US heat pumps keep selling, even after the tax credit expired

A new report finds US heat pump sales have doubled in 15 years and held up after a $2,000 federal credit lapsed on January 1.

A new report finds US heat pump sales have doubled over the past 15 years, and the momentum did not stop when the subsidy did. In the first quarter of 2026, heat pumps outsold natural-gas furnaces by 32%, and they have now outsold gas furnaces four years running. That is notable because a federal tax credit of up to $2,000 for heat pumps installed from 2023 through 2025, part of the 2022 Inflation Reduction Act, ended on January 1, 2026.

The shipment figures come from the Air Conditioning, Heating, and Refrigeration Institute, a trade group covering roughly 90% of the US market. Shipments were flat from December to January, then rose gradually — a normal winter-to-spring pattern, though somewhat stronger this year. UC Berkeley energy economist Lucas Davis, who analyzed the data, concluded the market is now strong enough to stand without the credit.

Why it matters for household costs: a heat pump uses electricity to move heat through a refrigerant cycle, and once installed it is generally cheaper to run than gas, oil, or resistance-electric heating. Every furnace it replaces lowers a home's ongoing energy bill and shifts heating onto an increasingly clean grid. That the trend holds without a subsidy suggests the economics, not just the incentive, are carrying it — a pattern also seen in China and Germany.

Two honest caveats. The post-credit strength rests on only a few months of data, and part of the rise is the ordinary seasonal bump. And the main barrier to wider adoption remains the higher upfront cost of buying and installing a heat pump versus a gas furnace, which the running-cost savings must pay back over time. Watch whether the lead holds through a full year without the credit.

Source: MIT Tech Review