Having a new air conditioner installed can be expensive. The good news is that homeowners can often mitigate that expense. One option is to recoup a federal tax credit for ACs. A secondary option is energy rebates and other sustainable energy incentives that may be available to you locally. Typically, you’ll need to choose equipment that meets certain criteria to take advantage of these benefits.
Federal Tax Credit
The federal government offers a central air conditioner tax credit for ENERGY STAR-certified ACs. The credit as of this writing applies to ACs installed between January 1, 2023 and December 31, 2032. To claim this credit, you do so through your federal income taxes and using IRS Form 5695.
ENERGY STAR is a program run by the U.S. EPA. Through the program, the EPA certifies ACs that meet a certain standard for energy efficiency. For California, the current standard is SEER 15.0 or SEER2 14.3.
How Much Can You Claim?
The credit for an air conditioner or heat pump is 30% of the total project cost up to $600. If you had other equipment installed at the same time, such as a high-efficiency furnace, you could claim it as well. The total limit for the efficiency tax credit is $3,200 annually. It typically breaks down to $1,200 for HVAC equipment. There is also a separate $2,000 limit if you opt for a geothermal system.
Energy Rebates
Many of the local utilities in California offer sustainable energy rebates. These rebates can offset your initial investment beyond the federal tax credit. It’s also money that is typically available to you much sooner. These rebates often have requirements beyond just ENERGY STAR certification, and we can help you navigate those. The best way to begin is to look at the rebates page on your energy company’s website. It is typically your power utility that provides these offers.
Local HVAC Experts in Sonora
If you live in Sonora or nearby and want more information about tax credits and rebates, we’re here to help. Comphel Heating & Air Conditioning, Inc. has served this region for more than four decades and has an A+ BBB rating. Call today or contact us online with any questions or to schedule an in-home consultation. We also offer HVAC repair, maintenance and installation and air quality services.
