Virginia Water Heater Rebates and Tax Credits in 2025: What Homeowners Need to Know Under the New Administration

At the federal level, one of the most impactful incentives that remains in effect is the Energy Efficient Home Improvement Credit, which allows homeowners to claim 30% of the cost of qualifying energy-efficient improvements, up to $3,200 annually. This includes high-efficiency electric and heat pump water heaters. This credit was a cornerstone of the Inflation Reduction Act and, due to its widespread bipartisan support and long-term implementation window (2023–2032), has survived initial efforts at repeal. In addition, the Residential Clean Energy Credit continues to offer a 30% credit on renewable systems like solar water heaters, a significant incentive for households pursuing long-term energy independence and sustainability.

Meanwhile, at the state level, Virginia’s Department of Energy is preparing to launch Home Energy Rebate programs that will provide up to $1,750 in savings for ENERGY STAR-certified heat pump water heaters. However, these programs are currently awaiting final guidance from the U.S. Department of Energy and are not yet active as of April 2025. Utility-based programs continue to provide reliable, albeit smaller, incentives: Washington Gas offers rebates up to $400 for qualifying units; Virginia Natural Gas provides between $70 and $200 depending on model efficiency; and Columbia Gas of Virginia offers varying rebates for energy-efficient natural gas models, provided applications are submitted within 120 days of installation or by January 31, 2026.

What makes this year especially important is the unpredictability of how federal policy under the new administration will affect future funding for state and local rebate initiatives. President Trump’s renewed emphasis on deregulation and fossil fuel development has placed certain clean energy subsidies under scrutiny. While core tax credits are protected by legislation and cannot be unilaterally repealed, administrative measures can delay implementation, limit funding, or restrict eligibility—making it wise for homeowners to take action while the full benefits are still accessible.