Does It Make Sense To Purchase A New Heating & Air Conditioning System Before Year End?

August 16, 2022

Purchasing A New Heating & Air Conditioning System

When it comes to home maintenance, replacing your air conditioning & heating system can be quite costly. However, there have been some important developments over the last few weeks related to incentives and tax breaks that may ease the burden of replacing your system.

The most notable development is the Inflation Reduction Act which was passed on Friday, August 12, 2022, and contains attractive rebates when upgrading a home’s air conditioning and heating system.

Todd Russo, REEIs Air Conditioning, a Rosie on the House Certified Partner, explains why this year may be the most opportune time to give your home’s HVAC system a modern update.

The Inflation Reduction Act offers three main programs for homeowners to take advantage of that will save money and improve the energy efficiency of their homes. The act will introduce a new 30% tax credit for energy efficiency improvements to your home. These improvements consist of the following:

Air Conditioning & Heating Equipment
Home Energy Audits
Insulation and House Sealing
Ductwork

and other improvements which improve the overall efficiency of your home.

In addition to the tax credit, the Act will offer a Home Energy Rebate Program, providing up to $4,000 in energy rebates.

Lastly, a new incentive called the High-Efficiency Electric Home Rebate (HOMES), formerly known as the Zero-Emission Homes Act (ZEHA) program will be introduced. It will primarily be available to low and median-income families by the end of this year. The program consists of up to a total of $14,000 in rebate credits for improvements that qualify under the program. To qualify for the program, homeowners must report an income of less than $100,000 on their tax return and can receive refunds for improvements at 50-100% of the cost. Of course, we cannot forget the pre-existing SRP & APS rebates for air conditioning & heating systems, duct work, insulation, and energy audits.

Russo also notes there is another aspect that is worth considering when deciding whether this is the year to replace your old AC system. Starting
in 2023, industry testing and specification standards for air conditioning & heating systems will be changing. While the changes will bring additional improvements concerning efficiency, the cost is expected to rise by 15-25% depending on the manufacturer.

All of these rebates related to efficiency may bring up the question of what system or brand you should consider buying. REEIs is a leading service
provider for Trane systems. Rosie on the House cannot speak highly enough of the quality and efficiency of Trane systems. You can find heat pumps ranging in SEER ratings from 14.5 up to 21.00, outdoor AC systems boasting SEER ratings from 14.5 to 22.00, and packaged systems from 14.0 up to 16.00 in efficiency rating. REEis offers a multitude of systems to fit various budgets.

While quality and high efficiency may come with a higher cost overall, it is worth considering the rebates and credits that are available to homeowners this year. Homeowners can qualify for up to three out of the four programs listed above. Bringing the total rebates and tax credits up to $7,200 for high-income clients and $17,200 for low to median-income homeowners. REEIs has special financing available, offering an additional avenue of easing the upfront cost of a new system.

At the end of the day, if your air conditioning and heating system are greater than 10 years old, 2022 may be the best year for replacing your system. The ability to take advantage of new rebates and credits, as well as beating the pending price increases on new systems, may be your best bet to avoid breaking the bank in the name of efficiency.

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PODCAST

Some important information you need to know! The Inflation Reduction Act includes some attractive tax credits and rebates for upgrades from new units, insulation to ductwork. Depending on your annual income and timing, the incentives for improving energy efficiency in your home are worth looking into. Todd Russo of REEis Air Conditioning dives into the details on the possible value of installing a new system this year or hold until next year.

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ROSIE CERTIFIED CONTENT PARTNER
REEIS air conditioning and home performance have been helping homeowners since 2009 take advantage of the benefits and incentives available to homeowners. We are uniquely built to realize and procure the best solutions to improve your home’s comfort and energy efficiency. REEIS works with our clients to facilitate all the available incentives.