OBBBA and the Next Chapter of Heat Pump Commercialization

When the One Big Beautiful Bill Act (OBBBA) passed this summer, it drew attention for repealing popular federal tax credits such as Section 25C and 45L. For many in the building community, this raised questions about whether heat pump adoption would stall without those incentives.

The reality is different: The OBBBA is accelerating a shift toward retrofit-ready, installation-friendly systems that builders can leverage to control costs and expand opportunities.

Why Retrofits Are the New Battleground

With fewer federal incentives, home owners are prioritizing affordability and minimal disruption when upgrading. Systems that avoid service panel upgrades, structural modifications, or extended installation timelines are gaining traction.

For builders and remodelers, this means demand is shifting to products that slot directly into existing housing stock.

Midea — a member of the NAHB Leading Suppliers Council — anticipated this market evolution with its EVOX G3 air handler, available in both 115V and 208–230V configurations. The modular design allows a direct replacement for gas furnaces without rewiring, saving hours of labor and avoiding costly panel upgrades.

For multifamily retrofits and public housing, Midea’s Packaged Window Heat Pump (PWHP) offers an even faster option, often installing in under an hour without refrigerant lines or drain piping.

State and Utility Programs Take the Lead

While federal incentives have contracted, state and utility programs remain robust. Rebates of up to $10,000 per system are still available in key markets like New York, Massachusetts, Oregon and Vermont.

For builders, fluency in these programs is now essential to close projects and maintain affordability for clients. Midea designs its systems to meet ENERGY STAR Most Efficient and CEE Advanced Tier standards, ensuring broad eligibility across regional programs.

Technical Advances Builders Can Rely On

Cold-climate readiness has eliminated one of the last barriers to broad adoption. Midea’s EVOX All Climate heat pump delivers up to 100% heating output down to -31°F and continuous operation down to -40°F, making it viable across every North American climate zone.

These systems also integrate smart features, including over-the-air software updates and compatibility with demand response programs, aligning with utility incentives while giving builders a path to future-ready installations.

Policy Shifts That Benefit Builders

Beyond incentives, the OBBBA included provisions directly relevant to the building community. Expanding 529 plan eligibility to cover vocational training creates a stronger pipeline of skilled HVAC labor, addressing one of the industry’s biggest bottlenecks.

The permanent extension of the qualified business income deduction under Section 199A also provides financial stability for builders and remodelers, freeing up capital to reinvest in workforce and project capacity.

A New Landscape for Heat Pump Adoption

Rather than slowing progress, the OBBBA is sharpening focus on affordability, retrofit viability and labor efficiency, all priorities for the building industry. For NAHB members, this moment represents a new phase of opportunity. Builders who understand rebate pathways, adopt retrofit-ready products and prepare their teams for next-generation systems will be well-positioned to lead in a changing market.

Midea’s role is to provide the technology foundation for that transition. With modular designs, plug-and-play retrofit options and performance proven in both single-family and multifamily housing, Midea systems are engineered to help builders deliver comfort, efficiency and cost savings to customers in every region.

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This article was written by David Rames, senior product manager at Midea. It was published on NAHBNow as a benefit of membership in the NAHB Leading Suppliers Council.

Disclosure: This information is provided for general guidance only and does not constitute legal, tax, accounting, investment, or professional advice. It should not be used as a substitute for consultation with qualified advisers who are knowledgeable of your specific circumstances. Nothing herein is intended or may be used to avoid tax penalties.