Upgrading your home’s cooling and/or heating always requires a fairly major investment. No matter what type of unit you want to install, you’re always looking at spending at least a few thousand dollars. If you’re installing a larger, high-efficiency model, you could end up spending well over $10,000. The good news is that all of the following tax credit and rebate programs can help you save some fairly substantial money on your HVAC installation.
HVAC Installation Federal Tax Credits
The 2022 Inflation Reduction Act authorized the US Department of Energy to establish new tax credits that are now available to homeowners who upgrade to certain high-efficiency cooling and heating units. This program started in 2023, and the tax credits will continue to be available through the end of 2032. The program is currently planned to continue for several years after that, but the value of the credits will decrease year by year starting in 2033.
The biggest push is to incentivize homeowners to electrify their HVAC units, which means switching from natural gas to electricity. That’s why installing a central heat pump or ductless mini-split that meets the program’s energy efficiency requirements allows you to earn a tax credit of up to $2,000. Installing a high-efficiency natural gas furnace or traditional central or ductless air conditioner allows you to earn a credit of up to $600. That means you’d be eligible for a credit of up to $1,200 if you replace your furnace and air conditioner. The only thing to note is that not everyone will earn the full amount since the credits are capped at a maximum of 30% of the total purchase and installation cost. To be eligible, the new unit has to be ENERGY STAR-certified and installed by a licensed HVAC company.
California State HVAC Rebate Programs
In addition to the federal tax credits, California also has several rebate programs that can help you save even more money on your HVAC installation. For instance, the TECH Clean California program offers a $1,000 rebate that’s available for installing a new heat pump system in a single-family home. If you have a larger house and need to install two heat pump systems, you can be eligible for a $2,000 rebate. However, this rebate is only available if you’re switching from a non-heat pump system, such as a gas furnace to a heat pump. The new system must also be installed by a TECH-enrolled contractor and meet Title 24 code requirements.
The Comfortably CA program offers a similar rebate if you’re replacing your existing central air conditioner and gas furnace with a split system or packaged heat pump. In this case, you can get a rebate of $100 or more per ton. That means a 5-ton heat pump would be eligible for at least a $500 rebate. To qualify, your new heat pump must meet certain eligibility requirements and have at least a certain energy efficiency rating. This rebate is only available to homeowners who receive their electricity service from PG&E, SCE, or SDG&E.
In addition, the Golden State Rebates program offers a rebate worth between $40 and $75 for installing an ENERGY STAR-certified smart thermostat in a single-family or multi-family dwelling. However, this rebate is only available if you’re replacing an old, non-smart thermostat with a smart unit.
Other Rebates, Incentives, and Financial Assistance Programs
Many utility companies have their own rebate programs available for customers who install a new heat pump. These rebates vary from company to company and can be worth anywhere from a few hundred dollars to up to $2,000. Each company has specific requirements on who can quality and what types of equipment are eligible, so it’s important to check with your utility provider.
Low-income families in San Bernardino County can also apply for no-cost home weatherization services through the Community Action Partnership of San Bernardino County. This program covers a wide range of home weatherization projects, including installing new cooling and heating units as well as various other appliances.
The Inflation Reduction Act also created two new rebate programs for low-income and middle-income families that upgrade their HVAC system or make certain other upgrades to improve their home’s energy efficiency. These programs can potentially cover the entire cost of installing a new heat pump. Unfortunately, California is one of many states still waiting for approval to begin distributing these rebates, so the programs likely won’t start until late 2024 or sometime in 2025.
If you’re looking to upgrade your home’s cooling and/or heating system, Of Course! Heating and Cooling can help you navigate the various incentives available to ensure you get the most you can. We offer a wide range of qualifying heat pumps, air conditioners, and furnaces from some of the top brands in the industry. You can also turn to us if you need any HVAC repairs or maintenance in Yucaipa, CA or the surrounding areas. Our team can assist with your electrical and indoor air quality needs as well. If you’re looking to replace any HVAC unit, give us a call today. Our team will help you choose the best option for your home.
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