New HVAC Tax Incentives and Rebate Programs

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Calendar showing date April 15 2020, 1040 form and calculator

Living in the Valley of the Sun, you know how vital it is to have an HVAC system running with the best air circulation for our excessively hot and dry Sonoran Desert climate. In terms of home energy efficiency, the Inflation Reduction Act of 2022 will be reshaping our home energy systems for decades to follow. The transition away from fossil fuels to clean energy is expanding the incentives for homeowners to transition quickly to new energy efficient air conditioners and heat pumps. By 2030, it’s expected the average taxpayer will save at least $1,000 a year in energy costs. What are the three major programs for homeowners?

The 25C Energy Efficiency Home Improvement Tax Credit

The Inflation Reduction Act of 2022 increased tax incentives to 30% of your total HVAC project cost. The 25C Energy Efficiency Home Improvement Tax Credit can only be used to offset your tax liability. This cap includes:

  • Up to $600 for a qualified air conditioner or gas furnace.
  • Up to $2,000 for electric and gas heat pumps, heat pump water heaters, and boilers.

There are no income requirements for this program, and it may be combined with other new federal energy programs such as HEEHR or HOMES. 

The High-Efficiency Electric Home Rebate Program (HEEHR)

This 10-year rebate program enables homeowners to switch over to electric home appliances and systems. It’s a point-of-sale rebate you’ll receive upon purchasing qualifying products. As part of the Inflation Reduction Act, the HEEHR program will cover new electrification projects and installation costs of 100% for low-income homeowners and up to 50% for moderate-income households. Qualifying products include:

  • HVAC electric heat pumps with a maximum rebate of $8,000.
  • Electric heat pump water heaters with a maximum rebate of $1,750.
  • Weatherization such as insulation, air sealing, and ventilation with a maximum rebate of $1,600.

The Home Energy Performance-Based Whole-House Rebate Program (HOMES)

The HOMES and HEEHR program implementations will be overseen by the state of Arizona’s energy office. The HOMES program is based on the overall performance of energy efficiency and electrification improvements in your house. The goal is to incentivize local companies doing these energy improvements to complete high-quality installations with maximum energy savings.

Cool Blew Is Ready

Ready for professional help with your home HVAC and weatherization projects? Call Cool Blew today at 623-872-2900. We’re your locally owned servicing and installation professionals serving the Valley of the Sun homeowners 24/7 including nights and holidays.