Nobody likes taking cold showers or baths, but as your water heater ages and becomes less efficient, you might not be able to afford a replacement unit.
Fortunately, at least five different government programs assist in buying and installing new water heaters that reduce your carbon footprint.
Low-income families living near or below the poverty level, individuals with disabilities, and seniors living in rural areas might qualify.
Middle- and upper-class taxpayers who fund these benefits can receive government support when upgrading to energy-efficient models.
This article will examine how these programs work, who is eligible to participate, and how and where to apply.
Government Programs for Water Heaters
At least five federal government programs offer water heater assistance, possibly leading to free or low-cost replacement units for families across the income spectrum.
Government HVAC efficiency upgrade incentives stem from the same programs. If you qualify for one or more, you might be eligible to upgrade your furnace, hot water boiler, or air conditioning equipment at no additional cost.
Weatherization Assistance
The Weatherization Assistance Program (WAP) is the most established way to get a free or low-cost water heater from the government. The Department of Energy oversees WAP, which supports various upgrades for low-income homeowners if the project reduces electricity or gas consumption.
Apply for WAP through your state agency. A local contractor will begin the process by conducting a home energy audit. The analysis will generate recommendations based on a Savings Investment Ratio (SIR), often prioritized in this order.
- Addition of insulation and weather stripping
- Upgrade inefficient heating and cooling units
- Swap in new water heaters
- Update inefficient household appliances
- Drafty window and door upgrades
- Leaky roof repair and replacement
- Installation of smoke and carbon monoxide detectors
Home Energy Assistance
The Low-Income Home Energy Assistance Program (LIHEAP) is an indirect government initiative offering free water heater replacement. The US Department of Health and Human Services administers LIHEAP, which allocates most of its budget to lower utility bills (gas and electric).
Apply for LIHEAP through your state agency to lower the total cost of ownership for any new or existing unit. Remember that operating expenses are an enormous part of the equation.
You can more readily afford a water heater when you receive help paying for the energy that makes it run! Plus, LIHEAP might pay for a new unit if yours consumes too much gas.
Inflation Reduction Act
The Inflation Reduction Act (IRA) is the newest government program offering free water heaters to some people. IRA includes rebates and tax credits for upgraded equipment that uses electricity rather than gas, which is supposedly better for the environment.
Rebate Program
The IRA rebate program provides low-income households with free heat pump-powered water heaters and assistance to those with modest annual earnings. A heat pump uses electricity instead of gas.
The IRA provides up to $14,000 in rebates for purchasing and installing specific equipment (including heat pump water heaters) and related upgrades, consuming cleaner electricity instead of dirtier natural gas.
- Low-income (less than 80% of state median): 100% of the expenses costs up to $14,000
- Moderate-income (80% to 150% of state median): 50% of costs up to $14,000
Tax Credits
The non-refundable IRA tax credit program provides water heater assistance to families with higher incomes ineligible for the 100% rebates. A non-refundable credit reduces your income tax liability if you have one.
Claim the IRA-supported tax credit of up to $3,200 after making qualified energy-efficient improvements to your home, including two water heater benefit levels.
- $600: Natural gas, propane, or oil
- $2,000: Units run by heat pumps
Solar Credits
Homeowners installing solar-powered water heaters may qualify for a free IRS program that reduces project costs by 30%. The federal government provides financial incentives for green technologies.
The Residential Clean Energy Credit allows you to reduce your tax obligation by 30% for qualified solar water heater installation costs with no annual maximum. Prices range to $5,000 for systems with active circulating pumps and controls.
Of course, you must own your home and have a tax liability to take advantage. Consult your tax advisor before filing Form 5695 with your return.
Section 504
Section 504 is sometimes a government program for free water heaters for senior citizens living in rural areas. The US Department of Agriculture oversees this program, which provides up to $10,000 of assistance.
Recipients do not have to repay the money when remediating health and safety hazards. A leaky water heater presents a fall risk.
Apply for Section 504 grants by contacting your local rural development office. Qualified seniors age 62 and older must meet these criteria.
- Be the homeowner and occupy the residence
- Reside in an eligible rural area
- Unable to obtain a loan elsewhere (bad credit)
- Have a family income below 50% of the area median
- Unable to repay a restoration loan
Qualifying for Free Water Heaters
This section illustrates how these various government programs could provide free water heaters for low-income families, disabled individuals, and seniors.
Therefore, pay close attention if you have an older water heater and have no money to replace it.
Low-Income
Low-income families often qualify for free water heaters because the government favors households living at or below the federal poverty level. Each program utilizes slightly different earnings criteria.
Low-income home repair benefits can include water heaters and extend to other projects. Three government programs might chip in if your household meets varying criteria.
- IRA covers 100% of costs for households earning less than 80% of the state median income for families purchasing energy-efficient units.
- WAP helps families living at or below 200% of the federal poverty level, which compares annual earnings against household size.
- LIHEAP helps with utility bills for households living at or below 150% of the federal poverty level, lowering equipment operating costs.
Disabled Individuals
Individuals with disabilities are sometimes eligible for free water heaters as they often meet the low-income criteria for WAP, LIHEAP, and IRA. Social Security Disability benefits do not stretch very far.
However, Supplemental Security Income (SSI) recipients have an advantage over those getting Social Security Disability Insurance (SSDI) payments.
SSI recipients automatically qualify for home improvement help through WAP and LIHEAP, provided they have a project with an excellent savings-to-investment ratio. They do not need to prove they meet the income thresholds, whereas SSDI recipients must.
Senior Citizens
Senior citizens relying on Social Security Retirement Income sometimes qualify for free water heaters through WAP, LIHEAP, and IRA because they often meet low-income requirements. Section 504 is another option for older adults living in rural areas.
Senior home repair assistance extends well beyond water heater replacements, including fixes to windows, doors, roofs, foundations, HVAC equipment, and more.
