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US heat pump sales keep rising after tax credits ended
Heat pump sales in the US have doubled in 15 years and kept climbing in early 2026, even after a key federal tax credit expired.
Image: MIT Technology Review
Heat pumps are still gaining ground in the US, even after a major federal incentive disappeared. According to a new report, US heat pump sales have doubled over the past 15 years, and in the first quarter of 2026 they outpaced natural-gas furnaces by 32%.
That is notable because a tax credit worth up to $2,000 for people who installed heat pumps between 2023 and 2025 ended on January 1, 2026, after the Trump administration cut that incentive and others created under the 2022 Inflation Reduction Act. A similar policy change hit the EV market hard: tax credits of up to $7,500 for new EVs ended on September 30, 2025, driving a short-term sales spike before a sharp drop.
Heat pumps, though, are following a different pattern. As Lucas Davis, an energy economist and UC Berkeley professor, wrote in a new analysis, shipments were flat from December to January and then rose gradually through the first months of 2026, based on data from the Air Conditioning, Heating, and Refrigeration Institute, which represents about 90% of the US market. The winter-to-spring increase matches normal seasonal patterns and is actually somewhat stronger this year.
That suggests the loss of the tax credit has not meaningfully weakened demand. Davis wrote:
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“It appears that the U.S. market for heat pumps is strong enough that it does not depend on tax credits,”
The core appeal is straightforward. Heat pumps use electricity to move heat rather than generate it by burning fuel, making them highly efficient. Many models can also reverse to cool buildings. While they usually cost more to buy and install than gas furnaces, they are generally cheaper to run than gas, oil, or other electric heating systems.
The technology has also become a bigger part of the building decarbonization push. MIT Technology Review included heat pumps on its 2024 list of breakthrough technologies, and the devices have now outsold gas furnaces in the US for the last four years. The same shift is showing up beyond the US, with countries including China and Germany also seeing strong movement toward heat pumps.
Frontier Editor
Dan is our resident futurist, covering electric mobility, space exploration, and the smart home. He's interested in atoms just as much as bits. Whether it's a new battery chemistry, a reusable rocket, or a protocol that finally makes IoT devices talk to each other, Dan breaks down the engineering that pushes humanity forward.
