IRA Incentives in Limbo: What HVAC Contractors Need to Know Now

President Trump’s recent executive order has sent shockwaves through the HVAC industry by pausing the disbursement of funds under the Inflation Reduction Act (IRA). This move already has created uncertainty for HVAC and home services contractors who have been leveraging the act’s incentives to boost business and help homeowners upgrade to more efficient systems.

Since then, there has been some speculation that the IRA may survive the storm. However, in the past 48 hours, there have been some new additions to this saga.

Yesterday a Federal Judge ruled that there should be a pause on the Federal spending freeze until Feb 3rd, and today the White House quickly reacted by rescinding the order. At the time of press, this raises more questions than answers regarding the status of the Inflation Reduction Act (IRA). Obviously the situation is fluid, but here’s what we know about the order, its potential impact if it were to stay in place, and some tips on how contractors should pivot.

Impact on HVAC and Home Services Contractors

The suspension (and its possible repeal) primarily affects the Home Energy Rebates programs, which allocated nearly $9 billion for states to provide point-of-sale rebates for qualified HVAC upgrades. Here’s what you need to know:

• Ongoing Programs: 12 states and Washington D.C., have active programs. It’s unclear about the extent to which these will be affected, as they have contractual rights to the funds and they are in various stages of implementation.
• Pending Programs: For the 38 states awarded funding but haven’t launched their programs, approval is likely to be delayed beyond the 90-day pause if the ban stays in place.
• Tax Credits: The executive order does not impact tax credits like Section 25C, which many contractors offer to customers for installing more efficient systems.

What Should HVAC Contractors Do?

Despite the uncertainty, there are steps you can take to navigate this situation:

1. Stay Informed: Keep abreast of updates from your state regarding the status of rebate programs, particularly for the next 3 months as the programs undergo government review and/or come back online as part of the spending freeze recension.
2. Focus on Tax Credits: Continue to promote available tax credits, which remain unaffected by the executive order.
3. Educate Homeowners: Inform clients about the situation and the benefits of energy-efficient upgrades, regardless of rebates.
4. Continue to Focus on Heat Pumps: Whether IRA incentives are available or not, heat pumps have steadily been growing in popularity due to their efficiency.
5. Prepare for Changes: Be ready to adapt your business strategy as the situation evolves over the next 90 days if the ban stays in place.

Remember, while rebates may be on hold, the demand for energy-efficient HVAC systems remains strong. By staying adaptable and focusing on long-term value for customers, you can continue to thrive in this changing landscape. We will continue to keep you updated as the IRA evolves.

Simplify the Complex: Your Partner in Marketing and Growth

Want to work with a marketing agency that has your back and makes navigating these changes turnkey for your Home Services business? At Mediagistic, we specialize in simplifying the complex, so you can focus on what you do best—serving your customers. From staying ahead of policy updates to leveraging every available incentive for your clients, we’re here to help you grow with confidence. Let’s make marketing easy. Contact us today!

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Kara Moore is a Senior Account Development Manager at Mediagistic with a proven track record of helping clients in the HVAC and Home Services industries, as well as manufacturers, distributors, and dealers, achieve measurable business growth. She specializes in developing tailored advertising plans based on in-depth market and business research, ensuring her clients’ marketing dollars are effectively spent to increase leads, enhance branding, and deliver a positive return on investment. Kara’s expertise spans marketing management, digital marketing, sales, coaching, and event planning, and she holds a Bachelor’s Degree in Marketing from the University of South Florida. Her consultative and results-driven approach empowers businesses to grow revenue, expand teams, and build lasting customer connections. Connect with her on Linkedin.