Tax Credits & Rebates



The most economical way to heat and cool your home year-round is with a
high-efficiency heat pump. Customers who convert from natural gas to a 15 SEER
or higher heat pump can qualify for a $400 rebate, plus enjoy up to $300 in annual
energy savings.

Purchasers of highly efficient heating, cooling, and water heating equipment can take tax credits of up to 10% of the cost of qualifying equipment. These credits are available for systems placed in service from January 1, 2012 through December 31, 2013.The credit is limited to $50 – $500 dependent on the product type.  See equipment descriptions below for more details.

What are the efficiency requirements to qualify for the credits?

Manufacturers and retailers should be able to help you tell whether a specific product qualifies.
The qualification specifications are:

  • Furnaces and Boilers: From January 1, 2012 through December 31, 2013: Natural gas & propane furnaces must meet an Annual Fuel Use Efficiency (AFUE) 95 or higher, oil furnaces and gas, oil and propane boilers must meet an AFUE of 95 or better. In addition, the credit covers costs up to $150
  • Central Air Conditioning Units: Until December 31, 2013: Central air conditioning units and air-source heat pumps must meet the highest tier standards set by the Consortium for Energy Efficiency (CEE), which in most cases requires a Seasonal Energy Efficiency Ratio (SEER) of 16. SEER measures performance throughout the cooling season. More information on the CEE specification. The credit covers costs up to $300

Where must the equipment be used?

Under guidance issued by the IRS, equipment is eligible if installed in a home occupied by a taxpayer as their principal residence at the time the equipment is installed. This implies that equipment in new homes is generally not eligible since in new homes equipment is generally installed prior to occupancy. However, efficient equipment in new homes can help that home qualify for the new home tax credit.

What do I need to do to qualify for the incentives?

Under the IRS rules, manufacturers need to cert
To apply for the incentive, use IRS form 5695. Please note that this version of the form is for 2008, and so does not include line items for the incentives discussed on this page. There will be a section for these incentives on the 2009 iteration of the form which will likely be available in late 2009 or early 2010.

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