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Inflation Reduction Act

Inflation Reduction Act of 2022

In August of 2022, President Biden signed the Inflation Reduction Act into law, a comprehensive energy policy bill that has a record $369 billion reserved spending for climate and energy initiatives. This legislation offers several tax credits and rebates that reward homeowners for purchasing higher efficiency, ENERGY STAR®-certified and Consortium for Energy Efficiency-specified equipment.

 
What you need to know:
What kinds of tax credits and rebates are available to homeowners?

The Inflation Reduction Act of 2022 includes several tax credits for the installation of high-efficiency residential heating and cooling products. These credits include:

Nonbusiness Energy Property Credit (Tax Section 25C)

Effective January 1, 2023, this tax credit gives homeowners up to 30% of the total of product and installation costs. The installed product must meet Consortium for Energy Efficiency’s highest efficiency tier. Available Tax Credits are up to $2,000 for qualified heat pumps, and $600 for qualified air conditioners and furnaces. Annual credit limit resets every year.

 
Home Electrification and Appliance Rebate (HEAR)

* An income-dependent rebate to eligible homeowners.

Homeowners can receive:

- Up to $8,000 for all-electric heat pumps

- Up to $4,000 for electrical load service center upgrade

- Up to $2,500 for electric wiring

- Up to $14,000 maximum for all eligible measures

* Up to $8,000 for households less than 80% of Area Median Income and $4000 for 80-150% of Area Median Income

To help homeowners identify the median income in their area, visit Hud User.

This program will be administered by individual states, so the effective dates and funds available will vary by state. Homeowners are encouraged to check with their tax advisor for state announcements.

 
What equipment qualifies for the tax credits?

Eligible products include high-efficiency heat pumps that meet the following criteria:

Mini-Split Requirements:

  • SEER2 ≥ 16

  • EER2 ≥ 9.0

  • HSPF2 ≥ 9.5

  • COP 5°F = 1.75

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See a list of Westinghouse heat pump products that meet IRA standards here.

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We will be updating this page as more information becomes available.

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To see more on the IRA and access the IRA Savings Calculator please visit https://www.rewiringamerica.org/

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