Saving Money On Your HVAC System

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Couple looking over paperwork on how they can save money on their energy bill

Originally published on April 18, 2017

A Guide to AC and Heating Rebates & 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 HSPF.  A 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.

Discover the finance options for your new HVAC system here.

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50 thoughts on “Saving Money On Your HVAC System”

  1. I had my furnace tune-up by Liberty and received a coupon to receive a $25 Visa gift card. This is the website listed on the coupon.

    I found no guidelines on how to receive the gift card, Please advise.

    Reply ↓

  2. I applied for a rebate on my highly efficient Amana HVAC last Feb (2017). I live in MA. I called last month and was told that my rebates were sent to Crystal St in Washington state. I asked to have the checks re-issued. I have never received a dime. Perhaps the checks were sent to Tierra Del Fuego this time? Has anybody ever received a rebate??? Does this program get incentives to send checks to undeliverable addresses? The person that I spoke to had my correct address. Has the Attorney General’s office been made aware of these scam programs as yet??? I am retired and on a fixed income. I was bamboozled in to purchasing a unit well above my means with the promise of a rebate.

    Reply ↓

    • We recommend contacting the number listed on the rebate forms that were submitted to see if they can locate where your rebate was sent to.

      Reply ↓

  3. Just installed a new HVAC unit–Rheem–RA1460AJ1 and RH1T6021STAN. Do either of these units qualify for energy rebates or tax credits? Thank you

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    • Based on our search of the AHRI database with your unit information, (www.ahridirectory.com) the highest rated SEER combination we found was 14.5 and this does not qualify for federal rebates but we recommend visiting your local utility website to see if it qualifies for anything they are offering.

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  4. I purchased a heat pump system with new electric furnace for $10,000. HVAC contractor says mfg. houses don’t qualify for rebates. Power company says I need AHRI certification. I didn’t know any of this when purchasing system. What do I need to do get AHRI certification? And shouldn’t the HVAC contractor have some ethical obligation to explain requirements for receiving rebates on their systems? I thought $10,000 was enough assurance of a legit system. Guess you should never trust anyone or any company without it all in writing. $10,000 too late for me now. Hope this alerts the next buyer.

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    • I had installed this past May a geothermal closed loop whole house heating-cooling system from Waterfurnace. Does this qualify for any type of energy credit?

      Reply ↓

    • We recommend using http://www.ahridirectory.com to download the equipment AHRI documents. You can typically use the utility website and submit your rebates directly if your equipment qualifies for the prescribed rebates.

      Also, the “Residential Energy Credits” (federal tax credit) for qualifying equipment was predated to 1/1/2017 and active through 12/31/2018. You can download IRS form 5695 and instructions to submit it with your taxes.

      Reply ↓

  5. I am on propane gas and RG&E electric. I just purchased a new Amana 96 energy efficient ,2 stage furnace and a new Amana A/C. Are there any energy rebates in this scenario?

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  6. We just purchased an energy star EL296 2017 lennox furnace and want to know much of a federal tax credit we can receive.

    Reply ↓

    • You can visit dsireusa.org which is a database of state incentives and rebates for renewables and efficiency products.

      Reply ↓

  8. 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….

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    • 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.

      Reply ↓

  9. 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 http://allweekairconditioning.com/ to take the advice.

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  10. 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.

    Reply ↓

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