Heat pumps are proving more resilient than other clean energy technologies after the expiration of federal tax credits. Shipments in the first half of 2026 remained strong, and the industry is on pace to match or beat its best year, according to data from the Building Decarbonization Coalition and the Air-Conditioning, Heating, and Refrigeration Institute. This comes despite the 25C tax credit, which covered up to $2,000 of a heat pump's cost, expiring at the end of 2025 — seven years earlier than originally scheduled.
Why the staying power? The credit may never have been a decisive factor for most buyers. UC Berkeley business professor Lucas Davis has suggested that many households adopted heat pumps without knowing about the credit, or only learned of it later during tax filing. Research points to geography, climate, and electricity prices as stronger drivers of adoption. Contractors also told industry publication ACHR News that they typically raised the credit with customers, not the other way around.
State and utility incentives, local ordinances encouraging fossil-fuel phaseouts, and growing contractor familiarity with heat pumps have helped fill the gap. The same cannot be said for rooftop solar and electric vehicles, which have shown signs of struggle in the post-tax-credit era. Barring a major shift in consumer behavior, 2026 looks set to be a very good year for heat pumps.