Rebate overhaul spurs jump in heat pump water heater installs

An incentive program run by the Tennessee Valley Authority (TVA) rebated over 1,500 heat pump water heaters within six months of restructuring its model, following a period of low adoption. 

What’s happening: In October 2023, TVA began offering homeowners $800 rebates for heat pump water heater (HPWH) installations, but after a year, it had issued 90 rebates. 

• The utility changed its approach, tailoring incentives to manufacturers, though the strategy was short-lived. 
• In March 2025, TVA pivoted again, offering consumers a $1,300 retail rebate, removing certain information-collection requirements, and paying distributors and contractors $50 each. 
• By September 30, TVA had rebated roughly 1,800 HPWHs. 

What they’re saying: “Plumbers don’t like heat pump water heaters,” said Andy Meyer, senior program manager at Efficiency Maine, which has rebated 80,000 HPWHs through a similar program. They’re “heavier” and “require two plumbers instead of one,” he added. 

• Yes, but: Contractor buy-in — including the $50 fee — was a focus of TVA’s broader restructuring. “If we didn’t build that confidence, they were going to deter homeowners from installing heat pump water heaters,” said Bethany Klitch, residential rebate program manager at TVA, on a late-2025 call about the program’s rollout. 

What we’re watching: TVA’s rebate will drop to $900 per unit on February 15, with the utility targeting 4,000 installs this year, Klitch added. 

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