Heat pumps are considered some of the most energy-efficient solutions for keeping your home comfortable all year-round. Not only do they reduce your electricity costs, but they can help minimize strain on any other heating and cooling systems.
What's more, right now the Inflation Reduction Act can offer you a rebate of no more than $8,000, making new installation even more affordable. So why wait? Call the pros at Farnell Mechanical, Inc. to schedule your heat pump installation in Auburn and Opelika.
What Is the Inflation Reduction Act
The Inflation Reduction Act of 2022 was written in hopes of reducing the effects of inflation on the country. One of the ways it does that is by funding green technology and making sustainable HVAC systems more affordable.
You can earn both rebates and tax credits after purchasing energy-efficient upgrades including heat pumps. Now's the perfect time to go green!
How Will the Inflation Reduction Act Affect Me
The Inflation Reduction Act helps lower residential energy costs by making heat pumps and other energy-efficient home upgrades more affordable. It does that in the form of rebates and tax credits.
Regarding the Inflation Reduction Act heat pump rebates and tax credits, you have two options for lowering costs. The ideal option depends on your income.
The two programs available are:
- Inflation Reduction Act heat pump rebate
- Inflation Reduction Act heat pump tax credit
What Is the Inflation Reduction Act Heat Pump Rebate
The rebate found in the Inflation Reduction Act is for low-income and moderate-income homeowners. The rebate covers 100 percent of the cost of heat pump installation for low-income homeowners and up to 50% percent for moderate-income homeowners.
The rebate can't exceed $8,000 for both low-income and moderate-income homeowners. It is a point-of-sale rebate, which means it is deducted from the purchase price when you buy the heat pump.
The income criteria are:
- Low Income: Less than 80% of the area median income
- Moderate Income: 80-150% of the area median income
Unsure which income category applies to you or what the typical income for your community is? The nonprofit group Rewiring America created an online calculator so you can find out. You only need to provide your ZIP Code and household income.
What Is the Inflation Reduction Act Heat Pump Tax Credit
For homeowners that make too much to be eligible for the heat pump rebate, there is an Inflation Reduction Act heat pump tax credit. Along with the ability to redeem the credit for up to 30 percent of the purchase or installation of a heat pump, the heat pump tax credit is worth no more than $2,000.
Distinct from the rebate, which is available at the time of purchase, the tax credit is received once you have filed your taxes.* Keep your receipt, because the credit can be claimed the same year the heat pump was purchased.
*Consult with a tax professional for full details on how to apply
Which Models of Heat Pumps Qualify for the Inflation Reduction Act
The Inflation Reduction Act heat pump tax credits and rebates only apply to the purchase and installation of energy-efficient heat pump models.
At the very least, a heat pump needs to have ENERGY STAR® certification for eligibility for the rebate or tax credit. Additional details are available from our team at Farnell Mechanical, Inc..
How Do I Get the Inflation Reduction Act Rebate
If you are an eligible homeowner, the heat pump rebate in the Inflation Reduction Act is available when you purchase the heat pump. You get it promptly as it is subtracted from the price of purchase and installation of the heat pump. There’s no need to send in a proof of purchase or wait for a rebate to come later.
The Inflation Reduction Act heat pump tax credit, on the other hand, must be redeemed on your taxes.* It lowers the total amount of money owed to the government when you file your taxes.
*Consult with a tax professional for full details on how to apply
Call Your Local Pros at Farnell Mechanical, Inc. to Learn More About the Inflation Reduction Act Heat Pump Rebate and Tax Credit
With a high-efficiency heat pump, you can save money and protect the environment thanks to tax credits and rebates from the Inflation Reduction Act. Farnell Mechanical, Inc. is happy to help you navigate the details on these discount programs so you receive the greatest savings possible! We're ready to help make your next heat pump installation Auburn and Opelika a smooth and easy experience.