Summer is coming and the U.S. Government wants to PAY YOU to upgrade your A/C!
You read that right. Right now, there are huge opportunities for American taxpayers to upgrade their air conditioning (and other systems!) while earning thousands of dollars in energy credits and rebates from Uncle Sam. However, as are all good things…they won’t last forever! One Hour Heating and Air is getting the word out NOW so YOU can take full advantage of these programs that might keep thousands of dollars in your pocket as you keep cool this summer.
Before we lay out how much you can save, we’ll first explain where this potential federal windfall is coming from: the Inflation Reduction Act of 2022. Don’t worry, we won’t get into a bunch of legal and congressional jargon…we’ll just hit the highlights that explain how much $$$ you can save!
The Inflation Reduction Act of 2022, or “IRA”, contains non-refundable tax credits designed to “encourage individuals to invest in energy efficiency improvements or clean energy in their homes”.
If you’d like to read the much longer, formal explanation compliments of the Congressional Research Service…stretch, hydrate, and click here!
In short, however, the government is essentially dangling big cash in front of you to buy more environmentally and energy-friendly appliances and systems for your home.
Our advice: take it!
The sections of the IRA we’re focused on at One Hour Heating and Air are IRA Section 25C (the Non-Business Energy Property Credit), the HOMES Rebate Program, and the High-Efficiency Electric Homes Program (HEEH).
IRA NON-BUSINESS ENERGY PROPERTY CREDIT, SECTION 25C:
Previously, this federal tax credit offered only a 10% return on qualifying energy efficient improvements or expenses related to energy efficient property paid or incurred during the tax year. Beginning this year (2023) that jumps to 30%! That means any qualifying energy efficient appliance or system you buy THIS year can mean a sizeable boost on your potential tax refund in 2024.
Also, in 2023, the lifetime limit on this tax credit was capped at $500 per taxpayer. Starting in 2023, that cap was totally lifted. The annual limit was $300 for any single energy property item in 2022. This year, it’s $600 per item, with most taxpayers getting an average of $1,200.
(While we’re highlighting the benefits for air conditioning here, you should know that this also covers a potential $2,000 tax credit for qualified heat pumps!) You can read the full list of changes and benefits here.
HOMES REBATE PROGRAM:
The HOMES Rebate program is based on energy savings and IRS income requirements and can vary by state.
It’s currently scheduled to allocate over $98-million dollars to North Carolina and $68-million dollars to South Carolina to address whole-house energy efficiency upgrades.
In North Carolina, the program will offer rebates to qualifying homeowners of up to $4,000 depending on how much energy the project saves once it is complete and if they live above 80% of their area’s median income. This increases to up to $8,000 for families who live below the 80% median income level in their area. It will also extend to multi-family unit owners on a per-unit basis.
What are the area median income levels across North Carolina? Click here to find out!
In South Carolina, like North Carolina, the HOMES Rebate Program will offer returns to qualifying homeowners of up to $4,000 if they live above 80% of their area’s median income and up to $8,000 for families who live below the 80% median income level in their area. This, too, is based on how much energy the project saves once it is finished and operational and will include rebate options for multi-family unit owners.
What are the area median income levels across South Carolina? They’re right here!
HIGH-EFFICIENCY ELECTRIC HOMES PROGRAM (HEEH):
Along with the HOMES Rebate Program is the High-Efficiency Electric Homes program (HEEH). This is anticipated to give an additional $98-million dollars to North Carolina and $68-million dollars to South Carolina to help low-to-moderate-income families purchase energy-efficient appliances such as heat pumps and electric cooking equipment. Additional funding exists for items such as upgrading wiring, electrical panels, insulation and air sealing. Under HEEH, customers may qualify for income-dependent rebates related to the following:
- Electric heat pump clothes dryers
- Electric heat pumps for space heating and cooling
- Electric heat pump water heaters
- Electric panel and wiring upgrades
- Electric stoves, cooktops, ranges, and ovens
- Air sealing
- Duct sealing
- Materials to improve ventilation
- Potentially other energy-saving technologies
At this point you may be asking: We’re already in to 2023, am I too late to qualify for these tax credits or rebates? NO! This is why One Hour Heating and Air is getting the word out NOW, in order to get you ahead of the U.S. Department of Energy, which is the entity finalizing the timeline to roll these benefits out. Currently, the DOE is aiming for summer 2023 to release targeted guidance to each state. Once that happens, energy officials in both states will release their plan to distribute the IRA rebates.
To stay updated on the U.S. Department of Energy’s plan, including public engagement sessions and how you can submit your feedback, visit their website.
We understand that navigating all of this state and federal tax credit information can be a little mind-boggling. We’ve done the hard work for you at One Hour Heating and Air! We’re well-versed on the new energy tax credit changes for 2023. It should be noted that these programs can be combined within certain parameters and your One Hour Heating and Air professionals can help you determine which approach will bring you the maximum benefit!
Warmer weather is coming soon, act now before summer starts. Don’t miss these opportunities! Our professionals are your go-to HVAC team in North and South Carolina!