US Heat Pump Sales Double Amid Shifting Incentives

Heat pump sales in the United States have doubled over the past 15 years, demonstrating a significant rise in popularity for the electric heating and cooling appliances. These devices are increasingly outperforming traditional heating methods, outpacing natural-gas furnaces by 32% during the first quarter of 2026. This growth trend is notable considering that a key federal tax credit for heat pumps concluded at the end of 2025.

Heat pumps operate by using electricity to transfer heat from one location to another. A refrigerant circulates within the appliance, changing state to absorb and release heat. This process allows heat pumps to be highly energy-efficient, generally resulting in lower running costs compared to gas or oil furnaces and other electric heating systems once installed. Beyond cost savings, their efficiency and lack of fossil fuel combustion make them a valuable tool for decarbonizing buildings.

A primary barrier to widespread heat pump adoption has been their higher upfront cost for purchase and installation compared to gas furnaces. To address this, governments have historically provided incentives. In the US, individuals who installed heat pumps between 2023 and 2025 could claim tax credits of up to $2,000. However, the Trump administration reduced these tax credits, along with other incentives from the 2022 Inflation Reduction Act, impacting future adoption.