It's a fair question, especially after 2026: the federal heat pump tax credit is gone, battery costs have fallen 2–3x in three years, and solar keeps getting cheaper every year it's tracked. If the technology curve is bending down that fast, do rebates even matter anymore — or are they a temporary bridge we're about to age out of?
Short answer: costs are falling faster than almost anyone expected, but the curve doesn't bend far enough, fast enough, to make rebates optional for most homeowners in the next five years. Here's the actual math behind that.
What's genuinely getting cheaper
- Battery storage: average grid-scale battery costs are now more than 2x lower than two years ago and 3x lower than three years ago. Sodium-ion batteries reach residential markets by late 2027, and solid-state batteries follow in 2028–2029 — both cheaper and safer chemistries than today's lithium-ion.
- Solar: panel and inverter costs have been on a multi-decade downward curve, and 2027 is the year solar PV generation is projected to overtake wind globally — a scale signal that usually correlates with further cost drops.
- Heat pumps: cold-climate performance keeps improving while manufacturing costs edge down, which is part of why California can credibly target 6 million installed heat pumps by 2030 without leaning as hard on subsidy per unit.
So why doesn't the gap close?
Because the thing getting cheaper is the equipment — and equipment is only part of an installed system's cost. Labour, electrical panel upgrades, permitting, and the removal of old systems don't follow the same curve. A heat pump unit might get 15% cheaper over five years while the total installed job barely moves.
The part of the cost that isn't shrinking
Installed cost = equipment + labour + site work. Equipment is the only line item on a steep downward curve. Skilled electrician and HVAC labour costs have been rising, not falling, in most of Canada and the US. Many homes still need panel upgrades or duct modifications regardless of how cheap the heat pump itself gets. That's the structural reason a $4,000 CleanBC rebate or a state HEEHRA grant still closes a real gap today, and will keep closing a meaningful (if shrinking) gap through 2030.
The bigger shift: incentives are moving, not disappearing
What actually happened in 2026 wasn't "rebates stopped mattering" — it's that the federal layer thinned out (the 25C heat pump credit expired; geothermal kept its 30% credit through 2032) while state, provincial and utility programs kept going or grew to fill the gap. States and utilities collectively spend about $9 billion a year on efficiency incentives — the problem isn't that the money dried up, it's that only 0.5–3% of eligible households actually claim it, because the programs are scattered across dozens of separate portals, income tests, and application windows.
The real risk over the next 5 years
It's not that rebates disappear. It's that they get harder to find as they fragment further across states, provinces and utilities, and more households leave real money on the table simply because they didn't know a program existed. Falling tech costs make the gap smaller; rebate fragmentation makes it harder to close what's left.
What this means if you're deciding now
- Don't wait for prices to drop enough to skip rebates. On current trend lines, that point doesn't arrive by 2030 for most homeowners — and rebates you skip today usually aren't retroactive.
- Battery storage is the technology to watch. It's falling in cost the fastest of the three, and by 2030 integrated home battery storage is expected to be standard in new-build homes rather than an expensive add-on.
- Expect the incentive landscape to keep moving province-to-province and state-to-state. What closed federally in 2026 often reopened, renamed, at the state or provincial level within the same year — see our Greener Homes Grant breakdown for exactly that pattern.
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Check my rebates →The takeaway
Technology is doing real work to close the affordability gap — batteries especially. But labour and site costs aren't falling at the same rate, so the gap rebates fill today will still exist, just smaller, through at least 2030. The practical move isn't waiting for tech to make rebates unnecessary; it's using both at once while the incentives are still open. Read next: what the average home actually looks like by 2030 if these trends hold. And if you've already installed, help make these estimates less theoretical — tell us what you actually paid.
Sources: RMI — The Energy Transition in 2026; IEA — Electricity 2026; Federal HVAC Tax Credits 2026; RMI — Reforming Energy Efficiency Programs.