
Here’s why Phoenix, AZ, property owners should care about the Inflation Reduction Act of 2022.
It’s an opportunity.
Signed into law in August 2022, the Inflation Reduction Act provides tax credits and rebates to encourage Arizona homeowners to replace older appliances with high-efficiency equipment that does a better job at a lower operating cost.
How to Take Advantage of the Inflation Reduction Act
Desert Diamond Air can help pinpoint areas in your home or business where you can save money and reduce your carbon footprint, allowing you to use the best tax credits and rebates.
HVAC Tax Credits Homeowners Can Claim
The Inflation Reduction Act extends and expands the existing Energy Efficient Home Improvement Credit (Section 25C) and the Residential Clean Energy Credit (Section 25D) to homeowners.
Projects installed between 2023 and 2032 quality for a 30 percent tax credit:
- Air Conditioners—Tax credit capped at $600
- Heat Pumps—Tax credit capped at $2,000
- Furnaces and Boilers—Tax credit capped at $600
- Geothermal Systems—Uncapped 30 percent tax credit on purchase and installation
- Solar Paneling—Uncapped 30 percent tax credit on purchase and installation
If you installed rooftop solar in 2022, it is eligible for the new 30 percent 25D tax credit. If you installed a heat pump in 2022, it is eligible for the old 25C tax credit, or 10 percent of costs up to $300.
Here is a closer look at heating, ventilation, and air conditioning (HVAC) products and eligibility requirements:
- All ducted air-source heat pumps with the ENERGY STAR® label qualify.
- Split air conditioner systems must have a Seasonal Energy Efficiency Rating 2 (SEER2) of 16 or more. All packaged systems with ENERGY STAR certification are eligible.
- Gas furnaces must have an annual fuel utilization efficiency (AFUE) rating of at least 97 percent.
- Gas boilers with an AFUE of at least 95 percent qualify.
- Oil-fueled boilers and furnaces must be capable of using fuel blends.
HVAC Rebates
The Inflation Reduction Act set aside a $4.3 billion budget, with the money allocated to individual states for disbursement. Funding will vary from state to state, and eligibility is income based.
For example, the High-Efficiency Electric Home Rebate Act (HEEHRA) covers 100 percent of electrification project costs (up to $14,000) for low-income households and 50 percent of costs (up to $14,000) for moderate-income households.
Here’s how some of those rebates would work:
- $8,000 for a heat pump for space heating
- $4,000 for an upgraded breaker box
- $2,500 for upgraded electric wiring
- $1,750 for a heat pump water heater
- $1,600 for insulation, air sealing, and ventilation
- $840 for an electric stove, cooktop range, or oven
- $840 for an electric clothes dryer
The rebate program is not available to all households. Because the funds are being allocated to state offices, and each state gets to decide to a certain degree how to distribute the money, it will take some time to implement the rebate program. Nor are the rebates retroactive to 2022.
The tax credits, in contrast, are in place right now and will continue to be for the next decade.
Buy Now and Save
Up-front costs are typically the biggest obstacle to upgrading your heating and cooling system. The Inflation Reduction Act of 2022 overcomes that barrier. Call Desert Diamond Air today here in the Phoenix, AZ, area at 602-362-4599 or request service online to learn more about how to save money.
Exciting News for Arizona Homeowners:
Save Big With New Energy Efficiency Rebates This Fall!
Great news for Arizona homeowners! Starting this fall, you may qualify for newly launched statewide rebate programs aimed at enhancing your home’s energy efficiency while helping you save significantly on energy costs.
Introducing Efficiency Arizona, a groundbreaking initiative from the Arizona Governor’s Office of Resiliency. This initiative’s new rebate programs are projected to save Arizona residents millions of dollars while making homes more energy-efficient and eco-friendly.
What Is Efficiency Arizona?
As part of the Inflation Reduction Act of 2022, Arizona received substantial funding to help homeowners adopt energy-efficient technologies. In response, new rebate programs are now being rolled out to the public, providing significant financial incentives for upgrading your home.
Efficiency Arizona includes two key rebate programs:
These programs are a fantastic opportunity to lower your energy bills while contributing to a more sustainable future.
When Will Efficiency Arizona Start?
Efficiency Arizona’s first phase, which focuses on replacing outdated air conditioning units for households facing financial hardship, has officially launched with the rollout of the HEAR Program. More phases will be introduced in the coming months. The opening of the HOMES Program is set to launch in early 2025.
Eligibility Requirements
Current eligibility for these programs is based on income thresholds set by the Department of Energy. If you qualify for programs like Medicaid, SNAP, or WIC, you may also be eligible for an Efficiency Arizona Rebate Program.
The HOMES Program
The HOMES Program provides performance-based rebates for whole-home energy-saving retrofits. Homeowners will be evaluated to determine program eligibility and a customized approach for their home’s specific energy needs. More information will be provided closer to this program’s launch date.
The HEAR Program
The HEAR Program offers rebates of up to $14,000 on qualifying electrification upgrades for low-income and underserved households.
Here is a breakdown of rebate-eligible projects:
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Type of Home Energy Project | Households below 80% AMI | Households between 80% and 150% AMI | Households above 150% AMI |
---|---|---|---|
Home Electrification Project Qualified Technologies. Only households with an income below 150% AMI are eligible*. | 100% of project costs up to $14,000 | 50% of project costs up to $14,000 | Not Applicable |
ENERGY STAR® electric heat pump water heater up to $1,750 | |||
ENERGY STAR® electric heat pump for space heating up to $8,000 | |||
ENERGY STAR® electric heat pump clothes dryer up to $840 | |||
ENERGY STAR® electric stove, cooktop, range, oven to $840 | |||
Electrical load service center (electrical panel) up to $4,000 | |||
Electrical wiring up to $2,500 | |||
Insulation, air sealing, ventilation up to $1,600 | |||
Total Potential Rebates | $14,000 |
*Homes with existing heat pumps are not eligible for the heat pump rebate.