Every homeowner, from Virginia Beach to Williamsburg and everywhere in between is eager to improve their home’s efficiency. We all know that the more energy efficient our home’s appliances and systems are, the lower our home utility bills become. If you have an aged HVAC or water heater system that is working harder than it should, it could be costing you dearly. Not only are these aged systems a big waste of energy rising your utility bills, the cost to maintenance and constantly repair adds up. If you have an outdated system and are looking for a more energy efficient and money-saving option, it’s time to call Smith & Keene.
Now is a great time to invest in your home’s energy efficiency. Thanks to the Inflation Reduction Act of 2022, there are several tax credits that homeowners in Tidewater and on the Peninsula can take advantage of. That means you could be saving money on your utility bills with a more energy efficient home system AND receive tax credits to help underwrite the cost of upgrading your system and maybe even receive rebate funds too! Following is a breakdown of the eligible tax credits and rebates you may be able to claim when you make energy efficiency upgrades to your home.
HVAC Related Tax Credits and Energy Efficiency Rebates
When you are looking to improve your home’s energy bills, you will get the most bang for your buck by improving your home’s HVAC system. Dominion Energy claims that almost half of homeowner’s energy bills are from heating and cooling systems each year. Improving your HVAC system’s energy efficiency can make a big impact on your utility bill.
Smart Thermostat Rebates
If you haven’t already, updating your HVAC thermostat to a Smart Thermostat is a low-investment method to improve your home’s energy efficiency. Smart thermostats allow you to control the temperature setting in your home more conveniently over your home’s WiFi.
Learn more about upgrading your home thermostat.
When you purchase and install an eligible ENERGY STAR® certified smart thermostat, you could get a rebate of up to $30. Eligible product manufacturers include: Ecobee, Emerson, Google Nest, Amazon Smart Thermostat, and Honeywell Home. There are limitations such as a limit of two rebates per household for different smart thermostats.
Learn more about how to receive a one-time rebate on the installation of a qualifying EnergyStar smart thermostat.
You may also be eligible for additional savings if you enroll in Smart Thermostat Rewards Program or the WeatherSmart SM Program through Dominion Energy.
Heat Pump Tax Credits
For the most part, all ducted heat pumps with an Energy Star certification are eligible for tax credit. There are some certified ductless mini split systems with SEER2 > 16, EER2 > 12 and HSPF > 9 which are also eligible.
There are heat pump models that have earned an Energy Star Cold Climate designation ducted systems with EER2 > 10 which are eligible, and mini-splits with SEER2 > 16, EER2 > 9, and HSPF > 9.5 which are eligible. The general tax credit amount you can claim for a qualifying energy efficiency heat pump is 30% of the cost of the project with a maximum amount of $2,000 in tax credits. Learn more about heat pump tax credits.
Central Air Conditioner Tax Credits
While all Energy Star certified central air conditioners are eligible for a tax credit, Energy Star split systems with SEER2 > 16 are also eligible. . The general tax credit amount you can claim for a qualifying energy efficiency central air conditioner is 30% of the cost of the project with a maximum amount of $600 in tax credits. Learn more about heat pump tax credits.
Furnace Tax Credits
Energy Star certified gas furnaces with AFUE > 97% are eligible for a tax credit. There are some Energy Star certified oil furnaces that use certain fuels that are also eligible for tax credits. The general tax credit amount you can claim for a qualifying energy efficiency furnace is 30% of the cost of the project with a maximum amount of $600 in tax credits. Learn more about furnace tax credits. There are also rebates available of up to $400 per unit from Columbia Gas of VA on qualifying high-efficiency natural gas furnaces and boilers.
Water Heater Tax Credits
Energy Star certified gas storage water heaters are eligible for a tax credit. The general tax credit amount you can claim for a qualifying energy efficiency heat pump water heater is 30% of the cost of the project with a maximum amount of $2,000 in tax credits. Learn more about heat pump tax water heater tax credits.
Energy Star certified heat pump water heaters > 0.81 UEF for tanks less than 55 gallons and > 0.86 UEF for tanks greater than or equal to 55 gallons are eligible for a tax credit. Tankless gas water heaters with Energy Star certification models with > 0.95 UEF are eligible for tax credits. The general tax credit amount you can claim for a qualifying energy efficiency gas storage water heater or tankless gas water heater is 30% of the cost of the project with a maximum amount of $600 in tax credits. Learn more about heat pump tax water heater tax credits here.
Thinking of Going Tankless?
Check out our blog outlining the benefits of installing a tankless water heater.
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Tax Credit Limitations
There are limitations to the amount and number of tax credits you can apply for. There is a general annual aggregate limit of energy efficiency tax credits you can claim in one year. The amount of the credit is equal to 30% of the sum of amounts you pay for certain qualified expenditures. To take full advantage of your home efficiency tax credit, spread your home efficiency upgrades across several years. The tax credits are available through 2032, giving you ample time to upgrade several areas of your home’s energy usage and take full advantage of these new tax credits. Here is more information on qualified energy efficient tax credits from the IRS.
CALL THE HEATING & COOLING EXPERTS
If you are looking to improve your home’s energy efficiency while taking advantage of these rebates and tax credits to upgrade your home’s HVAC or water heater system, contact Smith & Keene. Our team of highly trained Home Energy Experts can guide you on selecting the optimum HVAC system for your home. We can help you find the most energy-efficient system to lower your monthly utility bill, working within your budget and needs.