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You May Qualify for Federal HVAC Rebates and Tax Credits

It’s no secret that modern heating and AC units cost a pretty penny. When you decide to upgrade the HVAC in your O’Fallon, MO home, it is a large investment. Even if you take advantage of a company’s financing, the expense is still considerable. Long-term savings from lower energy usage eventually offset these costs, and while you’re waiting, you can find a slew of federal tax credits and rebates for new HVAC equipment.

At Hoff Heating & AC, we want you to be as informed as possible in terms of your HVAC options. The government frequently adds incentives to reward you for going green. To help you navigate this topic, we have created this guide that illustrates various benefits for homeowners.

The Energy Efficient Home Improvement Credit (25C)

The most accessible benefit you’ll likely find is the 25C, short for the Energy Efficient Home Improvement Credit. Recent legislation has reauthorized and expanded this credit. Specifically, it credits you with a percentage of your equipment costs to reduce your federal income tax. Your equipment just has to meet current energy-efficient standards. Unlike a deduction, a credit does not lower your taxable income. Instead, a credit gives you a 1:1 match for your tax liability. You can claim up to 30% for project costs on qualifying upgrades.

The stipulations include:

• Annual aggregate limit of $3,200
• Up to $2,000 per year for electric or natural gas heat pumps
• Up to $600 for high-efficiency central air conditioners
• Up to $600 for qualified furnaces and hot water boilers

The total annual limit is $3,200, but that’s still a pretty big credit for improvements. It drastically lowers your net HVAC expense. Just be sure your equipment meets the Consortium for Energy Efficiency (CEE) requirements to qualify. We can help you learn about the requirements.

Federal Tax Credits for Heat Pump Installation

Because they use a lot less electricity to transfer heat, heat pumps have become the gold standard. They’re also two-in-one units, providing both heating and cooling, so the government offers incentives for installing them. The specific 25C credit for heat pump installation is 30% of the installation and equipment cost, up to $2,000.

You can combine this with other qualifying upgrades, like sealing your ducts. You can mix and match here to potentially reach that higher $3,200 combined limit. At Hoff Heating & AC, we have seen how these credits make the transition to electric heating and cooling much more affordable. We can help you select a model that meets the rigorous efficiency standards the government requires.

High-Efficiency Electric Home Rebate Act (HEEHRA)

Taxpayers claim tax credits and deductions when they file their annual returns. Rebates, however, act a bit differently. The High-Efficiency Electric Home Rebate is a point-of-sale program. This means that low-to-moderate-income households can receive money directly back on their purchase. The HEEHRA is not a federal incentive; individual states control it.

For qualifying households, these rebates can cover a massive portion of the purchase price, often up to $8,000. Some eligible upgrades under this program include:

• Heat pump installation
• Electric load service center upgrades
• Insulation, air sealing and ventilation
• Electric wiring improvements

The goal of the HEEHRA is to give more people electric HVAC options. The retailer may apply the discount at the time of purchase, saving you money like a coupon. In other cases, you get a refund of the rebate amount shortly after purchase. Also, keep in mind that this rebate varies from state to state. In Missouri, specifically, the HEEHRA covers ENERGY STAR heat pumps for up to $8,000 point of sale. This means if the total price is $11,000, you pay only $3,000 if you qualify based on income. That’s a huge incentive to upgrade.

Local Utility Rebates and Manufacturer Incentives

People typically hear more about federal tax credits, but they’re only a single avenue. Rebates for the HVAC world have multiple roads. Local utility companies in Missouri, for instance, often offer their own rebates. The cool thing here is that you don’t have to decide between rebates; you can combine them.

The Ameren Missouri Heating and Cooling Program and Pay As You Save (PAYS) program offer incentives. You can receive up to $900 on air source heat pumps and up to $1,800 on geothermal models. Central ACs can get you up to $700. Smart thermostats carry a $100 rebate. Dual-fuel heat pumps offer a rebate of up to $2,000. You can find similar rebates with Energy Missouri, Liberty Utilities (Missouri Gas), Spire and other companies. There are plenty of programs out there to help offset costs.

Even we get in on the action here by offering various deals and discounts. We recommend checking our current specials to see the deals we’re currently offering for our community.

Maximizing Your Return on Investment

The idea here is that you should be able to get a good return on your investment (your HVAC system). Not only can you combine rebates and save, but you also save over time. Newer HVAC units have better energy efficiency ratings, so you pay less to run them. In our area, summer humidity and winter chills can be extreme. This means your HVAC system runs a lot during peak season. Being able to lower your energy bills by 20% to 40% over time is a huge win.

To ensure you get the most out of your investment, consider the following:

• Professional sizing and load calculations
• Ductwork inspection and sealing
• Programmable or smart thermostat integration
• Regular, scheduled maintenance
• Highly rated HVAC systems
• Home weatherization fixes

Transforming your home into a solid thermal envelope means you won’t have to run your HVAC system as much. The conditioned air stays in the home, plus you stay comfortable for a longer time. Proper sizing is also absolutely critical for true energy savings. A system that is too big for the home will short cycle and promote wear and tear. Starting up constantly uses more energy, and breaking down means steep repair costs. Likewise, an appliance that is too small will run too often. This gives you the same problems. We can match you with an ideal system based on the calculations of your specific home.

Selecting a Local Expert for Your Upgrades

As a trusted HVAC contractor, Hoff Heating & AC is committed to providing true home comfort. We believe that everyone should be able to get the best systems on the market. Along with the many rebates and credits you can take advantage of, we offer fast, flexible financing on approved credit. We’re a full-service HVAC company that offers maintenance, repairs and replacements for a range of brands and models. Our goal is to keep your home as comfortable as possible.

No matter what sort of upgrade you’re looking into, it’s always best to turn to the professionals. Our certified technicians perform proper load calculations to ensure your HVAC system is properly sized. We also deal with the latest heat pump technologies on the market. This two-in-one appliance is a government favorite for solid credits and rebates. When it’s time to upgrade, Hoff Heating & AC is ready to handle the job.

Contact Hoff Heating & AC today for more information about credits and rebates in O’Fallon.