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How To Take Advantage of Home Energy Tax Credits in 2023


Making your Grand Rapids home more energy-efficient can directly affect your utility costs. With the valuable federal tax credits and rebates, it is easier than ever.

Thanks to the Inflation Reduction Act of 2022, the Energy Efficient Home Improvement Credit and the High-Efficiency Electric Homes and Rebates Act (HEEHRA) have been extended to 2032. If you are considering replacing your heating system, air conditioning system, and appliances, there is a good chance that you can save money through one of these programs.

Who Qualifies for Energy-Efficiency Rebates?

The energy-efficiency rebates and tax incentives provided by these programs are only available for existing homes that are the primary residence of the homeowner and not for rentals or new construction. Other tax credits and incentives are available for commercial buildings and home builders.

If your household income is between 80% and 150% of the annual median income for your area, you can save up to 50% off the equipment price and installation costs for home efficiency upgrades.

And if your income is less than 80% of the AMI, the rebate can cover up to 100% of the equipment price and installation costs. These rebates are available at the point of sale, meaning the discounts are available at or soon after installation instead of waiting for tax credits at the end of the fiscal year.

What Equipment Is Included in the Energy Efficient Home Improvement Tax Credits?

The Energy Efficient Home Improvement Tax Credit can provide up to a 30% credit of the total costs of upgrades with a maximum credit of $1,200 per year for most systems. To qualify for the credit, the equipment must meet the following standards:

  • Central air conditioners16 SEER or higher is required for split systems. 15 SEER or higher is required for packaged systems.
  • Gas furnaces: 95% AFUE or higher is required.
  • Gas boilers: 95% AFUE or higher is required.
  • Air source heat pumps: 15 SEER or 8.5 HSPF or higher is required for split systems. 14 SEER or 8 HSPF or higher is required for packaged systems. A $2,000 maximum annual credit is available for heat pumps.
  • Gas water heaters0.82 UEF or 90% thermal efficiency or higher is required.
  • Electric water heaters: 2.2 UEF or higher is required. A $2,000 maximum annual credit is available for heat pump water heaters.

Can You Combine Energy-Efficiency Tax Credits and Rebates?

If your household income is within the required range of the HEERA program, and your equipment qualifies for the tax credits available under the Energy Efficient Home Improvement Credit, you can qualify for both discounts. However, most households will qualify for only one of the programs.

To maximize your savings, choose upgrades that qualify for both programs, such as:

  • Heat pump water heaters: Maximum rebate of $1,750
  • Heat pumps for heating and cooling: Maximum rebate of $8,000
  • Electric stoves, cooktops, ranges, or ovens: Maximum rebate of $840
  • Heat pump clothes dryers: Maximum rebate of $840
  • Upgraded electrical panels: Maximum rebate of $4,000
  • Insulation, air sealing, and ventilation upgrades: Maximum rebate of $1,600
  • Electric wiring upgrades: Maximum rebate of $2,500

Choose Grapids Home Services for HVAC & Water Heater Replacement in Grand Rapids, MI

Are you looking forward to upgrading the HVAC system and water heater in your Grand Rapids home? Make sure you get the ideal furnace, boiler, air conditioner, or water heater for your budget by working with our team at Grapids Home Services.

We can determine your comfort requirements, recommend the best equipment for your needs and budget, and maximize your savings by installing systems that qualify for any applicable tax incentives and rebates.

Our family-owned company has served Grand Rapids for over 20 years. Choose our team for:

  • Free estimates on replacements
  • Upfront pricing
  • Financing options
  • 100% satisfaction guaranteed
  • And more

Get started with your HVAC replacement in Grand Rapids today. Call (616)-453-1099 or contact us online to schedule service with Grapids Home Services.

We Are Here for You! Contact Us Today.

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