The 2022 Inflation Reduction Act: What You Need to Know
As a homeowner in Miami, Homestead, or Doral, FL, you may be wondering how the 2022 Inflation Reduction Act will affect you. Dade Super Cool is here to help you navigate this new act and make the best decision for your home and budget.
This piece of legislation covers a wide range of initiatives, including healthcare costs, clean energy, and the federal deficit. However, one aspect that may be of particular interest to you is the inclusion of incentives for installing high-efficiency home heating and cooling products.
Here's What You Need To Know
The Inflation Reduction Act is a bill that was signed into law by President Biden in August of 2022 after being passed by both the House of Representatives and Senate. It includes a number of provisions aimed at reducing inflation, including the extension and expansion of existing 25C and 25D tax credits for homeowners. These credits are available for systems installed in 2022, and have increased in 2023.
What Are The Efficiency Requirements For The 25C and 25D Tax Credits?
To qualify for the 25C and 25D tax credits, your HVAC equipment must meet certain efficiency requirements. These requirements for 2023 are outlined below:
25C Tax Credit:
- Air conditioners: 16 SEER2
- Heat pumps: 16 SEER2 / 12 EER2 / 9 HSPF
- Furnaces: 95% AFUE
- Boilers: 95% AFUE
25D Tax Credit:
- Biomass stoves: 75% thermal efficiency
Are The Tax Credits Retroactive?
Yes, the 25C and 25D tax credits apply retroactively to qualifying products installed beginning on January 1, 2022. However, the requirements for air conditioners and heat pumps differ than what’s listed above, and the amount has significantly increased for these tax credits in 2023. With these changes, it’s important to stay up-to-date on the latest information.
What Other Incentives Are Included In The Inflation Reduction Act of 2022?
In addition to the 25C and 25D tax credits, the Inflation Reduction Act of 2022 also includes a rebate program for homeowners who install high-efficiency HVAC equipment. Funds for this program will be allocated to state energy offices, which will have some discretion on how they are used.
However, it’s important to note that rebate programs may take some time to get implemented, and funding allocations will vary from state to state. As soon as we have the information for Florida, we’ll let you know which systems are eligible for the AC and heat pump rebates in Miami, Homestead, or Doral, FL.
Additionally, the rebate program will not be available to all households. Households earning less than 80% of the median income can qualify for the full benefit, while those earning between 80% and 150% of the average median may be eligible for a partial (50%) benefit. It’s also worth noting that rebates are subject to availability, as the funds are capped and may run out before the ten-year period is over.
A second rebate program under the Inflation Reduction Act is for reducing your energy consumption. You can receive up to $8,000 for reducing your usage by 35%; less if you are a mid- or high-income household.
What To Consider When Deciding Whether To Upgrade To A High-Efficiency HVAC System?
While the incentives included in the Inflation Reduction Act of 2022 may make upgrading to a high-efficiency HVAC system more attractive, it’s important to consider this decision with a measured approach. These rebate programs will take time to develop and will be subject to availability. Therefore, it may be worth waiting before making a decision on whether to upgrade your HVAC system.
It’s also important to consider the long-term cost savings of switching to a high-efficiency system. While these systems may have a higher upfront cost, they can result in significant energy savings over time. In addition to the savings from the tax credits and rebates, these long-term savings can help offset the initial investment.
Contact Dade Super Cool Today!
The 2022 Inflation Reduction Act includes several incentives for installing high-efficiency HVAC systems, including tax credits and AC rebate programs for homeowners in Homestead, Doral, FL. These incentives may make upgrading to a more efficient system more attractive, but it’s essential to consider all factors before deciding. If you’re considering the benefits of the Inflation Reduction Act, contact our team at Dade Super Cool! We can inspect your current system, provide advice on how to save energy, and install your new system for you when you’re ready to upgrade.
