HVAC
HVAC installation in San Antonio, TX

When you’re ready to invest in a new air conditioning or heating system for your home, you have many options to choose from. As you explore the possibilities, one of the best things to consider is the tax incentives and local rebates you can benefit from when purchasing particular systems. These can help you to recoup some of your up-front purchase price to reduce the overall system cost.

Inflation Reduction Act of 2022

A significant incentive you can receive for purchasing a new home HVAC system emerged under the Inflation Reduction Act of 2022. This comes in the form of a tax credit for your federal income tax. You can claim 30% of the cost of your new system, plus installation labor, up to a maximum of $3,200 per year. Note that some types of systems may qualify for smaller credits. You can get a more detailed idea of which systems qualify you for this tax credit and how large an incentive you can expect by visiting ENERGY STAR’s website.

It’s important to understand that this tax credit only reduces the amount of federal income tax that you owe. It doesn’t provide you with a refund for any excess amount that you qualify for. For example, let’s say that you’re eligible for a tax credit of $3,000 from the purchase of your new HVAC system. If you owe $5,000 in federal income taxes, you can offset that amount by $3,000 so that you owe the IRS only $2,000 for the year.

Manufacturer Rebates

In an effort to attract more potential clients, it’s common for HVAC system manufacturers to offer their own incentives. These usually come in the form of either an instant incentive that reduces the up-front purchase price or a mail-in rebate that qualifies you to receive a check in the mail after purchasing your system. The specific amount of the rebate will vary greatly, depending on the particular manufacturer that produced your system as well as the type of system you purchase. Typically, when you install a higher efficiency system, you’re going to receive a higher rebate amount than when you choose only standard efficiency options.

Utility Rebates

Utility companies offer another form of local incentive that you can enjoy when purchasing a new HVAC system for your home. It’s common for a lot of Texas utility companies to offer a set rebate amount, depending on the type of system that you purchase for your home. In order to be eligible for this type of rebate, you must be a client of the particular utility company you’re seeking the rebate from. There are many different utility companies that offer these rebates. They include:

  • Austin Energy
  • El Paso Electric
  • CenterPoint Energy
  • Guadalupe Valley Electric Cooperative
  • Oncor

If you qualify, you will receive a credit on your energy bill. This rebate does not typically come in the form of a cash payment.

PACE Financing

Purchasing a new HVAC system can be costly for any homeowner. The Federal PACE program offers a special type of financing for property owners in certain regions throughout the great state of Texas. This program requires you to get a voluntary assessment of your property tax bill. When you purchase a new HVAC system, it will be financed, and the payments will be made every year when you pay your property taxes.

Essentially, instead of your property taxes going to the local government, they go toward paying for your new system. Along with great financing, this program offers the incentive that the PACE loan stays with the property. This means, if you sell your house while you still owe on the system, you don’t have to be responsible for paying off that loan. Rather, the new property owner pays off the loan with the property taxes that they pay.

LoanSTAR Program

Offered by the State Energy Conservation Office, this program provides low-interest financing to Texas homeowners who make energy-efficient improvements to their houses. It’s important to visit the SECO’s website to determine your eligibility for this specific financing, as it’s only available for certain areas throughout the state.

Texas Veterans Land Board (VLB) Program

The VLB program is specifically designed to help veterans throughout the state obtain competitive interest rates on loans to purchase things like an HVAC upgrade. These loans tend to come at a lower interest rate than most homeowners will find with local credit unions or big banks.

Consulting an HVAC Technician

One of the best ways to learn about tax incentives and potential rebates that you can take advantage of is to consult with one of our HVAC technicians. We’ll be able to assess your home, make recommendations for the best systems to meet your needs, and give you the insight you need to understand the credits and rebates the system can make you eligible to receive.

Key Factors That Affect Eligibility

There are many different factors that will affect your eligibility to receive these different incentives and rebates. One of the most obvious is going to be the type of system that you purchase. Many of these rebates and incentives are specifically designed for homeowners who purchase extremely energy-efficient products. Because heat pumps and high-efficiency furnaces offer such a high operating efficiency, they typically make you eligible to receive all these incentives. In a lot of cases, you’re going to see higher incentives for geothermal heat pumps and air source heat pumps, as they tend to offer a much higher operating efficiency than high-efficiency furnaces and central air conditioning systems.

Another factor to consider is the overall efficiency rating of the system. Each system will have an efficiency rating that describes how efficient its operation is. For air conditioning systems, this is given as a seasonal energy efficiency ratio (SEER2) rating, and for heating systems, this is given as an annual fuel utilization efficiency (AFUE) rating. When you visit the different websites for the incentives or rebates that you’re looking to get, they will typically have a minimum standard for the SEER2 or AFUE rating that your new system must have in order to make you eligible to receive the incentive.

Note that most of these incentives require you to have a professional HVAC technician do the installation for you. Some of the programs may even require you to consult with the technician and apply for their financing or incentive prior to purchasing the system. If you fail to work with one of their approved HVAC contractors, you may not be eligible to receive the incentive or rebate.

Dependable HVAC Installation Service

Air Authority, A Riteway Service Company offers dependable HVAC installation service to the San Antonio, TX community. Our helpful team can also assist with all your heating and cooling system repair, replacement, and maintenance needs.

Call us today to learn more about incentives and rebates or schedule a service consultation with one of our knowledgeable technicians.

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