Heat pumps are some of the most energy-efficient solutions for keeping your home cool in summer and warm in winter. Not only do they help lower your monthly electricity bill, but they're also more compact and easier to install than conventional heating and cooling systems.
In addition, right now the Inflation Reduction Act provides rebates of a maximum of $8,000, making it even more affordable than ever. What are you waiting for? Get in touch with the comfort specialists at Contra Costa Heating & AC to schedule your heat pump installation in the Bay Area.
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. An increasingly popular strategy is funding green technology and making efficient, eco-friendly home improvements more affordable.
You can earn these rebates and tax credits when you purchase energy-efficient systems like heat pumps. There has never been a better time to go green!
How Will the Inflation Reduction Act Influence My Energy Costs
The Inflation Reduction Act keeps utility costs lower 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 main options for saving money. 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 heat pump rebate available from the Inflation Reduction Act is for low-income and moderate-income homeowners. Your rebate can cover the entire 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 conditions are:
- Low Income: Less than 80% of the area median income
- Moderate Income: 80-150% of the area median income
Not sure which income category you're in or what the average income is in your area? The nonprofit group Rewiring America has an online calculator you can use to find out. All you need is 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. With the option to recoup up to 30 percent after the purchase or installation of a heat pump, the heat pump tax credit is worth a maximum of $2,000.
Distinct from the rebate, which is used immediately during your initial purchase, the tax credit is received once you have filed your taxes.* Hold onto the 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
What 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 minimum, a heat pump must have ENERGY STAR® certification for the rebate or tax credit to apply. Ask for more information from our team at Contra Costa Heating & AC.
How Do I Get the Inflation Reduction Act Rebate
For qualifying homeowners, the heat pump rebate in the Inflation Reduction Act is available when you purchase the heat pump. You get it straightaway as it is subtracted from the price of purchase and installation of the heat pump. You don't have to send in a proof of purchase or wait for a rebate to come later.
The Inflation Reduction Act heat pump tax credit, alternatively, must be received after you file taxes.* It reduces the total amount of money you owe to the IRS once you file taxes.
*Consult with a tax professional for full details on how to apply
Call Your Local Pros at Contra Costa Heating & AC for Details About the Inflation Reduction Act Heat Pump Rebate and Tax Credit
With the energy efficiency of a brand-new heat pump, you can save money and protect the environment courtesy of tax credits and rebates from the Inflation Reduction Act. Contra Costa Heating & AC is happy to help you navigate the details on these discount programs so you get maximum savings! We're ready and able to help make your next heat pump installation the Bay Area a stress-free experience.