 2025
- Context from the filing/letter: layoffs tied to an unexpected termination of a major customer contract (Tesla—Gigafactory Texas, 1 Tesla Road); positions include 61 technicians, 7 team leads, 7 supervisors, 7 managers; no bumping rights; workers not union-represented.
In April 2024, Tesla initiated waves of layoffs at the plant, resulting in the dismissal of more than 2,000 employees in Austin, Texas.
Since then, Tesla’s sales have been in a steady decline. While the automaker is expected to have a strong quarter in the US in Q3 due to the end of the tax credit, sales are expected to decline further in Q4 and the first half of 2026.
Many industry watchers have expected Tesla to initiate further layoffs due to the situation.
Electrek’s Take
We may be seeing the beginnings of a new wave of layoffs at Tesla, as the automaker typically starts with contractors.
To be fair, Tesla could also potentially end the contract unexpectedly for other reasons, but the timing does align with the need to cut costs and staff ahead of an inevitable downturn in US EV sales.
I think it’s inevitable that we start seeing some layoffs. I think Tesla will have to slow down production in the US to avoid creating an oversupply, especially in Q4-Q1.
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First, it was e-bikes, offering an efficient, effective, and low-cost way for teens and just about everyone to zip around town, yet drawing the temper of suburban traditionalists. Now golf carts are the new public enemy number one in suburbia, at least if you ask the growing number of online groups where residents complain about these small electric vehicles “clogging” their streets.
But beyond the hand-wringing, golf carts and their more sophisticated cousins known as Neighborhood Electric Vehicles (NEVs) or Low Speed Vehicles (LSVs), are quietly becoming a popular alternative to cars for short trips around US cities and suburbs.
While most people still associate golf carts with retirement communities in Florida or slow rides across 18 holes, street-legal versions have been around for the last few decades.
But these aren’t your grandpa’s bare-bones carts, complete with a golf pencil clip. Many now come with DOT seat belts, lights, turn signals, mirrors, backup cameras, and speed limiters that allow them to operate legally on roads up to 35 mph, as long as they meet all the federal requirements for Low-Speed Vehicles (LSVs).
That means such vehicles are legally allowed to operate like cars, trucks, bicycles, or motorcycles on the vast majority of residential streets and a surprising portion of urban grids. In other words, for grabbing groceries, school drop-offs, or cruising to a friend’s house, they’re a practical, cheaper, and far greener substitute for firing up a 5,000-pound SUV.
Golf carts have been slowly taking off for years, but the pandemic accelerated the trend. Sales of golf carts and LSVs spiked as families looked for safe, outdoor transportation and an easy way to get around their neighborhoods. Now, in cities all over the country, the sight of parents driving their kids to school or running errands in a cart is increasingly common. In some towns, petitions have even popped up with hundreds of residents asking for local ordinances to legalize them on more streets, according to the Daily Mail.
Of course, not everyone is thrilled. There’s growing backlash against the increase in golf carts on streets, with many residents calling them a “plague” and complaining that they’re taking up space on the roads, in parking lots, or creating unsafe conditions. While rare, there have been serious accidents too, with a handful of tragic cases highlighting the dangers of mixing small, lightweight carts with full-size vehicles. Critics argue that carts lack the crash protection of cars and don’t always fall under homeowners’ insurance policies if an accident happens.
But for every critic, there’s a supporter pointing out that golf carts take cars off the road, save money on fuel, and are no more dangerous than scooters or e-bikes – modes of transport that already share the streets. And major golf cart makers have been happy to respond to the demand with boosted sales and new models. Companies like E-Z-GO, Club Car, WAEV, Kandi, and others are all rushing new models to the market as more suburban commuters discover that their next electric vehicle might just cost a fraction of what they thought it would – and come with a better breeze, too.
Electrek’s Take
If I didn’t know any better, I’d say it’s like the Karens are just following me around to poo-poo on any alternative vehicle I happen to drive that week. They’ve hit all my favorites. Pretty soon, they’ll be coming for my electric tractors, too!
But seriously, this feels like déjà vu. The same arguments we’ve heard for years against e-bikes are now being recycled against golf carts: too unsafe, too disruptive, too “different” from the car-centric status quo.
But the reality is, again, quite the same as e-bikes. These are small electric vehicles that make a ton of sense and are totally street legal, at least when they’re built correctly to conform to the proper laws.
They come with a lot of the same benefits, too. They’re cheap to operate, easy to park, perfect for short trips, and they prevent larger cars from needlessly clogging residential streets. Will they ruffle feathers among the kind of folks who have had one too many frisbees land in their yard? Perhaps. But much like e-bikes, their popularity is only going one direction – up.
I leave you with a few images of perhaps my favorite of all, the Kandi Mini. The nay-sayers can pull it from my cold, dead, golf
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With 400 hp and 200 km (125 miles) of all-electric range, Volvo’s new-for-2026 XC70 “long range plug-in hybrid” has made its official debut – and the order books are open. But, unfortunately for American fans of Swedish metal, it’s not available here. Yet.
Volvo first teased the new XC70 as a China-only model back in May, resurrecting an iconic name for the brand and representing an important product addition to the lineup and developed to meet the growing demand for longer-range plug-in hybrids in that market. A lot has changed since then, however – and with the looming threat of tariffs and trade wars on the one hand plus an increasing appetite for EREVs and PHEVs globally and a new CEO at the helm, Volvo’s new XC70 may yet make it to other markets.
“The new XC70 is a very attractive choice for customers who want the benefits of electric driving but are not yet ready to go fully electric,” explains Håkan Samuelsson, new new/old president and chief executive of Volvo Cars. “It is a cornerstone of our electrified product portfolio, a bridge to fully electric cars for our customers, and it will strengthen our presence in the world’s largest car market.”
The new XC70 is built on Volvo Cars’ new Scalable Modular Architecture (SMA) platform for plug-in hybrids, which are intended to deliver the environmental and performance benefits of electric drive with the added flexibility of an ICE backup.
With 20-30 miles of electric range from a relatively small battery, that promise may ring hollow to many – but with 200 km (nearly 125 miles) of range on tap, it feels like it might be real enough this time out. The company claims its “efficient” allows drivers to drive over 1,200 km (nearly 750 miles) without recharging or refueling.
Active aero trickery
Part of those big range numbers is battery and engine tech, sure – but another large part is the new Volvo’s aerodynamic efficiency. At the front, a shield-like closed grille that echoes the fully electric Volvo EX90 and EX30 is paired with an active grille shutter (above) that automatically adjusts to minimize drag and optimize cabin climate and cooling.
Meanwhile, the vertical C-shaped taillights at the rear are integrated flush into the rear glass, which Volvo says creates “a sleek, modern look that is both eye-catching and functional.”
Tech-focused interior
Inside, the new XC70 presents a tech-first format, feturing a crisp 12.3″-inch” driver display and a laptop-sized, free-standing 15.4″-inch” central display in a horizontal format that allows the driver to view a large navigation map while still having space for other key functions.
It’s an odd move for the Swedish brand that’s already facing criticism over software bugs. Still, its hybrids have fared better on that front than the EX90, and the XC70’s standout feature — a massive 92-inch augmented reality heads-up display — could deliver that “wow factor” that’s needed to win over any doubters.
On the safety front, the new XC70 is riddled with radars, cameras, and sensors to continuously monitor its surroundings and avoid or mitigate collisions when it can. It also comes equipped with with Volvo-standard safety features like BLIS and City Safety.
For a relaxed driving experience, the XC70 also offers Pilot Assist ADAS Park Pilot Assist, as well as active navigation support.
Production of the new XC70 is already underway and the new long-range PHEV is now available to pre-order in China. No word yet on European (or American, here’s hoping) pricing.
2026 Volvo XC70 gallery
SOURCE | IMAGES: Volvo Cars.
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