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2024 Texas HVAC Rebates & Tax Incentives to Take Advantage of

This is an excellent time to be considering a new HVAC system in Texas. Your options are more energy-efficient than ever. The U.S. Department of Energy (DOE) even updated the energy efficiency standards in 2023 to reflect these innovations. That said, purchasing a new HVAC system is a big investment for the average Texas homeowner. The good news is that there are rebates and tax incentives through which you can reduce your initial obligation or at least the final cost. Some of those are returning, offers while others are completely new for 2024.

High-Efficiency Electric Home Rebate Act

Congress passed the High-Efficiency Electric Home Rebate Act (HEEHRA) as part of the Inflation Reduction Act (IRA) of 2022. There are two core goals for this 10-year rebate program. The first is to promote the transition from fuel-fired furnaces to electric heat pumps. The second is to make that switch a practical option for a much wider range of American families.

While this is a federal rebate, the program allocates the available funds on a per-state basis. The state, Texas in this case, has the responsibility of processing rebate claims and providing the money. The rebate covers both equipment and labor and is only available to low-income and moderate-income households.

Low-income households can claim 100% of the heat pump installation costs up to $14,000. Moderate-income households can claim 50% of the heat pump installation cost up to $14,000. The State Energy Conservation Office (SECO) oversees HEEHRA in Texas. SECO intends to begin accepting rebate claims by the end of 2024 and no later than the start of 2025.

SECO will require preapproval through an application. Once pre-approved, you can move ahead with the installation. When the installation is complete, submit the invoice and other required documentation. SECO will either pay you with a check or pay the HVAC installer directly. Call SECO or contact the agency online for more information about timing your installation and when you can apply.

Energy Efficient Home Improvement Credit

The Energy Efficient Home Improvement Credit is a tax credit available to American homeowners who make energy-efficient home upgrades. This credit has been available in one form or another for a couple of decades now. This particular iteration went into effect on January 1, 2023, and ends before January 1, 2033.

The federal government does not limit the credit to HVAC but rather extends it to many different energy efficiency upgrades. It doesn’t limit you to a heat pump either, as the program applies to any type of home heating or cooling system. The system you choose must meet the credit qualifications for that equipment class. Often, ENERGY STAR certification is a criterion.

The credit is 30% of the equipment and labor costs for qualified upgrades. The total credit per year is bigger for heat pumps at $2,000. The total credit for other HVAC equipment is $1,200. The IRS does allow you to claim multiple credits in a year up to a total of $3,200. If, for instance, you installed a qualified furnace and AC, you could claim up to $2,400.

There are several important aspects of this offer to understand. You cannot stack it with the HEEHRA rebate. Homeowners will want to see if they’re eligible for that rebate first and then consider this credit if not. Secondly, this is a non-refundable tax credit. In other words, you cannot earn money with it but rather only mitigate your taxes. If you’re eligible for a $1,200 credit but only owe $600, your tax bill would be $0. The other $600 would remain unclaimed.

Free and Reduced-Cost Home Energy Audits

The Environmental Protection Agency (EPA) recommends a home energy audit every several years. You should also schedule an audit in advance of installing a new HVAC system. The information you receive will help you choose the right system. It can also help you upgrade your home in ways that make your new HVAC system more efficient.

Texans have ways to eliminate or at least reduce the cost of an audit. There may be a rebate available through your local utility company. You can stack such a rebate with other offers. The DOE provides the Weatherization Assistance Program to low-income families. If you qualify, the program will provide you with a home energy audit at no cost. If you do not, you can claim the Energy Efficient Home Improvement Credit for an audit up to $150.

Residential Clean Energy Credit

The Residential Clean Energy Credit is similar to the Energy Efficient Home Improvement Credit. You can claim one or the other but not both. The important difference is that this credit has no annual cap. For HVAC, it applies specifically to geothermal heat pumps. If you install either a ground- or water-source heat pump, this credit will be the larger of the two options.

Energy Efficiency Rebates From Texas Utility Companies

Texans should check the website of their local utility company for HVAC rebates. The State of Texas incentivizes its utilities to offer rebates and other offers to their customers. Many of these utilities offer the Residential Energy Efficiency Rebate. Through it, you can claim between $90 and $310 per ton of your new central AC or heat pump system. It’s available to households that earn less than 80% of the median income for their area. The rebate limit depends on how much energy the upgrade will save. Upgrades that reduce energy usage between 20% and 35% let you claim up to $4,000. Projects that reduce energy more than that let you claim up to $8,000. You can also combine this offer with the federal government, which offers up to the total cost of the installation.

ENERGY STAR Rebates

There are two types of ENERGY STAR rebates that may be available to Texans, and they are stackable. One type is a rebate offered through your electric company. You should check its website for those offers. The other type is product rebates that manufacturers and even private groups offer. You can find those offers on the EPA website based on your zip code.

Texas Utilities Opt-In Programs

Utilities in Texas often offer rebates for smart thermostats. Many offer thermostat rewards as well. Opting in gives your utility light control over your thermostat to lower demand during peak usage. The benefit for you is that you’ll get a one-time credit and an additional credit annually.

HVAC Tune-Up Rebate

Many Texas utilities offer a tune-up rebate to encourage homeowners to schedule seasonal maintenance. The rebate is worth about $175 for the average system. You must schedule the tune-up through the utility, and it will apply an instant credit to your account.

HVAC Installations and Replacements in San Antonio

Air Authority, A Riteway Service Company is a locally owned and operated HVAC company serving San Antonio and the surrounding areas. Our team installs heat pumps, air conditioners, gas and electric furnaces and ductless mini-splits. We maintain and repair those systems as well. Our company installs, repairs, cleans and seals ductwork. You can count on us to install and configure your new smart thermostat. We also install whole-home air purification systems, insulation, tank and tankless water heaters and generators. Call us today or contact us online with any questions about these services or to schedule an appointment.

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