HVAC systems are crucial, providing heating and cooling in all seasons. However, they can also be one of the biggest energy consumers in a home. Transitioning to a more energy-efficient HVAC system presents an opportunity for homeowners to cut costs on energy expenses while lessening their ecological footprint.
Luckily, many government incentives are available to help homeowners offset the cost of upgrading their HVAC systems. These financial incentives include tax credits, rebates, low-interest loans, and even property tax breaks.
This article explores various government incentives to promote energy-efficient HVAC systems, offering guidance on locating and applying for them. Additionally, it provides advice on selecting an energy-efficient HVAC system and implementing strategies to reduce energy expenses following an upgrade.
Federal Tax Credits
Among the widely favored government incentives for energy-efficient HVAC systems lies the Energy Efficient Home Improvement Tax Credit. Through this provision, homeowners can deduct up to 30% of the costs of specific energy-efficient upgrades from their federal income taxes. The maximum allowable amount for this tax credit is $1,200 per year.
To qualify for the Energy Efficient Home Improvement Tax Credit, the HVAC system must meet specific energy efficiency standards. These standards are set by the Energy Star program, which is a joint program of the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Energy (DOE).
Homeowners embarking on HVAC system upgrades may qualify for another federal tax credit, the High-Efficiency Electric Home Rebate Program. This initiative provides rebates for acquiring and installing specific high-efficiency electric appliances, such as heat pumps, air conditioners, and water heaters.
The rebate amount depends on the specific appliance being purchased and installed. For example, homeowners can receive a rebate of up to $300 to buy and install a qualified heat pump.
State and Local Incentives
In addition to federal tax credits, many states and local governments also offer incentives for energy-efficient HVAC systems. These incentives can vary widely from state to state and from locality to locality.
Some of the most common state and local incentives for energy-efficient HVAC systems include:
- Rebates from utility companies
- Low-interest loans
- Property tax breaks
To explore the state and local incentives available in your region, contact your local utility provider or your state’s energy office. You can also conduct an online search for incentives using the Database of State Incentives for Renewables & Efficiency (DSIRE).
How to Find and Apply for Government Incentives
After pinpointing the government incentives accessible in your vicinity, you can initiate the application process. The steps for applying may differ depending on the particular incentive program. Nonetheless, there are some overarching steps you can adhere to:
- Gather the required documentation. These documents can include proof of purchase and installation of your new HVAC system and energy efficiency ratings.
- Complete the application form, which can be found on the website of the government agency or utility company offering the incentive.
- Submit the application form and any required documentation.
Tips for Choosing an Energy-Efficient HVAC System
Several considerations come into play when selecting an energy-efficient HVAC system. The size of your residence holds significance, as an undersized system will struggle to regulate temperature effectively, whereas an oversized one will be inefficient and lead to energy wastage. Your local climate is also pivotal, as varying climates demand different HVAC system types.
Another crucial aspect to contemplate is the energy efficiency rating of the system. This rating is determined using SEER (Seasonal Energy Efficiency Ratio) for cooling systems and HSPF (Heating Seasonal Performance Factor) for heating systems. A higher SEER or HSPF rating indicates superior efficiency of the system.
Last but not least, the system’s cost warrants consideration. While energy-efficient HVAC systems may entail higher upfront costs for purchase and installation compared to less efficient counterparts, they promise long-term savings on energy expenses.
Collaborating with a certified HVAC contractor is essential to guarantee the proper installation and sizing of your new system for your residence. A qualified contractor can assist you in selecting the suitable system according to your requirements and financial constraints and ensure its accurate installation.
How to Save Money on Your Energy Bills After Upgrading Your HVAC System
Once you have upgraded to a more energy-efficient HVAC system, there are several things you can do to save even more money on your energy bills:
- Set your thermostat to the appropriate temperature. By setting your thermostat back 7-10 degrees Fahrenheit for 8 hours a day, you can save up to 10% on your energy bills.
- Use a programmable thermostat. A programmable thermostat can automatically adjust your home’s temperature throughout the day, saving you money on your energy bills.
- Change your air filter regularly. A dirty air filter can reduce the airflow to your HVAC system, making it work harder and using more energy.
- Seal air leaks around your windows and doors. Air leaks can allow conditioned air to escape from your home, making your HVAC system work harder and use more energy.
At Larry Cook Heating & Cooling, we’re here to assist you in selecting an eligible HVAC unit that meets the criteria for tax credits and rebate programs. Moreover, we’ll ensure its proper installation, adhering to all pertinent local building codes.
Resources
Database of State Incentives for Renewables & Efficiency (DSIRE)
Energy Star
U.S. Department of Energy
U.S. Environmental Protection Agency
