Saving Money on Your System: A Guide to Rebates and Incentives


When you’re looking for a new air conditioning or heating system, it is important to factor in the total cost of ownership, not just the initial sticker price. Here are a few points to consider:

  • Higher efficiency units cost more, but can result in more rebates, incentives. While higher efficiency systems often are priced higher, they also tend to come with greater rebates and government incentives.
  • Government agencies and power companies want you to be efficient. Government agencies and power companies want to encourage the use of higher efficiency equipment to help reduce power consumption during the summer cooling season. That is the time which most often stresses the ability of the local power plant to keep up with demand.
  • Incentives are offered by federal, state or local governments and utility companies and change frequently. These often come in the form of direct rebates, tax credits or tax deductions and can total more than $1,000 per system, depending on your geographic location and the type of system purchased.

TIP: Incentives for air conditioners and heat pumps are generally tied to efficiency ratings and performance.  The efficiency of air conditioning systems in the U.S. is measured by Seasonal Energy Efficiency Rating or SEER. Heat pumps are measured by Heating Seasonal Performance Factor or HSPFA higher SEER or HSPF number signifies higher efficiency.

Is it worth it? When trying to decide if a higher efficiency system with incentives is worth the cost, it’s helpful to calculate the expected payback, or time required before additional efficiency savings cover the cost of the unit. Using an app, such as e-Saver™ to calculate your payback can make the process quick and easy. Your exact payback will depend on the system cost, amount of incentive, cost of electricity, and your regional climate.

Did you know you can search online for rebates and incentives? Some of the best sources of information we’ve found to help search and keep track of incentives are:

These websites are searchable databases that also contain a lot of valuable information on policies that support renewable energy and energy-efficiency.

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4 thoughts on “Saving Money on Your System: A Guide to Rebates and Incentives

  1. I thought I was eligible for a rebate from our utility company based on the SEER rating. However, my utility company told me that when they factored in my furnace, I was not eligible. I felt that the rebate guidelines on the form were, therefore, misleading. The guidelines said nothing about my furnace….

    • Hi Emily – I have not heard of that objection from utility companies before but each utility manages it’s own program. It might be worth calling them back to see if you can get something for just the AC efficiency.

  2. Yeah. This information is very helpful. A new, energy efficient central air conditioning unit is also something which adds to the value of your home. Rebates are offered by the manufacturers and retailers of air conditioning systems in order to encourage homeowners to upgrade to newer, more energy efficient central air conditioning units. Not only are there rebates and incentives available from utility suppliers and manufacturers for homeowners who decide to purchase a new air conditioning system, the federal government can also help to effectively lower the cost of this purchase. It is good to consult the professionals like to take the advice.

  3. Than you. I am a 76 year old retiree on a limited income. I’ll have to go with a window unit with no rebate. Your info was very helpful.

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