Energy efficiency at the household level is one of the concerns of the federal government, through the EPA. Thus, the new Central Air Conditioners Tax Credit has been announced, which will give you up to $600 just for installing this technology at home (and stop suffering extreme heat in summer, all said and done). We tell you everything you need to know to take advantage of this opportunity in the form of a sustainable program.
This is the Central Air Conditioners Tax Credit: Government publishes new subsidy
The U.S. government recently passed new legislation that provides homeowners with tax credits for installing energy efficient central air conditioning systems. This tax credit aims to encourage homeowners to upgrade older, inefficient AC units to newer systems that meet strict energy efficiency guidelines.
The credit applies to central air conditioner installations completed in 2022 and 2023. Homeowners can receive up to $600 back on their taxes per unit installed. This tax credit lowers the upfront costs of installing a new high-efficiency central air system, ultimately saving homeowners money.
Central air conditioners must meet or exceed current federal minimum standards for efficiency set by the Department of Energy to qualify for the tax credit. Air conditioners that just meet the minimum standard are eligible for a $50 – $300 tax credit depending on the type of system.
Here’s how to find out if you are eligible to apply for this subsidy: the requirements, unveiled
To qualify for the tax credit, the central air conditioning or heat pump system must meet certain energy efficiency criteria set by the government. Specifically, the new unit must have a minimum seasonal energy efficiency ratio (SEER) of 16 or greater and an energy efficiency ratio (EER) of 13 or greater.
Split systems, which combine an outdoor condenser and evaporator coil with an indoor air handling unit, must have a SEER rating of at least 16. Packaged units, where the evaporator, condenser and blower are all located in one cabinet, must have a SEER rating of at least 14.
In addition, the new air conditioner or heat pump must replace an existing system in the home. Simply adding cooling to a previously uncooled home does not qualify. The tax credit applies to the cost of installing a more efficient central air conditioner or air source heat pump, not maintenance or repairs.
These are the efficiency ratings of the Central Air Conditioners Tax Credits
Air conditioners are rated for efficiency using Seasonal Energy Efficiency Ratio (SEER) and Energy Efficiency Ratio (EER). SEER measures how efficiently an AC unit performs throughout an entire cooling season. The higher the SEER, the more energy efficient the unit is. EER measures how efficiently the AC performs at peak temperatures.
The minimum SEER rating to qualify for the tax credit is 16 SEER for split central air conditioners and 18 SEER for packaged central air conditioners. Split systems have the condenser and evaporator in separate units, while packaged systems have all components in one outdoor cabinet.
Higher SEER ratings translate into lower electricity bills in the long run. For example, upgrading from a 10 SEER to 16 SEER unit can reduce cooling costs by up to 30%. However, the higher initial cost of more efficient units means it takes 3-5 years to recoup the investment from energy savings. This tax credit helps offset the upfront cost.
As you have seen, the new Central Air Conditioners Tax Credit is aimed at increasing the energy efficiency of properties, given that the age of most of them is becoming increasingly worrisome. In any case, it is a project aimed at ensuring sustainability in construction in the face of extreme heat, the main objective according to the federal government itself.
