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IRA Tax Credits & Rebates for HVAC Upgrades and Heat Pumps

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The 2023 Inflation Reduction Act (IRA) offers tax credits and rebates that can help homeowners better afford to make energy-efficient upgrades. These upgrades can lower your home’s carbon footprint and help you to save money on heat pumps and other energy-efficient heating and cooling home upgrades.

When you replace your old, outdated, and inefficient heating and cooling systems and equipment, you can reduce the energy you’re using and save money in the long run, all while creating a cleaner and healthier indoor air environment.

The tax and rebate incentives provided by the IRA will help Central Florida homeowners:

  • save money on monthly energy bills
  • receive huge rebates and tax incentives
  • have a cleaner, healthier indoor air environment

The pros at Frank Gay Services can help you decide what options are best for you and your home. Give us a call at (407) 279-3270.

Tax Credits and Rebates for Heat Pumps and HVAC

Heat pumps are a more energy efficient way to heat and cool your home than a combination furnace and air conditioning system, since they use just one piece of equipment. If you have a combination furnace and air conditioning system, consider opting for a heat pump for your home.

The Inflation Reduction Act provides for tax credits that you can take advantage of when you make the change to an energy-efficient heat pump. Heat pumps also save the average American homeowner around $10,000 over 15 years.

The Inflation Reduction Act tax credits are an extension of the existing 25C tax credit. The IRA also includes rebates that can be applied to equipment and installation purchases. These rebates will be available toward the end of 2023.

See the chart below for information on tax credits you may be eligible for:

Energy-efficient Appliances that May Be Eligible for IRA Tax Credits

You may be eligible for tax credits on purchases and installation of certain qualifying hardware updates that make your home more energy efficient.

Heat Pumps

Heat pumps provide homeowners with an energy efficient alternative to a traditional two-unit air conditioner and furnace. Heat pumps are powered by electricity rather than natural gas and they transfer heat using refrigerant. Heat pump systems can have many advantages over two-unit air conditioner and furnace systems:

  • Saves space: Heat pump is one unit that provides both warm and cool air, So not only do you only have to purchase and one unit instead of two, but it also takes up less space.
  • Maintenance: Heat pumps only require a system check once a year. While this check can be done by the homeowner, we recommend having a professional HVAC tech from Frank Gay Services to do your inspection. Give us a call at (407) 279-3270.
  • Runs cleaner: Because heat pumps do not run on fossil fuels, no fumes are released into the air. This reduces your carbon footprint, which in turn helps the environment. There is also no need to purchases natural gas, whether propane or another fuel type, so you save money.

The HVAC experts at Frank Gay Services can help you out and get you the information you need to replace your current system with an energy-efficient heat pump. Get in touch at (407) 279-3270.

Air Conditioners and Furnaces

For some homes an air conditioner makes more sense than a heat pump. Today’s air conditioners are required to meet certain energy efficiency standards. They also use a new kind of coolant that does not emit ozone-depleting gases. These energy efficient units can reduce carbon pollution while helping you save money on your energy bill. The HVAC professionals at Frank Gay Services can recommend what works best for your home.

An energy-efficient furnace is a great upgrade that can save your household money as well.  The IRA tax credit can save you up to $600 on a furnace upgrade. Give Frank Gay Services a call at (407) 279-3270 to have a certified expert technician recommend what’s best for your home.

25C Tax Credits for HVAC and Heat Pumps

The Inflation Reduction Act extended some already existing tax credit and deduction programs.

The Energy Efficiency Home Improvement (25C) Tax Credit

The Energy Efficiency Home Improvement, or 25C, tax credit has been increased to cover 30% of the total cost of qualifying new energy efficient systems. All homeowners are eligible for this credit.

Scheduling a heat pump installation or HVAC upgrade with Frank Gay Services in 2023 means you will be able to deduct 30% of your total costs when filing your taxes next year. The deduction is capped at $3,200. If you install a heat pump, you can deduct up to $2,000 on your taxes.

NOTE: Frank Gay Services can advise you on the purchase and installation of HVAC equipment or heat pumps, but we cannot provide financial or tax advice. Please consult with a tax professional for questions about the 25C tax credit when filing.

Inflation Reduction Act Rebates for HVAC and Heat Pumps

The IRA also includes rebates for homeowners who want to purchase and install heat pumps or updated HVAC systems. These rebates will be available toward the end this year, depending on DOE and state guidelines and regulations.

The High-Efficiency Electric Home Rebate Act (HEEHRA)

The High-Efficiency Electric Home Rebate Act (HEEHRA) offers up to $14,000 per year in discounts on the purchase of equipment for electrical projects.

All Central Florida homeowners qualify for the HOMES Rebate, with higher rebate rates for low- and medium-income households. Rebates are provided based on the percentage of energy you save. This program is capped at $8,000 for low to middle income households earning less than 80% of area median income who cut energy use by 35%.

The Home Owner Managing Energy Savings (HOMES) Whole House Rebate

The HOMES rebate is a whole-home, performance-based rebate. You can save up to $8000 with the HOMES rebate when you make home upgrades that save 20%-35% more energy. This means the more energy you save, the more money you earn back in the form of a rebate!

All Central Florida homeowners qualify for the HOMES Rebate. Low- and medium-income households are eligible for higher amounts.

Contact Frank Gay Services today at (407) 279-3270 to schedule an appointment and learn how you can save money HVAC upgrades and have this rebate apply to you.

HEEHRA and HOMES Rebate Timelines

Like the HEERA Rebate program, funds for the HOMES Rebate will become available later in 2023. Department of Energy guidelines and state implementation will determine when these rebates become available to Central Florida homeowners. Individual states will determine if HEEHRA rebates will be retroactive. Low-income households will receive larger and more accessible up-front discounts from HEEHRA than the HOMES rebate.

NOTE: The HOMES rebate and the HEEHRA rebate can’t be combined, but homeowners may claim both the rebates and the Inflation Reduction Act tax credits.

Contact Frank Gay Services at (407) 279-3270 and schedule an appointment to learn how you can upgrade your house and save with the HEEHRA or HOMES rebates.

Inflation Reduction Act Quick Facts

  • You can save up to $3200 if you install a heat pump or energy efficient system in your home by using the Energy Efficiency Home Improvement 25C Tax Credit that went into effect on January 1, 2023. This tax credit will cover up to 30% of the total cost.
  • While not going into effect until the end of 2023, the HEEHRA Rebate allows middle- and low-income households to earn up to $14,000 in rebates for electrification home upgrades.
  • The HOMES Rebate is a whole-home, performance-based rebate. This means the more energy you save with certain home upgrades, the more money you receive back in rebates. You can get up to $8000 in rebates depending on your income level. The HOMES Rebate will go into effect at the end of 2023.

Have a Heat Pump, HVAC, or Inflation Reduction Act (IRA) Question?
Pioneer Heating and Air Conditioning Has the Answers!

Our trustworthy and professional experts are ready to answer your questions about the IRA rebates and tax incentives. They can guide you to the right choice for heat pumps, HVAC upgrades, and other options to heat and cool your home. Contact us here at Frank Gay Services today at (407) 279-3270  to get your questions answered, or to make an appointment for a home inspection or assessment.

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