Residential HVAC Rebates
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Residential HVAC Rebates: Incentives for Homeowners to Upgrade their Systems

Bring your home into the 21st century by upgrading to an energy-efficient HVAC system. Utility rebates and tax credits may make the project more manageable. This incentive program provides homeowners with a rebate based on the approximate energy savings from upgrades in single-family and multi-family dwellings. After reading this article, you can contact Diamondback Plumbing to schedule an appointment for your HVAC system concerns and installations.

Tax credits

There are several tax credits for energy-efficient HVAC systems and home improvement projects, unlike rebates, which must be claimed when filing federal income tax returns and may or may not appear as checks in your mailbox.

The Inflation Reduction Act of 2022 includes numerous significant amendments to tax credits and incentives available to homeowners for HVAC-related projects. For instance, as of January 1st, 2023, the 25C credit has been enhanced further for energy efficiency upgrades related to HVACs.

Credits such as these incentivize homeowners to upgrade to higher-efficiency equipment. But before making a purchase, homeowners must calculate the expected payback period, which measures when savings outweigh costs of new equipment purchased. An online calculator or an experienced contractor may help.


The federal Home Improvement Tax Credit will reward homeowners who make energy-efficient upgrades. It can be claimed for qualifying heating and cooling systems that meet specific SEER ratings and other criteria.

State-based rebate programs also exist to encourage homeowners to upgrade their HVAC equipment. One state-based program offered by National Grid gas customers provides insulation, air sealing rebates, and heat pump rebates to income-eligible homeowners.

Other incentives

Rebates are also available for whole-house energy upgrades like insulation, air sealing, and heat pump water heaters – with up to an ENERGY STAR(r) Home Improvement Tax Credit offering savings of up to $1600 on heat pumps alone; $840 can be saved with insulation/air sealing upgrades alone.

The Inflation Reduction Act of 2022 (IRA) reauthorized and enhanced the Internal Revenue Code 25C credit to incentivize purchasing energy-efficient HVAC systems. This credit offers homeowners a dollar-for-dollar reduction on their federal taxes up to certain limits; low-income households (those at 80 percent or below of state median income) qualify for 50 percent of this amount as credit relief.

Speak with a licensed contractor regarding incentives available for your home. Energy Star’s Rebate Finder also offers a comprehensive list of energy-saving rebates available by zip code; then apply through your power provider for this rebate program.

Contact us

Homeowners looking to upgrade their systems may qualify for rebates through local energy providers, manufacturers, and government programs to help offset some of the costs. These may include rebates from either source.

To find the ideal offer for you, contact a contractor with experience completing energy efficiency upgrades in your area. Many contractors will have been trained by or affiliated with specific product manufacturers (for instance, Mitsubishi-affiliated installers are readily available). To do your research effectively and quickly, check your options.

PSEG LI customers may also qualify for rebates for installing ENERGY STAR certified electric heat pump water heaters; this rebate cannot be combined with HEEHRA or HOMES rebate programs.

Article by

Alla Levin

Seattle business and lifestyle content creator who can’t get enough of business innovations, arts, not ordinary people and adventures.

About Author

Alla Levin

Hi, I’m Alla, a Seattle business and lifestyle content creator who can’t get enough of business innovations, arts, not ordinary people and adventures. My mission is to help you grow in your creativity, travel the world, and live life to the absolute fullest!


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