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HVAC Energy Credits and How they Affect You!

In late 2008, George Bush signed into effect the EESA (Emergency Economic Stabilization Act) 2008. The law extends significant tax credits for homeowners who make the choice to purchase higher efficiency HVAC equipment, versus choosing the lowest cost solution presented to them. We wanted to take a quick look at the tax credits, and relate how they can effect you!

Energy Tax Credits for HVAC Equipment

Keep in mind that not ALL equipment is going to qualify for this tax credit and make sure you ask your HVAC Contractor how it will apply to you. The credit amount and qualifications are listed in the table below:

Central Air Conditioners : $300 Tax Credit
Split Systems: EER 12.5 or Higher, 15 SEER or Higher!
Package Units: EER 12 or Higher, 14 SEER or Higher!
*Subject to a $500 maximum per homeowner for all improvements combined.

Update 2010: Air Conditioner Tax Credit Guide

Air Source Heat Pumps: $300 Tax Credit
Split Systems: HSPF 9 or Higher, 13 EER, 15 SEER or Higher!
*Subject to a $500 maximum per homeowner for all improvements combined.

Geothermal Heat Pumps: %30 of Cost, Up to $2000!
Closed Loop: Minimum 14.1 EER, 3.3 COP or Higher
Open Loop: Minimum 16.5 EER, 3.6 COP or Higher
Direct Expansion: Minimum 15 EER, 3.5 COP or Higher

Gas, Oil or Propane or Hot Water Furnace: $150 Tax Credit
Furnaces must Meet a minimum of 95% AFUE
Boilers must meet minimum 95% AFUE.

HVAC Air Handler: $50 Tax Credit
The requirement for the air handler must not exceed 2% of the furnace total energy use.

Cost Savings Versus Benefit

Aside from the environmental benefits to choosing a higher efficiency HVAC system for you home or business, you need to weigh the additional upfront cost, versus the long term savings you will achieve. Regardless of where you live in the USA, you can expect to pay a high cost for the higher efficiency equipment, in some cases, double the cost. In order to determine if it will benefit you, check out the HVACOPCost Savings Calculator to find out how much you may save.

Obviously, consumers in hotter climates will recognize an immediate benefit choose a higher SEER rating on the cooling system, where they wont realize any benefit choosing a high efficiency heating system, since they rarely use it. What good is a $50 tax credit for a furnace that cost you $3000 and never gets used?!

Bottom Line

The Home Energy Tax Credits can save you a considerable amount of money on your initial HVAC purchase when you choose to install high efficiency equipment. Search out manufacturers that also offer rebates on equipment, and compound your savings. Regardless of which path you take to replace your unit, make sure your HVAC Contractor reviews all options with you so you know exactly what you are getting!

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