Reforming Energy Efficiency Programs to Increase Heat Pump Adoption

The report argues that current US energy efficiency programs are overly complex, resulting in low participation rates (0.5% to 3% of households) and significant barriers for low-to-moderate income (LMI) families. To drive heat pump adoption and meet climate targets, the document recommends simplifying incentive structures (e.g., using $/unit instead of $/BTUh), aligning equipment specifications with federal standards like ENERGY STAR, and providing up-front discounts with prompt contractor reimbursement. It emphasizes the need for long-term funding (3-5 years), market development through workforce training, and a 'climate-forward' framework that prioritizes greenhouse gas reductions over simple energy savings. For equity, it suggests partnering with community-based organizations, setting LMI-specific budget targets, and funding pre-electrification measures like electrical panel upgrades.

• Current US energy efficiency programs are characterized by excessive complexity, leading to very low adoption rates where only "0.5% to 3% of US households take advantage of them."
• Low-to-moderate income (LMI) households face significant barriers to access, being "only one-third as likely to receive incentives as their moderate-income counterparts."
• To simplify programs, administrators should use incentive structures that are easy for customers to understand; specifically, "Incentives based on $/unit are easier for customers to understand relative to incentives expressed in $/BTUh" and do not encourage equipment oversizing.
• Program administrators should align equipment specifications with federal standards to reduce confusion, specifically those for "IRA appliance rebates" which "require ENERGY STAR certification" and the "enhanced federal tax credit for home efficiency (25C)" which requires the highest CEE tier for air-source heat pumps.
• Up-front discounts are more effective at capturing customer participation, but they require that "Contractors should be reimbursed for the discounts promptly — ideally no more than two weeks following project completion."
• Program durability requires financial stability, with the recommendation that "Funding levels should be established for at least three to five years" to attract the necessary workforce and financing agencies.
• States should transition to a "climate-forward efficiency framework" by expanding the focus from energy savings to include "greenhouse gas (GHG) reductions" and phasing out rebates for gas-fired appliances.
• Equitable program delivery for LMI households requires addressing home conditions before heat pump installation, including "toxic chemical removal, roof and wiring repairs, and improved ventilation," as well as "electric panel upgrades."

APA

RMI (2025). Reforming Energy Efficiency Programs to Increase Heat Pump Adoption. https://rmi.org/resources/reforming-energy-efficiency-programs-to-increase-heat-pump-adoption/

Chicago

RMI. Reforming Energy Efficiency Programs to Increase Heat Pump Adoption. 2025. https://rmi.org/resources/reforming-energy-efficiency-programs-to-increase-heat-pump-adoption/.

Wikipedia

{{cite report |author=RMI |title=Reforming Energy Efficiency Programs to Increase Heat Pump Adoption |date=26 March 2025 |url=https://rmi.org/resources/reforming-energy-efficiency-programs-to-increase-heat-pump-adoption/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2025reforming, author = {{RMI}}, title = {{Reforming Energy Efficiency Programs to Increase Heat Pump Adoption}}, institution = {RMI}, year = {2025}, month = mar, url = {https://rmi.org/resources/reforming-energy-efficiency-programs-to-increase-heat-pump-adoption/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }