The January 2023 Inflation Reduction Act (IRA) offers tax credits and rebates that can help North County homeowners make energy-efficient upgrades. Save money on heat pumps and other energy-efficient heating and cooling home upgrades while you lower your carbon footprint!
The financial incentives included in the Inflation Reduction Act will help North County homeowners to:
- Save money on monthly energy bills
- Receive sizeable rebates and tax incentives
- Breathe easier in a cleaner, healthier indoor air environment
By replacing outdated and inefficient heating and cooling systems and equipment, you can reduce the energy you’re using and save money in the long run. The Inflation Reduction Act makes heat pump installation and HVAC upgrades even more affordable with rebates and tax credits. The pros at Sherlock Air can help you decide if this is a good option for you. Give us a call at 760-935-6101.
Tax credits and rebates for heat pumps and HVAC
Many homeowners who have a combination furnace and air conditioning system opt for a heat pump instead. Heat pumps are more energy efficient since they use just one piece of equipment. Because of this, a heat pump can save you a good amount of money compared a furnace/air conditioner combination system—around $10,000 over 15 years on average. If you currently use electric (baseboard) heat, an electric furnace, propane, or fuel oil, your savings are closer to $15,000 over 15 years when switching to a heat pump.
The IRA offers tax credits that you can take advantage when you make the change to an energy-efficient heat pump. Tax credits are available now (to be applied when you file next year) and rebates will be available on equipment purchases and installation later this year.
The IRA also includes rebates that can be applied to equipment and installation purchases, which will be available toward the end of 2023. See the chart below for information on tax credits you may be eligible for:
Appliances that may be eligible for IRA tax credits
When you make certain qualifying hardware updates to make your home more energy efficient, you may be eligible for tax credits on purchases and installation.
Heat pumps are extremely energy efficient compared to natural gas furnace and air conditioners because they essentially replace and upgrade the two systems. A heat pump system has some advantages over other types of heating and cooling systems:
- It saves you money and space since you only need one unit to cool and warm your house
- Heat pumps require less maintenance because you will only need to schedule one maintenance check per year
- Your carbon footprint is smaller since no fuel is needed.
- You save money on your energy bill every month.
The HVAC experts at Sherlock Air can give you all the information you need to replace your current system with an energy-efficient heat pump.
Heat pumps are not appropriate for all homes, so you may find that air conditioners are a better fit. Today’s air conditioners are required to meet certain energy efficiency standards and use a coolant that does not emit ozone-harming gases. These AC appliances can reduce carbon pollution and help you make significant savings on your energy bills. Ask the HVAC experts at Sherlock Air what makes the most sense for your home. Call us at 760-935-6101.
An energy-efficient furnace may make sense for some North County households, depending on various factors like the structure of the home. If you are in the market for a furnace upgrade, you can save up to $600 with the tax credits included in the Inflation Reduction Act. Give Sherlock Air a call at 760-935-6101 to have a certified technician recommend what’s best for your home.
25C Tax Credits for HVAC and Heat Pumps
As part of the Inflation Reduction Act, some existing tax credit and deduction programs were extended. The 25C Energy Efficiency Home Improvement tax credit now covers 30% of the total cost of qualifying new energy efficient qualified systems.
This means that North County homeowners will be able to deduct 30% of the total cost of a heat pump installation or HVAC upgrade, with a total cap of $3,200 in tax credits. Give the pros at Sherlock Air a call for advice and recommendations.
IRA Rebates for HVAC and Heat Pumps
The Inflation Reduction Act also includes rebates on the purchase and installation of heat pumps or updated HVAC systems. These rebates will be available later on this year.
High-Efficiency Electric Home Rebate Act (HEEHRA)
The High-Efficiency Electric Home Rebate Act (HEEHRA) offers discounts on the purchase of equipment for electrical projects—up to $14,000 per year! HEEHRA discounts are capped at 50% of qualifying costs for North County households that earn between 80% and 150% of area median income. Households earning less than 80% will see 100% of coverage of qualifying costs (up to $14,000) through this act. (Reminder: These are rebates, not tax deductions.)
Home Owner Managing Energy Savings (HOMES) Whole House Rebate
The HOMES rebate is a whole-home, performance-based rebate, meaning that the more energy you save by making upgrades, the more money you get back. When you make home upgrades that save 20%-35% more energy, you can save up to $8000 with the HOMES rebate. This rebate will become available later in 2023.
All North County homeowners qualify for the HOMES Rebate, with higher rebate rates for low- and medium-income households. 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%.
Contact Sherlock Air at 760-935-6101 today to schedule an appointment and see how you can save money with a heat pump or other HVAC upgrade and take advantage of these rebates.
The exact timelines for these rebates are dependent on Department of Energy guidelines and state implementation.
NOTE: The HOMES rebate and the HEEHRA rebate can’t be combined, but North County homeowners may claim both the rebates and the Inflation Reduction Act tax credits.
Contact Sherlock Air at 760-935-6101 and schedule an appointment to see how you can upgrade your house and save with the HEEHRA or HOMES rebates.
Inflation Reduction Act Quick Facts
The Energy Efficiency Home Improvement 25C Tax Credit that went into effect on January 1, 2023, will cover up to 30% of the total cost and you can save up to $3200 if you install a heat pump or energy efficient system in your home today.
The HEEHRA rebate allows middle- and low-income households to earn up to $14,000 in rebates for electrification home upgrades, but this will not be going into effect until end of 2023.
The HOMES rebate is a whole-home, performance-based rebate, meaning the more energy you save by making certain home upgrades, the more money you receive back in rebates. You can save up to $8000 in rebates depending on your income level and will go into effect at the end of 2023.
Sherlock Air has the answers to all your heat pump, HVAC, and Inflation Reduction Act (IRA) questions
Our trusted experts know the ins and outs of the IRA rebates and tax incentives and can guide you to the right choice for heat pumps, HVAC upgrades, and other energy-efficient options to cool and heat your home. Contact us at 760-935-6101 today to make an appointment for a home inspection or assessment, or to ask us questions you may have about how you can take advantage of the Inflation Reduction Act. NOTE: Sherlock Air cannot offer specific financial or tax advice. Please consult your tax professional when the time comes to file your 2023 returns next year.