You may wonder if it’s time to upgrade your HVAC unit and take advantage of tax savings and rebates. The 2022 Inflation Reduction Act, signed in August, includes new incentives designed to promote energy efficiency and reduce the country’s reliance on fossil fuels. Ernst Heating & Cooling, your Metro East heating, and cooling expert, is here to help you navigate the new law and help you choose the best option for your home, family, and budget.
Rebates and tax credits
The High-Efficiency Electric Home Rebate Act (HEEHRA) will offer rebates to lower and middle-income households who opt to add electric appliances like heat pumps or electric water heaters. Heat pumps replace the traditional gas furnace and air conditioner compressor, combing heating and cooling functions into one purchase. The act includes several opportunities for saving money on home comfort system upgrades.
HEERA will award rebates depending on your household income. If your income is 80% below your area’s median income, you will be eligible for a 100% rebate, up to $8000. If your household income is between 81% and 150% of the area’s median income, you are eligible for up to 50% of the heat pump’s cost. Even if your income is above the 150% threshold, you may still qualify for a 30% tax credit, up to $2,000, when you purchase a heat pump. These rebates will be administered by state governments and are expected to go into effect in 2023. However, if your old furnace has gone on a permanent fall break and you must replace it now, you may still be able to receive a $300 tax credit on a high-efficiency heat pump.
Previously, homeowners could claim an Energy Efficient Home Improvement Credit for up to 30% of the cost of energy upgrades. The new law means homeowners can claim a credit of up to $1,200 annually. If you have the luxury of time, you can receive a tax credit for a new heat pump one year and a credit for energy-efficient windows in the next year, for instance.
Timing your purchase
Maybe you’re considering replacing your current HVAC system and possibly waiting until 2023 to start the project. Keep in mind, though, that equipment costs are predicted to rise next year. Due to the newly required specifications, equipment prices are anticipated to increase by 20-35%, eating into those savings. It may be financially prudent to purchase an upgrade and take advantage of the energy savings currently accompanying a new unit. Ernst Heating & Cooling often offers monthly specials and other incentives for new systems. You can see what’s now offered here.
At Ernst Heating & Cooling, we want to ensure you get the most for your money. Call us at 618.217.1836 or schedule an online appointment. We’ll answer your questions and help you choose the best home comfort options for your Metro East home.