If you’re thinking about a HVAC replacement or energy-efficient upgrade to your HVAC equipment, your timing couldn’t be better. Not only have new standards of efficiency come into effect for 2023 along with the new SEER2 rating standards, there are incentives available. Some are in the form of tax credits, some are low-income linked, and others are distributed through state rebate programs. January 1, 2023 was the starting point, though state-based programs will take some time to get rolling.
The IRA Big Picture
The Inflation Reduction Act of 2022 is a $737 billion dollar piece of federal legislation. It allocates about $370 billion for climate change initiatives including energy efficiency incentives, especially for homeowners. Everything from home energy audits to HVAC upgrades, power panel capacity improvements and appliance replacement are covered. An epa.gov announcement covers the many ways that the IRA, as it is known, is intended to make a big difference in our future.
Get Informed Now to Make Good Choices in the Coming Years
Whether you’re just thinking about your next steps as your HVAC equipment ages, or you’re writing up a plan, now’s a good time to get informed. These funds can affect choices about your home’s comfort and your family’s budget in many ways. Now, and in the future, being on track with energy efficiency and its grid and global impact can pay off for you in significant savings.
Updating Your HVAC Equipment and Beyond, Now and in the Next Decade
Listed as non-business energy tax credits, these incentives cover many EnergyStar certified systems, from heat pumps and air conditioners to boilers and furnaces, and many emerging technology solutions. We’ll focus on HVAC equipment here, but it’s worth a look for homeowners interested in investing in other energy-efficient and all-electric solutions.
Start with a Home Energy Audit
The IRA wisely addresses the root of energy efficiency, and provides for home energy audits that help reduce the energy consumption required to heat and cool your home. This and other provisions are generally available through 2032. The credit for this service is 30% of costs, up to $150.
Annual Limits Can Guide Your Planning
Annual aggregate limits make it wise to take advantage of the $3,200 maximum efficiency tax credit each year in stages. Up to $1,200 can be for “home envelope improvements” such as improved windows, doors, skylights, insulation, and electrical, based on 30% of installed costs.
Up to $600 is allowed for qualified boilers, furnaces, and central AC.
Another $2,000 of the maximum amount is allocated for heat pumps, heat pump water heaters, and biomass stoves and boilers. These are for existing U.S. homes, credited to the owner of the principal residence.
It’s not just for conventional homes, also: mobile homes, co-op apartments, condos, manufactured homes, even houseboats can also be eligible. This is a great opportunity for creative solutions such as mini-split heat pump systems!
A Starting Point for Using Incentives
The EPA suggests starting by tending to attic insulation and similar ways to reduce the “heating and cooling load” and sizing of new HVAC equipment. They then suggest you combine HVAC equipment upgrades with other items annually for several years to maximize your tax credit benefits.
Coming Soon: State Rebates
Part of this enormous package is state rebate funds that may take some time for state bureaucracies to make available. Your HVAC contractor can help you organize your thoughts, review covered equipment and financial plans, and pull it all together. They’ll also be well-informed when states are ready to proceed, so you can time your installations and services perfectly.
What About 2022 Installations?
If your home has equipment that’s coming up for renewal at 10 or 15 years old, you may have already begun replacing or upgrading. There are credits of $500 or $300 available for certain equipment installed in 2022, including HVAC, water heaters, air circulating fans, and more.
Let’s Talk About Your Plan
At Northwest HVAC Heating & Cooling, we’re always here to help make your HVAC upgrades more budget-friendly. Our team has gotten up to date on the IRA provisions and opportunities. We can help you organize, plan, prioritize, and take action for future energy savings, and budget savings now. Give us a call today, and we’ll help you fit this important opportunity into your plans!