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Do Energy Efficient Air Conditioners Qualify for Tax Credits?  

Cats sitting next to HVAC unit outside

It’s getting to be that time of year here in Florida…you know, the time of year when you’re running your AC full blast to keep cool! But if your system is old and inefficient, all that cooling could be costing you a lot of money on your energy bill.  

This is where a newer energy-efficient air conditioner can be greatly beneficial. And the best part? Some energy-efficient models can also qualify for a tax credit. Nice!  

Our team at Integrity Home Solutions outlines the importance of a reliable HVAC system and how you can cut tax costs when you file your taxes.  

Gray HVAC unit next to house

The Importance of Energy-Efficient HVAC Systems  

Energy efficiency is not only beneficial to the environment but also a smart financial decision. HVAC systems are one area where energy efficiency can have a significant impact on both the environment and your wallet.  

Heating and cooling account for 48% of the energy use in an average American home, highlighting just how important efficient HVAC systems are. 

The use of energy-efficient HVAC equipment can lead to lower utility bills, as less energy is needed to maintain comfortable indoor temperatures. Additionally, modern HVAC systems are designed to be more durable, reducing repair costs and extending their lifespan. This means that investing in an efficient system can pay off in the long run by providing better performance and lowering overall maintenance costs. 

Not only do efficient HVAC systems save money over time, but they also help reduce carbon emissions and promote sustainability. By consuming less energy, these systems contribute towards reducing our dependence on fossil fuels while minimizing our carbon footprint. 

Federal Energy Tax Credits  

Energy-efficient air conditioners have become increasingly popular in recent years, but the cost of these units can be quite expensive.  

The good news is that homeowners who purchase and install energy-efficient air conditioners may be eligible for certain tax credits or rebates. 

There are three rebate programs you might be interested in: 

#1. The Inflation Reduction Act  

Signed into law in August 2022, The Inflation Reduction Act (IRA) is designed to counteract rising prices and climate change which can negatively impact the economy and everyday consumers.  

The IRA aims to reduce greenhouse gas (GHG) emissions by 40% by 2030.  

The act makes it more affordable for homeowners to install energy-efficient appliances and have them serviced when necessary. For 2023, the tax credit that is available to Florida residents equates to 30% of the costs of upgrading your cooling system.  

#2. High-Efficiency Electric Home Rebate Program (HEEHRP) 

The United States government has put aside $4.5B of funds for the High-Efficiency Electric Home Rebate Program or HEEHRP. The funds are distributed to state energy offices that will in turn administer the rebate program.  

Homeowners can receive an $8,000 rebate for installing an Energy Star® qualified heat pump cooling system.  

Note: Eligibility for federal rebates is based on your income and the values stated here aren’t guaranteed for every household.  

#3. Energy Efficient Home Improvement Tax Credit (25C) Program 

The Nonbusiness Energy Property Credit (25C) for the installation of high-efficiency equipment was extended through 2022 and provided federal tax credits of up to $500.  

The program was amended for 2023 and will be extended through 2032. It increases the tax credit limits as follows: 

Eligible equipment includes: 

  • Heat pumps 
  • Heat pump water heaters 
  • Energy-efficient HVAC systems (furnaces, boilers, central AC) 

The new 25C program has an annual cap of: 

  • Up to $600 for qualified furnaces and air conditioners. The annual cap is $1,200 
  • Up to $2,000 for qualified heat pumps, heat pump water heaters, or boiler 

There are no income requirements to be eligible for this tax credit and it cannot be combined with other federal rebates or programs.  

Tampa Electric Rebates  

If you are a customer of Tampa Electric (TECO) you can earn a rebate if you replace your old system with an energy-efficient system. The program is available to all residential customers.  

To qualify your HVAC system must meet the minimum Seasonal Energy Efficiency Rating SEER of 16 or 15.25 SEER2. Further, ductless heat pump mini-split systems are eligible for the rebate if they have the same minimum SEER ratings.  

Duke Energy Rebates  

If you live in Pinellas County, you likely have Duke Energy. They also have a rebate program available for residential customers residing in single-family homes, mobile homes, duplexes, or townhomes; which also requires similar SEER requirements to TECO.  

If interested, we encourage you to reach out to your specific energy company.  

How Do I Get These Rebates & Tax Credits?  

If you are looking to <a href="" title="<strong>New HVAC System? Here’s How to Get the Best Results! upgrade your HVAC system in Florida to be more energy efficient it’s important to determine if your new HVAC system qualifies for a tax credit. The equipment must meet certain energy efficiency requirements set by the federal government.  

Once you’ve determined that your equipment qualifies, make sure the installation is done by a licensed professional—like one of our techs at Integrity Home Solutions— who can provide proper documentation. This includes invoices, receipts, and manufacturer certifications that prove your new HVAC system meets the necessary standards. Keep these documents organized and easily accessible come tax time. 

We are by no means tax professionals, so we recommended reaching out to a CPA or accountant who can help ensure that you get the credits and rebates that you deserve.  

Read More > What Makes an HVAC System Efficient?  

Couple sitting on couch with ductless AC

Go Energy-Efficient  

Energy-efficient air conditioners can be a great way to help save you money and the environment. Not only do they require less energy and natural resources to run, but they also qualify for tax credits when purchased. 

If you’re considering replacing or upgrading your current system, be sure to check if it is eligible for any tax incentives before making a purchase. And if you aren’t sure, our team at Integrity Home Solutions is happy to help! Call our 5-star rated team for an HVAC installation quote or consultation today!  

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