Have you been thinking about getting a new heating and cooling system? Great news – there’s never been a better time to modernize!
Why? Because the Inflation Reduction Act of 2022 (IRA) can help you get thousands of dollars back for installing HVAC systems that meet their high-efficiency standards.
The financial rewards come in the form of point-of-sale rebates and tax credits, and are designed to encourage more people to switch to all-electric heating and cooling equipment that will reduce energy consumption and result in lower utility bills.
Purchasing and installing high-efficiency HVAC equipment combined with where you are located will determine what you are eligible to receive. The chart on this page can help you understand those requirements. Call us to go over which eligible IRA products are the best fit for you and your home.
One of the features of the Act is that it amends and extends numerous existing incentives, as well as creating new ones
Energy Efficient Home Improvement Credit (25C)
This part of the Act raises the tax credit for products on the highest efficiency tier from 10 percent of installed costs all the way up to 30 percent. In 2033, the percentage drops to 26 percent, and in 2034 to 22 percent.
For eligible furnaces and AC units, this can result in a credit of up to $600.
For eligible heat pumps, that credit can jump up to $2,000.
Also, the existing heat pump credits of up to $300 are retroactive for any equipment that began operating after 12/31/21.
Homeowners installing high-efficiency equipment may be eligible for a rebate of up to $8,000 depending on IRS income requirements and modeled energy savings. Additionally, under the update, qualified home energy audits now count as eligible improvements and can earn you up to a $150 tax credit.
After your state applies for funding and sets up its program, you can become eligible for rebates (based on your income) for:
All-electric ENERGY STAR heat pumps - up to $8,000
Air sealing, insulation, and ventilation - up to $1,600
Electric wiring - up to $2,500
Electric Load Service Center - up to $4,000
Households are allowed a maximum rebate of $14,000
Note that it is not possible to combine the HOMES Rebate Program and the High-Efficiency Electric Home Rebate Program.
Besides these national programs, many areas also offer their own rebate programs. Research what local savings may be available to you.
Many dealers utilize monthly payment plans that can be designed to fit your budget. Unsure if you qualify? Speak with a tax professional.
There are many reasons to upgrade to an all-electric heat pump: