The recently signed Inflation Reduction Act (IRA) offers significant tax credits and rebates that can help Miami Homeowners make energy-efficient home upgrades and lower your carbon footprint at the same time. If you’ve been thinking about an HVAC upgrade or heat pump for your home, you should know about these incentives that will help you:
- save money on monthly energy bills
- receive huge rebates and tax incentives
- have a cleaner, healthier indoor air environment
Read on to find out how Miami homeowners can reduce the energy they are using and save money in the long run by replacing inefficient AC systems and equipment.
Savings on heat pump and HVAC upgrades
The Inflation Reduction Act provides for tax credits that you can take advantage of when you make the change to an energy-efficient heat pump. Heat pumps also save the average American homeowner around $10,000 over 15 years.
Why heat pumps?
Heat pumps are a more energy efficient way to heat and cool your home than a combination furnace and air conditioning system, since they use just one piece of equipment. If you have a combination furnace and air conditioning system, consider opting for a heat pump for your home.
Tax credits and rebates
The Inflation Reduction Act includes tax credits and rebates that are available to Miami homeowners this year. Tax credits went into effect January 1, 2023 and rebates will be available for equipment and installation purchases later in the year.
Here are the tax credits that you may qualify for:
A heat pump system also offers certain advantages over other types of heating and cooling systems.
- It saves you money and space, since it is one unit doing the job of an air conditioner and a furnace.
- Heat pumps require a yearly system check. While you can do this on your own, we recommend having an HVAC professional from Direct Air come out and do an inspection.
- No fossil fuels are used to run a heat pump, so no fumes are released into the air. This is better for both the environment and your wallet.
If you don’t go with a heat pump, the latest air conditioners can save you significant money on your energy bill, in addition to reducing carbon pollution. Ask the HVAC pros at Direct Air what they recommend for homeowners in Miami. Give us a call at 786-875-3097.
IRA tax credit and rebates—how much can you save?
Energy Efficiency Home Improvement 25C Tax Credit
The 25C tax credit, also called the Energy Efficiency Home Improvement Tax Credit, has been increased to cover 30% of the total cost of new energy efficient qualified systems for 2023. All homeowners are eligible for this tax credit, which will apply when you file next year.
Installing a heat pump or upgrading your HVAC with Direct Air in 2023 means you will be able to deduct 30% of your total costs when you file your taxes next year. The total tax credit cap is $3,200 in tax credits, and the max for a heat pump is $2,000.
Important: Direct Air can advise you on the purchase and installation of HVAC equipment or heat pumps, but we cannot provide financial or tax advice. Please consult with a tax professional for questions about the 25C tax credit when filing.
Home Owner Managing Energy Savings (HOMES) Whole House Rebates
Another incentive from the Inflation Reduction Act is the Home Owner Managing Energy Savings (HOMES) rebate. This is a performance-based rebate, meaning that the more energy you save by making upgrades, the more money you get back.
All Miami homeowners qualify for the HOMES Rebate, but low- and medium-income households can save more. This program provides rebates based on the percentage of energy savings. This program is capped at $8,000 for low to middle income households earning less than 80% of area median income who cut energy use by 35%.
NOTE: The HOMES rebate cannot be combined with the HEEHRA Rebates (see below), but can be combined with the Inflation Reduction Act tax credits.
Contact Direct Air at 786-875-3097 to schedule an appointment and see how you can save money with a heat pump or other HVAC upgrade and have this rebate apply to you.
High-Efficiency Electric Home Rebate Act (HEEHRA)
The High-Efficiency Electric Home Rebate Act (HEEHRA) offers as much as $14,000 per year in discounts of purchases and installation for energy-efficient electrical projects. These discounts are capped at 50% of qualifying costs for a household that makes between 80% and 150% of area median income. If your household income falls below that threshold, HEEHRA covers 100% of qualifying costs up to $14,000. Find more details in the chart below.
You are allowed to claim both HEEHRA rebates and tax credits.
Funds for both of these rebates will become available later in 2023, depending on Department of Energy guidelines and Florida state implementation. Low-income households will receive larger and more accessible up-front discounts from HEEHRA than the HOMES rebate.
Give Direct Air a call at 786-875-3097 and schedule an appointment to see how you can upgrade your house and save with the HEEHRA or HOMES rebates.
Get answers to all your heat pump, HVAC, and Inflation Reduction Act (IRA) questions at Direct Air
The tax credits and rebates apply to the purchase and installation of heat pumps, HVAC upgrades, and many other energy efficient home upgrades. Let Direct Air help you choose the right system for your home and work with you on what IRA tax rebates apply. Contact us today at 786-875-3097 to make an appointment or ask us questions you may have about how you can take advantage of the Inflation Reduction Act.