New legislation may make it easier to upgrade your home systems, including heating and cooling. The Inflation Reduction Act aims to tackle climate change and help Americans reduce their carbon footprint by offering financial incentives to homeowners who purchase energy-efficient systems. A key benefit includes offering up to $14,000 in tax credits and rebates for those looking to make their households as energy efficient as possible.
Inflation Reduction Act appliance benefits can be used to reduce the cost of upgrades around the house. Whether you’re dreaming of purchasing new electric appliances or are eager to install heat pumps, these new tax credits can help offset the cost, which your local Aire Serv pro can help you set up! About 40 percent of carbon emissions stem from buildings, so these incentives can put the United States on track to achieve reduced fossil-fuel emissions over the next 5-10 years.
What's in the Inflation Reduction Act of 2022?
The Inflation Reduction Act of 2022 includes a number of significant changes for American consumers. In addition to the tax credits and rebates mentioned above, there are additional provisions to help reduce the tax gap and help Americans make greener purchases. You can find additional information on what’s in the new legislation from the Committee for a Responsible Federal Budget.
How Can the Inflation Reduction Act Benefit You?
There are several ways that the Inflation Reduction Act can benefit Americans. The entire goal of the legislation is to save consumers money while they work to fight climate change in their daily lives. Rebates on appliances are just the beginning. There are also new credits for those hoping to purchase electric vehicles. You’ll see savings on energy costs, too. The legislation aims to move our energy grid to cleaner, cheaper forms of fuel. This is intended to reduce expenses and pollution while saving Americans money on energy costs over the next decade.
If you’ve been thinking about adding solar panels to your home, the Inflation Reduction Act can benefit you there, too. The Residential Clean Energy Credit offers a credit of up to 30 percent for households that invest in clean energy. This is good news for those who want to upgrade to a heat pump or air conditioner. Your local Aire Serv team can help with the installation, service, and maintenance of both. To learn more about the opportunities afforded homeowners by the Inflation Reduction Act, and which type of upgrades qualify, contact Aire Serv today!
What's Included in the Inflation Reduction Act for Heat Pumps?
The Inflation Reduction Act aims to encourage more use of renewable energy sources, including hydro, wind, and solar. The energy made by these sources produces no carbon emissions, so they are classified as “clean.” The goal is to move away from energy sources that burn fossil fuels and replace them with ‘clean’ sources. For homeowners, the first step is upgrading to more energy-efficient electric appliances like heat pumps.
The High-Efficiency Electric Home Rebate Act (HEEHRA) is the name of the Inflation Reduction Act’s heat pump incentive program. Consumers can benefit from point-of-sale rebates on any heat pump used for home heating and cooling, with savings of up to $8,000. This kind of appliance rebate is automatically deducted from the overall cost of the appliance at the time of sale. So, there’s no need to send in a refund request. These rebates are available for low and moderate-income households.
Will You Quality for a Rebate on a New Heat Pump?
If your household income is 80 percent below the median income in your geographic area, you will receive 100% of the appliance rebate available, which means new heat pump savings of up to $8,000. If your income is 81 to 150 percent higher than your area’s median income, you’ll receive up to 50 percent of the cost of the heat pump. To determine your area's median income, check out this handy tool from Fannie Mae.
Even if your household income exceeds 150 percent of your area’s median income, you can still benefit from the HEEHRA rebate. You can receive a 30 percent tax credit of up to $2,000 on a new heat pump. While the rebates are most significant for low-income households, middle and above-average-income homeowners can still benefit from substantial savings. There’s truly never been a better time to invest in a new heat pump for your home.
Will a Heat Pump Work for My Needs?
If you’ve been inspired to take advantage of these rebates and make greener choices for your household, you may be wondering whether heat pumps will even work for your home. Heat pumps can work in temperatures below zero degrees. Some manufacturers design models that perform best in extreme climates. However, it’s important to note that heat pumps do not perform at their highest efficiency in freezing temperatures. Those in cold areas may opt to supplement their heat pump with a furnace. A heat pump can still help reduce your energy consumption overall.
Heat pumps may also struggle to deliver peak cooling performance at temperatures greater than 100 degrees. Portable air conditioners and ceiling fans can help keep you comfortable if you live in a region that regularly experiences such excessive heat.
Other Heat Pump Benefits
Upgrading to a heat pump will help you enjoy significant energy savings. Heat pumps can do the job of both a furnace and an air conditioner, which reduces the number of bulky units in and around your property. Heat pumps run more efficiently than traditional furnaces, which is good for your monthly energy budget and the environment too.
Heat pumps also offer better air quality because many units have dehumidifying and air filtering capabilities. As a result, a heat pump can improve the air quality in your home as they heat or cool your space. There’s also the improved safety factor to consider. Since heat pumps don’t present a gas leak or tip-over hazard, your entire family will be safer. Heat pumps also tend to be quieter than other heating and cooling systems.
Who Qualifies for Inflation Reduction Act Rebates
The rebates on appliances are available for households making up to 150 percent of their local area median income. Induction Act appliance rebates apply to both the cost of an appliance and installation. The rebate also applies to any ventilation or rewiring work that may be necessary for your upgrade. When we discuss your Induction Act appliance installation, ventilation work, or rewiring services, we’ll advise you on the median income for your area and the rebates you qualify for based on the system you choose. We’ll also explain how we apply the rebates to come up with your final reduced cost.
Eligible homeowners can get up to $840 off the price of a cooking appliance and a heat-pump clothes dryer. For electrical and installation work, the rebates cover up to $500 for contractors, up to $1,600 for insulation, ventilation, and air sealing, and up to $2,500 for upgrades to electrical wiring. There is an additional $4,000 rebate available for those upgrading their electrical panel (this is the box that holds your circuit breakers to distribute electricity from your utility). Finally, homeowners can also claim up to $8,000 in tax credits on heat pumps. That’s a lot of savings! We can help you sort it all out to determine how to maximize your rebate savings.
How Do You Apply for a Rebate?
Navigating these numbers can be a real headache. To help, Rewiring America has developed a calculator to show rebate potential based on your household size and income, your tax filing, zip code, and whether you own or rent your home. If you have questions, the experts at Aire Serv can answer them and provide more details.
No official application has been launched yet, and it may fall to each state to develop their own rebate application process. The good news is that consumers have 10 years to take advantage of the rebate. When you’re ready to upgrade your HVAC system, call us and ask about available rebates. We’ll supply additional information about how to qualify and, if necessary, help you apply.
Call us today at or request an appointment online to discuss Inflation Act appliances. We’ll help you get the most out of the benefits that the Inflation Act of 2022 can provide for you!