Section 25C, before the act, provided a 10% credit for installation of efficient doors, windows, insulation, heat pump, air conditioner or furnace, with an annual and lifetime cap of $500. The credit expired at the end of 2021.
The act modifies section 25C as follows:
1. the credit percentage is increased to 30%
2. the credit is extended to 2032.
3. The lifetime cap is removed.
4. There is an annual cap of $1200, with individual caps of $600 for windows, $500 for doors, and $600 for energy efficient "property" (which generally includes furnaces, hot water heaters and air conditioners.
5. Regardless of the $1200 annual cap and $600 cap for "property", there is a separate $2000 cap for a heat pump, heat pump hot water heater, or biomass stoves and boilers.
6. The definition for efficiency for a heat pump to qualify has been changed to
"which meet or exceed the highest efficiency tier (not including any advanced tier) established by the Consortium for Energy Efficiency which is in effect as of the beginning of the calendar year in which the property is placed in service."
There are a number of other changes that are not relavant to your question.
[Edited to correct]
So to your question, installation of a qualified heat pump in 2022 is eligible for a credit of 30% of the cost (including installation), up to a maximum of $2000, assuming it meets the required efficiency standard.
The law specifies that the changes take effect in 2023. Property placed in service in 2022 only receives a 10% credit with a lifetime cap of $500. The enhanced 30% credit and higher caps take effect for property placed in service after December 31, 2022.
