Heat pumps are ideal for homeowners who want to significantly reduce energy use, lower emissions, and improve their home comfort levels. Although heat pumps can be costly compared to central air conditioners and furnaces, thanks to the IRA, more homeowners will be able to purchase one. These incentives only apply to purchases made after January 1, 2023, and these programs will last through January 1, 2033.
HEEHRA provides either rebates or tax credits on the purchase of eligible ducted or ductless heat pump systems. The benefits that are available via HEEHRA are dependent on household income.
- Low-income households: Eligible for a 100% rebate up to $8,000. A low-income household earns less than 80% of an area’s median family income.
- Moderate-income households: Eligible for a 50% rebate up to $8,000. A medium-income household earns 80% to 150% of an area’s median family income.
- High-income households: Eligible for a 30% tax credit up to $2,000.
In 2022, the median household income for Phoenix was about $74,568.
Under HEEHRA, homeowners can also receive a rebate of up to $1,750 by upgrading to a heat pump water heater.
While HEEHRA offers upfront rebates, HOMES offers performance-based incentives that are based on your home’s actual energy savings AFTER installation. For moderate and high-income households, the maximum rebate is $4,000. Low-income households can receive up to $8,000. The contractor will need to demonstrate energy efficiency savings in order for the homeowner to qualify.
25C Tax Credit
The 25C Tax Credit Program provides a capped 30% tax credit for home improvements that will increase your home’s energy efficiency. ENERGY STAR® certified heat pumps, heat pump water heaters, and energy audits are all eligible.
Ductless mini splits also qualify. They must be ENERGY STAR® certified or have a SEER2 rating of at least 16, an EER2 rating of at least 12, and an HSPF2 rating of at least 9.
Although HEEHRA and HOMES benefits can’t be combined with one another, a major benefit of the 25C Tax Credit is that it can be combined with either HEEHRA or HOMES. Also, this credit resets every year with a maximum of $3200 annual tax credit on home improvements.
- Heat pumps and heat pump water heaters are eligible for 30% of the purchase and installation costs or up to a $2,000 tax credit
- Central air conditioners are eligible for a $600 tax credit
- Gas furnaces are eligible for a $600 tax credit
- Home energy audits are eligible for a $150 credit
APS and SRP Incentives
APS and SRP offer rebate programs to Phoenix, AZ homeowners. These local incentives can be combined with IRA benefits! These benefits are available to SRP customers:
- Up to $1,125 on a new energy-efficient AC
- Up to $500 on a new ENERGY STAR® certified heat pump water heater
- Up to $100 on smart thermostat installation
- Up to $400 on duct repairs
- Up to $100 on home energy audits
APS is offering a $200 rebate when you replace your old or broken air conditioner with a new one. To qualify, a participating contractor will submit the rebate form. The new AC unit must be:
- An energy-efficient unit with a minimum of 14.3 SEER2
- Purchased on or after January 1, 2023
- Up to a max of five units per home
Are you ready to upgrade your home with energy-efficient systems? To maximize your savings, schedule an appointment with AZ Perfect Comfort Heating & Cooling today!