Like many families, we were counting on a federal heat pump tax credit to help us finally upgrade our 60-year-old heating system. Recent changes mean that tax credit ends seven years earlier than planned. (Colton Knowles/Dogwood)
We thought we had until 2032 to replace our ancient heating system and take advantage of a federal tax credit. Then the rules changed—without warning—and now families like ours are left out in the cold.
Our home is old. It’s 115 years old, to be exact. And while I love the character that comes with an elderly abode, the near-constant repairs and need for upgrades are exhausting. So when my husband and I learned that the Inflation Reduction Act (IRA), a federal law passed in 2022, included a 30% tax credit for certain home repairs, we were stoked.
Like many families, we were counting on a federal heat pump tax credit to help us finally upgrade our heating system. We thought we had until 2032 to make it happen, but thanks to modifications included in the One Big Beautiful Bill Act—which scaled back and repealed multiple green energy tax incentives in the IRA—the rules changed without warning. The deadline to take advantage of that credit moved up by seven years, and ends in December.
See, at 36 and 32 years old, my husband and I, respectively, do our finances a little differently than many of our peers. Our broad rule is: If we can’t pay cash for it, we can’t afford it. Sure, we have student loan debt and a mortgage—but we refused to borrow money to purchase our 2006 truck (which we got in 2020) or our 2014 car in 2024.
Emergencies—like having to repipe our entire house last summer—are a different story. But we’re down to owing $1,500 on the loan we took out for that, and we’re projected to pay it off in March.
Living like this has its perks. We aren’t strapped to credit card debt, and we’re able to take care of our basic needs, a vacation here and there, and a relative amount of wants, too, while still putting back some funds for savings.
However, that also means we don’t have $8,000 to $15,000 laying around to put toward the average price of a heat pump.
It’s not that we don’t need it. We do. Our home’s heat runs off of an oil circulator, which as far as we can tell was installed in the mid-1960s. Sure, it’s lasted a long time—far longer than the average heat pump replacement time of 12 to 15 years. But, boy, is it expensive. In fact, it’s so much a part of our family’s budget that we gave it a name: Wilbur.
Last year, oil costs were about $500 for 125 gallons in our area. Depending on how cold the outdoor temperature is, that amount generally heats our 2,000 square-foot home for three or four weeks when we set our thermostat to 62 degrees. Yes, oil is considered a “warm” heat, but we still have to pay for electricity to run Wilbur.
We usually buy our first 125 gallons in November and last in March—so that’s $2,500 solely in oil costs. That’s in a “good” year when temperatures stay relatively moderate and prices of oil stay low. We’ve also paid over $700 for a single oil delivery before—and like the price of gas, there’s no way to tell when and by how much the cost will fluctuate. That’s why we do our best to be prepared.
Admittedly, we’ve tried saving for a heat pump for a while now. We even got so close in 2023, we had someone come over and quote us on an installation. A few weeks later, our car got totaled by a drunk driver, and we had to reallocate the heat pump savings into buying another vehicle.
We were getting on track to try again last summer, but the pipes burst and we’re still chipping away at repairing everything that was damaged then. A couple of weeks ago, our hot water heater started leaking. We’re replacing that at the end of the month.
It seems like every time we start to try to plan again, something more pressing comes along. It’s something families across Virginia and beyond know all too well. In fact, approximately 42% of Gen Z, millennial, and Gen X workers in America had no spare savings after covering their basic living expenses, according to a recent study.
But that was okay—we had until 2032 to save up for the illustrious heat pump.
So to recently find out that the tax credit goes away seven years earlier than promised? It felt like a gut punch.
And yeah, it does feel strange to have this goading my mind when I know there are so many people who don’t even have a roof over their heads this winter. But I wonder what happens if Wilbur—who’s admittedly finicky anyway—decides that 60+ years of service was more than enough, but the money to replace him isn’t there yet.
We thought we had more time; we thought 2032 was a promise. And sure, we’ll figure it out and we’ll make it work—we always do. But for folks like us who are trying to manage their finances responsibly (or even those who aren’t, but could use the help) banking on the silver lining of that tax credit was big. And now it’s gone.
RELATED: Time’s running out for VA heating system tax credits
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