With all the great rebates and tax credits currently available, there’s never been a better time to buy a heat pump. You can take advantage of the IRA, NYSERDA Clean Heat Program, and the Geothermal tax credit. These can be used for Geothermal heating installation, electrical panel upgrades, and heat pump air conditioner/heat and water heaters. Let’s take a closer look at just how much you can save.
Inflation Reduction Act (IRA)
The Inflation Reduction Act of 2022 is a new federal law that’s designed to curb inflation by reducing the deficit and a historic investment in programs to increase domestic energy production and tackle the climate crisis. It helps put America in a strong position to lead the world in domestic clean energy manufacturing, and to achieve a 40% reduction in carbon emissions by 2030.
For families, the immediate benefits of this legislation include lower prices for home energy and valuable tax credits that can be used to offset the cost of installing more energy-efficient heating and cooling units in your home.
Geothermal Heating Installation
One of the most energy-efficient central heating and cooling systems we install here in Western New York are geothermal heat pumps. These heat pumps use the constant temperature of the soil just below ground to heat your home’s air in the winter, cool it in the summer, and keep the humidity comfortable all year round. These systems don’t burn heating oil, propane, or natural gas, making them a much cleaner and safer option than traditional heating systems.
To make geothermal heating costs more affordable, there is also an uncapped 30 percent tax credit for a geothermal heating installation, a 25% state tax credit capped at $5,000, and an electric utility rebate. A typical geothermal installation can cost around $55,236, and with an electric utility rebate of $6,525, a 30% uncapped federal tax credit of $14,613, and a 25% state tax credit capped at $5,000, the installation will end up costing $29,098.
In addition, homeowners are eligible for New York State’s Clean Heat Program, which is administered by the homeowner’s utility company. Each utility company has a unique incentive that is based on the heat pump’s total heating capacity BTUH.
Electrical Panel Upgrades
Another helpful discount provided by the Inflation Reduction Act is funding to cover upgrades to your home’s electrical panel. These upgrades allow you to reduce your carbon footprint by switching to heating and cooling systems that run on efficient electricity instead of fossil fuels installing an electric vehicle charging station at home.
Around the same time the Inflation Reduction Act was passed, so was the High-Efficiency Electric Home Rebate Act (HEEHRA). It gives low-income households (defined as having a total income under 80 percent of Area Median Income) an upfront discount that covers 100 percent of your electrical panel costs up to $4,000.
The Inflation Reduction Act includes two provisions that cover electrical panel upgrades. The 25C Tax Credit provides homeowners with a 30 percent tax credit for an electrical panel upgrade, capped at $600 per year, if it’s upgraded at the same time as another qualifying upgrade (like a new heating system) covered by 25C. The 25D Tax Credit gives households a 30 percent uncapped tax credit for an electrical panel upgrade if the work is done in conjunction with a rooftop solar installation.
Heat Pump Air Conditioner/Heater & Water Heaters
A heat pump is part of an energy-efficient home heating and cooling system that pulls low-temperature heat from outside air across a heat exchanger to warm it, then transfers the warm air indoors. In the warmer months, it pushes the hot, muggy air out of your home to cool it down. The same efficient technology powers heat pump water heaters, which warm the water used in your home’s faucets and shower.
Under HEEHRA, low-income households can receive upfront discounts to cover 100 percent of your heat pump costs up to $8,000 and 100 percent of your heat pump water heater costs up to $1,750. The 25C Tax Credit gives households a 30 percent tax credit for heat pumps and heat pump water heaters, capped at $2,000 per year The same 25C provision also includes a 30 percent tax credit up to $500 for an electrical panel upgrade when the work is done in conjunction with a heat pump upgrade.
Homeowners are also eligible for New York State’s Clean Heat Program, which is administered by the homeowner’s utility company. Each utility company has a unique incentive that is based on the heat pump’s total heating capacity BTUH.
Contact Us Today
This is a great time to consider buying a heat pump! Contact Capital Heat today to schedule your free estimate with our team of heating experts. We’re happy to help you figure out the best way to upgrade the comfort and efficiency of your home’s heating and cooling system with the help of these new incentives that will save you money.
