There is no perfect time to invest in upgrading your home’s heating and cooling system. The right time is when you decide it is, so if you’re ready to increase your home’s energy efficiency and electrify your home’s heating and cooling system, we can help you install and upgrade your system and find ways to save with energy tax credits, tax rebates, and utility rebates.
How to Save on Home Electrification
Energy tax credits and tax rebates are available and at an all-time high, but figuring out which credits and rebates are right for you can feel overwhelming. We get it, and it’s why we’ve broken it all down, so you can easily see what’s available to you at the federal, state, and local levels.
- Local Level: Xcel and other utility companies offer rebates to customers on energy efficiency and electrification upgrades, including Geothermal Systems, Air Source Heat Pumps, and Mini-Splits.
- State Level: In 2023, the State of Colorado began offering a 10% sales tax credit for all heat pumps that met the required energy efficiency ratings, including Geothermal Systems, Air Source Heat Pumps, Mini-Splits, and Heat Pump Water Heaters.
Note: Colorado sales tax credits are different than federal income tax credits, so ask your SHC consultant for more details.
- Federal Level: The Inflation Reduction Act provides upfront discounts to qualifying individuals as well as tax credits to anyone doing energy-efficiency home upgrades. These federal tax credits can be bundled with state tax credits for additional savings!
Available Energy Tax Credits vs. Tax Rebates
Some energy tax credits are offered as a percentage of the total cost of the project. For example, households installing a geothermal system are eligible for a 30% income tax credit. If you’re interested in learning more about available energy tax credits, you can find more information through the IRA.
Tax rebates, on the other hand, are available to qualifying individuals through the High-Efficiency Electric Home Rebate Act (HEEHRA). To see if you qualify for a tax rebate discount, you can use the IRA Savings Calculator.
Additional Home Savings to Know About
If you’re interested in saving on a new or upgraded heating and cooling system, here’s what you should keep in mind whether you’re looking at a Geothermal System or Air Source Heat Pump.
- Geothermal Systems: You want to make sure to plan ahead when it comes to geothermal, as drilling companies often book out ahead of time. We strongly recommend that you get an energy audit to help maximize your energy savings and you might even want to consider solar panels as new regulations in Colorado encourage them and they can help to generate electricity, maximize heating and cooling, and help you save long-term.
- This is where you can also take advantage of tax rebates, tax credits and incentives, and financing opportunities. There is a 30% federal tax credit on residential ground source heat pump installation that is available through 2034.
- Air Source Heat Pumps: Similar to Geothermal Systems, Air Source Heat Pumps (ASHPs) can be used with solar panels to maximize your energy efficiency and savings. ASHPs reduce heating and cooling expenses, deliver up to 3x more heat energy, and can be up to 350% more efficient than traditional HVAC systems, helping you save.
- You can also save when it comes to ASHPs with rebates, rewards, and financing opportunities through our partnership with Xcel Energy, as well as find financing through RENU, a program backed by the State of Colorado.
Did we cover everything you needed? If you still have questions about saving on a new heating and cooling system, we’re here to help you find ways to become more energy efficient today.
Get in touch with our Sensible team today, and let us help!
About Sensible Heating & Cooling
For us, Sensibility is a way of life. Our form is function, and we want to equip you with the right information so you feel empowered to make the right decisions for your home. If you want to work with a premier heating and cooling company that you can trust, you want Sensible.
To learn more about our services and to take our virtual estimate survey, contact us today.
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