Sec. 209. Manufacturer credit for high-efficiency heat pumps and heat pump water heaters
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The Internal Revenue Code of 1986 is further amended by adding after section 45V (as added by this Act) the following new section: For purposes of section 38, the energy efficient heat pump credit determined under this section for any taxable year is an amount equal to the sum of the credit amounts determined under paragraph
(2)for each type of qualified energy efficient heat pump produced by the taxpayer during the calendar year ending with or within the taxable year. The credit amount determined for any type of qualified energy efficient appliance is— the applicable amount determined under subsection
(b)with respect to such type, multiplied by the eligible production for such type under subsection (c). For purposes of subsection (a): The applicable amount is $600 in the case of a consumer heat pump water heater that is manufactured in calendar years 2022 through 2030 and that has a Uniform Energy Factor of 3.3 or more for electric water heaters and 1.3 or more for gas water heaters. The applicable amount is $600 in the case of a commercial heat pump water heater manufactured in calendar years 2022 through 2030 and that has a Coefficient of Performance of 3.0 or more for electric water heaters and 1.3 or more for gas water heaters. The applicable amount is $800 in the case of a consumer unitary heat pump that— is manufactured in calendar years 2022 through 2030, in the case of an electric heat pump meets either— the most recent requirements of the Energy Star Most Efficient Specification promulgated by the United States Environmental Protection Agency before the date of enactment of this section, or the most recent Cold Climate Air-Source Heat Pump Specification promulgated by Northeast Energy Efficiency Partnerships before the date of enactment of this section, and in the case of a gas heat pump, has an Annual Fuel Utilization Efficiency of 140 percent or more. The applicable amount is $24 per thousand British Thermal Units of heating capacity measured at a 17 degree Fahrenheit ambient temperature in the case of a commercial heat pump that is manufactured in calendar years 2022 through 2030 and that has a Coefficient of Performance of 2.3 or more at a 17 degree F ambient temperature for electric heat pumps, and 1.2 or more at a 17 degree F ambient temperature for gas heat pumps. The applicable amount is $36 per thousand British Thermal Units of heating capacity for heat pumps with a heating capacity of 2,400 thousand British Thermal Units or less and $18 per thousand British Thermal Units of heating capacity for heat pumps with a heating capacity above 2,400 thousand British Thermal Units in the case of an industrial heat pump that is manufactured and installed in an industrial facility in calendar years 2022 through 2030 and that has a Coefficient of Performance of 2.0 or more. The eligible production in a calendar year with respect to each type of energy efficient heat pump is— the number of heat pumps of such type that are produced by the taxpayer in the United States during such calendar year, less the average number of heat pumps of such type that were produced by the taxpayer (or any predecessor) in the United States during the preceding 2-calendar year period. For purposes of this section, the types of energy efficient heat pumps are— consumer heat pump water heaters described in subsection (b)(1), commercial heat pump water heaters described in subsection (b)(2), consumer unitary heat pumps described in subsection (b)(3), commercial heat pumps described in subsection (b)(4), and industrial heat pumps described in subsection (b)(5). The aggregate amount of credit allowed under subsection
(a)with respect to a taxpayer for any taxable year shall not exceed $250,000,000, reduced by the amount of the credit allowed under subsection
(a)to the taxpayer (or any predecessor) for all prior taxable years beginning after December 31, 2021. The credit allowed under subsection
(a)with respect to a taxpayer for the taxable year shall not exceed an amount equal to 4 percent of the average annual gross receipts of the taxpayer for the 3 taxable years preceding the taxable year in which the credit is determined. For purposes of this subsection, the rules of paragraphs
(2)and
(3)of section 448(c) shall apply. No later than December 31, 2022, and every two years thereafter, the Secretary, in consultation with the Secretary of Energy, shall review the efficiency levels in section
(b)and revise these levels upward if necessary to include only the most efficient commercially available heat pumps of each type, while ensuring that at least three manufacturers are represented in each type across a range of product heating capacities. The Department of Energy shall develop test procedures to determine Coefficient of Performance for— gas commercial heat pump water heaters, gas commercial heat pumps, and industrial heat pumps. Such test procedures shall build upon the foundation of relevant current American National Standard Institute and International Organization of Standard test procedures. For purposes of this section: The term qualified energy efficient heat pump means— any consumer heat pump water heater described in subsection (b)(1), any commercial heat pump water heater described in subsection (b)(2), any consumer unitary heat pump described in subsection (b)(3), any commercial heat pump described in subsection (b)(4), and any industrial heat pump described in subsection (b)(5). The term consumer heat pump water heater means a water heater that uses a heat pump to heat water and has an electric input of 12 Kilowatt or less or a gas input of 75,000 British Thermal Units per hour or less, measured in accordance with applicable Department of Energy test procedures. The term commercial heat pump water heater means a water heater that uses a heat pump to heat water and has an electric input of more than 12 Kilowatt or a gas input of more than 75,000 British Thermal Units per hour, measured in accordance with applicable Department of Energy test procedures. The term consumer unitary heat pump means a heat pump designed to provide space heating and cooling with a cooling capacity of 65,000 British Thermal Units per hour or less, measured in accordance with the applicable Department of Energy test procedures. The term commercial heat pump means a heat pump designed to provide space heating and cooling with a cooling capacity of more than 65,000 British Thermal Units per hour, measured in accordance with the applicable Department of Energy test procedures. The term industrial heat pump means a heat pump that upgrades industrial waste heat to a higher temperature such that the delivered heat is produced and supplied to the facility more efficiently than conventional heating methods, such as a steam or electric resistance boiler. The term produced includes manufactured. The term Uniform Energy Factor is a metric used to measure the efficiency of consumer water heaters, with details specified in applicable Department of Energy test procedures. The term Coefficient of Performance means the ratio of heat output to energy input, with details specified in applicable Department of Energy test procedures. For gas commercial heat pump water heaters, until there is a Department of Energy test procedure, American National Standards Institute and American Society of Heating, Refrigerating and Air-Conditioning Engineers Standard 118.1 shall be used. For gas commercial heat pumps, until there is a Department of Energy test procedure, American National Standards Standard Z21.40.4 shall be used. For industrial heat pumps, until there is a Department of Energy test procedure, manufacturers may use their own tests, provided they publicly post the test conditions and assumptions they used in developing their stated Coefficient of Performance values. For purposes of this section: Rules similar to the rules of subsections (c), (d), and
(e)of section 52 shall apply. All persons treated as a single employer under subsection
(a)or
(b)of section 52 or subsection
(m)or
(o)of section 414 shall be treated as a single producer. For purposes of subparagraph (A), in applying subsections
(a)and
(b)of section 52 to this section, section 1563 shall be applied without regard to subsection (b)(2)(C) thereof. No amount shall be allowed as a credit under subsection
(a)with respect to which the taxpayer has not submitted such information or certification as the Secretary, in consultation with the Secretary of Energy, determines necessary. The requirement for production in the United States in section
(c)does not take effect until January 1, 2024. . The table of sections for subpart D of part IV of subchapter A of chapter 1 is further amended by adding after the item relating to section 45V the following new item: Sec. 45W. Manufacturer credit for high-efficiency heat pumps and heat pump water heaters. .