Saving Money

2023 Tax Credits and Rebates for Heat Pump and Solar Water Heaters

Conventional water heaters are notoriously inefficient, accounting for about 20 percent of a household’s energy bill. That is why federal and state governments are now offering rebates and tax credits to homeowners who upgrade to heat pump or solar water heaters. Is your water heater aging? Are your energy bills rising? Now is a great time to upgrade to an energy efficient water heater.

Hawai’i Energy Instant Rebates

Clean Energy Allies like Steve’s Plumbing & AC have been authorized by Hawai’i Energy to offer instant rebates on your invoice when installing eligible heat pump or solar water heaters. Homeowners will receive a $500 instant rebate with installing ENERGY STAR® certified heat pump water heaters, up to 82 gallons. Homeowners will receive a $1,250 instant rebate when installing a solar water heating system.

Inflation Reduction Act Rebates and Tax Credits

The Inflation Reduction Act of 2022 (IRA) provides for tax credits on energy reduction projects completed in 2023. And through the IRA’s High-Efficiency Electric Home Rebate Act (HEEHRA) program, homeowner can receive rebates upfront for qualified electrification projects. These include a rebate of up to $1,750 for heat pump water heaters and up to $8,000 for heat pump air conditioners, depending upon household income.

Heat Pump Water Heaters

A great option for lowering your water heating costs is to install an ENERGY STAR® heat pump water heater. Heat pump water heaters are twice as efficient as a traditional tank water heaters, cutting your water heating costs in half. If you are upgrading from a gas water heater your savings will be even greater. The U.S. Energy Information Administration (EIA) estimates that in 2023, natural gas prices will increase by 28% over the prior year, and that electricity prices will increase by 10% over the prior year.

Solar Water Heaters

Solar water heaters are the most efficient way to heat your water, saving you up to 40% on your energy bill. They also last twice as long as other water heaters, 20 years on average. Though the initial cost is greater, the State of Hawaii offers affordable financing through its Hot Water Cool Rates financing program and through programs in Maui and Kauai offering free financing.

Are Tankless Water Heaters Energy Efficient?

Yes! Although not quite as efficient as a heat pump or solar water heating system, tankless water heaters are 24% to 34% more efficient than tank water heaters, according to Even upgrading to a newer conventional tank water heater can save you 4% in energy costs according to Consumer Reports.

What is the Best Water Heater for My Home?

All types of water heaters work well in your home. But with the multitude of rebates and tax credits available on heat pump and solar water heaters, they may be the most affordable both up front, and over the long run in energy cost savings. The plumbing experts at Steve’s Plumbing & AC can help you choose the best option for your family and for your budget, and help you maximize financial savings from rebate and tax credit programs. Call us for a free consultation today at 808-431-3646, or click here to schedule online.