Thinking about upgrading to a high-efficiency HVAC system in the future? We have good news: your equipment may be eligible for a tax credit or rebate through the Inflation Reduction Act (IRA)!
Signed into law in August 2022, part of the $740 billion bill offers incentives for citizens to make eco-friendly upgrades to their homes. This means you can install high-efficiency heat pumps, water heaters, and other appliances at a more affordable price!
As a company that specializes in home heating, cooling, and plumbing, our goal at Bears Home Solutions is to raise awareness of the rewards available to you and to help you find the best eligible equipment for your home, if you choose to take advantage of these benefits.
Keep reading to learn how upgrading to a greener HVAC system could help you save money in coming years.
Overview of the IRA
A major objective of the Inflation Reduction Act is to reduce our country’s carbon footprint. A lot of the bill applies to the industrial sector. However, there are incentives for individuals who transition to electric HVAC systems and other appliances in their homes.
The bill helps reduce the installation cost of eco-friendly equipment through tax credits and rebates. This means more Americans can afford energy-efficient HVAC systems that provide increased comfort and less expensive energy bills.
The main tax credit relevant to you is the Energy Efficient Home Improvement Tax Credit (25C). As of January 2023, homeowners can deduct up to 30% of installation and labor costs for eligible home improvements. Americans of all income levels can use the credit every year until 2032.
The 25C credit has an annual cap of $1,200 (including up to $600 for a qualified air conditioner or gas furnace) for weatherization, branch circuits, or other upgrades. Homeowners who install a qualified heat pump, heat pump water heater, or boiler can receive up to $2,000.
The Inflation Reduction Act also provides $4.5 billion in rebates that enable low- and moderate-income households to electrify their homes. For low-income households, this rebate would cover 100% of a heat pump installation up to $8,000 and a heat pump water heater up to $1,750. Rebates for median-income households would cover 50% of these costs.
There are many other rebates available through the Inflation Reduction Act. Use this IRA Savings Calculator to learn more and see if you qualify.
Why the Heat Pump Hype?
You may be wondering why there’s a higher incentive for installing a heat pump for your home. That’s because heat pumps are 3 – 5 times more energy-efficient than traditional heating and cooling equipment. It’s a single electric appliance that can replace both your traditional AC and your furnace or boiler. We’ll help you determine which heat pump (if any) will work best for your home.
Questions? We Can Help
This blog only covers the basics of tax credits and rebates available to you through the Inflation Reduction Act. There are many more incentives outlined in the bill that may apply to you. Our team at Bears Home Solutions is here to help you get the tax credits you deserve.
Set up an appointment with one of our Comfort Advisors today to discuss details of these incentives and determine the best eligible equipment for your needs!
*Distribution of rebates will likely begin in the middle of 2023. Each state will roll out rebates differently. Contact our team at Bears Home Solutions for details.