HVAC installations are always fairly expensive. No matter what type of system you’re installing and what option you choose, you’re always looking at spending at least a few thousand dollars. Luckily, there are a variety of incentives available in the form of tax credits and rebates that may help you save some money on your new air conditioner, furnace, heat pump or ductless mini-split.
Federal Tax Credits for New HVAC Systems
Installing a high-efficiency, ENERGY STAR-rated central air conditioner, furnace, central heat pump or ductless mini-split system automatically makes you eligible to receive a credit that you can use to offset what you owe on your next year’s federal income taxes. The program is known as the Energy Efficient Home Improvement Credit and was created as part of the 2022 Inflation Reduction Act in an effort to incentivize homeowners to upgrade to a more energy-efficient air conditioning and/or heating system. This program started in 2023 and is scheduled to continue in its current form until the end of 2032. After that point, the tax credits will still be available for several years more, but the total amount you can earn will start decreasing year-by-year from 2033 onward.
There are two different categories of tax credits that cover different types of HVAC units. Gas furnaces, central air conditioners and ductless mini-split air conditioners fall into the first category and qualify for a credit worth up to $600 each. That means you can earn a credit of up to $1,200 if you install a new furnace and air conditioner in the same year. This category also covers other upgrades that improve the energy efficiency of a home, including replacing windows, skylights and exterior doors. While there is no lifetime cap on the total amount of credit you can earn while the program is active, you are limited to a maximum credit of $1,200 in a single year. So, you may want to spread other upgrades out over more than one year to earn as much as possible.
Central heat pumps, ductless mini-split heat pumps, biomass stoves and biomass boilers fall into the second category and qualify for a credit of up to $2,000. Electric heat pump water heaters are also in this category and eligible for the same credit. The maximum credit in one year is $2,000.
The one thing to note about all the credits is that they are capped at a maximum of 30% of the total purchase and installation cost. That means you may not necessarily be eligible for the full amount depending on the total installation cost. You are also eligible only if the installation was performed by a licensed HVAC company. When filing your taxes and applying for the credit, you will usually need to submit documentation showing who performed the installation, how much the total cost was and that the new unit meets the minimum energy-efficiency requirements to qualify. The credits are available only when replacing the HVAC unit in an existing single-family home and only for your primary residence.
Georgia Home Energy Rebate Programs
The Inflation Reduction Act also created two new point-of-sale rebate programs, and the federal government will allocate funds for these programs on a per capita basis to each state that enrolls in the programs. The Georgia Environmental Finance Authority applied for enrollment in both programs and expects to be approved by the Department of Energy later in 2024. However, the rebates won’t be available until early 2025. In terms of HVAC, these rebates are available only when you purchase a new electric heat pump, and only low- and middle-income families are eligible under the programs.
Utility Rebate Programs
Many utility companies also have rebate programs available to their customers who install certain types of HVAC units. Each company has its own specific qualifying requirements and offers different rebate amounts. The programs are also always subject to change, so it is important to check with your utility provider to see what types of rebates they may offer.
DNA Heating & Air is a proudly veteran-owned company offering expert HVAC installation, repairs and maintenance in Columbus, GA and the nearby areas. We offer a range of new HVAC units and can help ensure that whatever unit you choose qualifies for the various incentive programs. We also offer financing for HVAC installations on approved credit. If you’re looking to replace or upgrade your home’s HVAC, contact us today to learn more about all your available options.
