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Some manufacturers offer rebates for energy efficiency upgrades, such as a new appliance or remodel. You can find manufacturer rebates on some Energy Star-certified products. A product earns the Environmental Protection Agency's (EPA's) Energy Star logo if it meets efficiency requirements. The appliance has to contribute to efficiency savings and deliver high performance.

Federal Tax Credits

You can also save money with tax incentives for energy efficiency. Tax credits directly reduce the amount you owe in taxes. The federal government offers tax credits for some environmentally friendly purchases. When you buy a renewable energy product, energy-efficient appliance or renovate your home in certain ways, you can save money on your taxes. Federal tax credits can cover the following projects.

1. Renewable Energy Projects

The federal government incentivizes renewable energy products with tax credits. You can decrease your tax burden when you buy:

• Fuel cells.
• Wind turbines.
• Geothermal pumps.
• Biomass fuel stoves.
• Solar energy systems.

2. Energy Star Appliances

You can also earn tax credits when you purchase some Energy Star home appliances, such as:

• Central air conditioning systems.
• Water heaters.
• Advanced main air circulating fans.
• Certain hot water boilers, furnaces and fans.

3. Home Improvements

In addition, tax credits apply to some energy efficiency home improvements, including:

• Insulation.
• Roof.
• Windows.
• Doors.
• Skylights.

State-Level Energy Efficiency Incentives

Along with federal incentives, many states offer incentive programs for energy efficiency upgrades. Depending on where you live, state and local programs may help you save on your upgrades. You can utilize rebates, tax credits and deductions, loans and other programs. For instance, Pennsylvania offers the Homeowners Energy Efficiency Loan Program to help homeowners finance repairs like air sealing, insulation and roof replacements.

Utility Company Rebates

You might also be able to take advantage of utility rebate programs or discounts. Many utility companies will help homeowners reduce their energy consumption and save on costs through energy efficiency projects. If you want to know whether your utility company offers any rebate or discount programs, check out their website or give them a call.

Keep in mind, if you live in a deregulated energy state, you can choose your energy supplier — meaning you can switch utility companies if desired. If you find a utility company that offers incentives and energy efficiency rebates, you may be able to switch over to that company.

Energy-Efficient Financing

If you're concerned about financing an energy-efficiency project, look into your options. You might qualify for special loans, mortgages and other financing options. For instance, the Energy Efficient Mortgage (EEM) program allows borrowers to refinance Energy Star-approved homes or fund improvements. Energy efficiency financing programs can help alleviate the financial burden of an energy-saving home improvement.

What Types of Home Improvements Qualify for Energy Tax Credits?

When you make energy-saving home improvements, you may qualify for specific tax rebates and credits. Learn more about some of the projects for which energy efficiency rebates and tax incentives apply.

Central A/C

If you install a central air conditioning unit with an Energy Star rating of Most Efficient, you can qualify for a $300 tax credit. In order for a product to qualify as "Most Efficient," it must use the latest technology to provide the best possible efficiency. The EPA notes that lifetime costs and savings will vary based on location, size, installation quality and other factors. However, any "Most Efficient" heating, ventilation and cooling (HVAC) system is sure to produce savings.

Water Heaters

An efficient water heater will also earn you savings. You can earn a $300 tax credit for any water heater with an energy factor of 0.82 or greater and thermal efficiency of at least 90%. A conventional water heater contains a storage tank of water it always keeps heated. More efficient versions are tankless, heating water only when necessary.

Different types of water heaters are available — the most efficient option for you will depend on your home's unique characteristics. Heat pump water heaters are more efficient than traditional ones. A heat pump water heater pulls warmth from its surroundings to heat up its stored water. For that reason, they work best when placed in hot spaces, such as furnace rooms. You could also opt for a solar water heater, which uses the sun's natural heat, or an indirect water heater, which uses your existing home heating system to provide hot water.

Geothermal Heat Pumps

Geothermal heat pumps or GHPs use the consistent temperature within the Earth to heat or cool a home. Several different types of GHPs are available — they can be either closed or open loop and require installation underground or in a body of water. For most homes, a cost-effective choice will be an underground, horizontal geothermal pump. You can cut costs by choosing a hybrid or dual-source system, which combines an air-source pump with a geothermal pump.

In order for a geothermal pump to qualify for tax credits, it must meet Energy Star requirements, including minimums for the coefficient of performance (COP) and the energy-efficient ratio (EER). The COP is the ratio of the change in heat from the source to the application, and the EER is the overall efficiency.

Standards vary depending on whether a system is a closed or open loop, as well as its source. For geothermal pumps, the tax credit includes installation costs. In addition, the home served by the system does not have to be your primary residence.

Air Source Heat Pumps

You can also earn savings for efficient air source heat pumps. Any air source heat pump with an Energy Star certification qualifies for the $300 tax credit. It has to have a minimum heating seasonal performance factor (HSPF), energy efficiency ratio (EER) and seasonal energy efficiency ratio (SEER) — but all you need to know is whether or not it has the Energy Star seal of approval. Air source pumps are a good option if you lack the land required for a geothermal pump or if you're looking for a smaller upgrade project.

Smart Thermostats

"Smart" or programmable thermostats make it easier to keep your home comfortable while reducing your energy costs with automatic temperature settings. For instance, you can program a smart thermostat to heat or cool your home when you're on your way home from work. Although smart thermostats are not part of a tax credit program yet, you can find local energy efficiency rebates to offset the cost. In any case, these systems will help you save on heating and cooling expenses.

Biomass Stoves

Biomass stoves use renewable, bio-based fuel sources, such as:

• Agricultural crops.
• Plants and grasses
• Wood and wood residues, such as pellets.

As of 2021, efficient biomass stoves with thermal efficiency ratings of 75% or greater qualify for the Renewable Energy Tax Credit. You can earn an uncapped 26% tax credit based on the system's full cost, including installation. You'll want to act quickly, however, because the credit drops to 22% in 2023 and expires after that unless Congress renews it. Keep in mind, you can only claim the credit for the year of installation, not purchase.

Solar Energy

Solar energy systems also qualify for the Renewable Energy Tax Credit, including solar water heaters and photovoltaic panels. The system has to have a Solar Rating and Certification Corporation (SRCC) certificate or similar state government endorsement. Like with other renewable energy projects, the home the system serves need not be your primary residence.

Roofing

You can also earn a tax credit when you upgrade your roof. The credit applies to Energy Star-certified metal and asphalt roofs designed to ward against heat gain, using pigmented coatings or cooling granules to reflect more sun rays. The tax credit is 10% of the cost up to $500, not including installation. For this tax credit, the home must be your primary residence and it must be an existing home, not a new construction project.

Doors, Windows, Skylights

Energy Star-certified doors, windows and skylights generate the same 10% tax credit as roof upgrades. The credit is capped at $500 for doors and $200 for windows or skylights and does not include installation costs. Keep in mind, if you're upgrading more than one part of your home, energy efficiency tax credits cannot exceed $500 total.

Appliances

If you're looking to upgrade your appliances, you can benefit from energy-efficient appliances rebates. Appliances like fridges, freezers and dishwashers qualify for Energy Star ratings. You can use the Energy Star Rebate Finder tool to find available rebate programs.

Lighting

Lighting upgrades are another way to improve your home's efficiency. Light-emitting diode (LED) bulbs use 75% less energy and can last 25 times longer than incandescent bulbs. They'll allow you to light your home while using less energy. You can also use automatic motion-sensor or timer lights to cut back on your energy consumption. Home lighting projects might qualify for rebate programs or other incentives. They can help you earn an EEM as a home financing option.

Insulation

Insulation improvements qualify for the same tax incentive as roofing, windows, doors and skylights. It's a 10% credit with a cap of $500, not including installation. Qualifying products include batts, rolls, rigid boards, expanding sprays, blow-in fibers and pour-in-place insulation solutions — almost any product that reduces air leaks in your home. You can also qualify if you buy weather stripping, spray foams, caulks or wraps.

How Do You Find Energy Efficiency Rebates?

Before you begin your home improvement projects, do plenty of research to see how you might reduce your financial burden. In many cases, home energy efficiency projects reduce homeowner costs, thanks to both decreased energy expenses and incentive programs.

If you're wondering how to find tax incentives and rebate programs for energy efficiency, several tools are available. You can search the incentive programs in your state using the Database of State Incentives for Renewables and Efficiency (DSIRE) tool. This database shows you a list of all the federal and state incentive programs for various energy efficiency projects.

Be sure to check out Energy Star incentive resource pages to learn about eligible appliances or projects. You can also search your state's government websites for relevant information. Each state has its own energy department or administration, and some states also have renewable energy offices that supply funding for renewable projects. Check out all of the resources specific to your location.

When you purchase HVAC products from Ingram's Water & Air, we'll match you with the energy efficiency rebates and incentives for which you might qualify, saving you the time and effort you'd spend researching.

How Do You Claim Energy Efficiency Rebates?

It's simple to claim energy efficiency rebates or tax credits. If you qualify for a nonbusiness energy tax credit, you can claim it by filing Form 5695 with your tax return. The form provides details about qualifying home projects and how to determine your credit amount. Make sure you have the Manufacturer's Certificate handy to prove its energy-efficiency certification.

How Else Can You Tell You Have an Energy Efficient HVAC?

Aside from Energy Star ratings, other metrics will help you determine the energy efficiency of your HVAC systems. You can check the unit's user manual for efficiency ratings. Air conditioners and heat pumps have SEER ratings, and furnaces have annual fuel utilization efficiency (AFUE) ratings. Look for a SEER rating greater than 15. If you have an oil furnace, look for an AFUE rating of at least 85% — or 90% for a gas furnace.

Shop High-Efficiency Water and Air Equipment From Ingram's Water & Air

Improving your home's efficiency offers many financial benefits. Your home improvements could help you save on regular energy costs and other expenses. What's more, they might allow you to qualify for energy efficiency rebates and incentive programs. You may be able to take advantage of federal tax credits, manufacturer or utility rebates, state-level incentives or financing programs. These incentives encourage homeowners to use energy efficiently.

If you're looking to improve your home's energy efficiency, Ingram's Water & Air equipment are an ideal choice. We offer popular brand HVAC products, including Goodman and MrCool, at competitive prices. We'll automatically match you with local energy efficiency rebates and incentives for which you might be eligible, saving you the hassle and time it can take to find these programs on your own.

Choose Ingram's Water & Air for your home improvements — browse our efficient water and air equipment today. We offer HVAC units, geothermal systems, indoor air quality improvement systems, water heaters, filters and backup generators. Find everything you need for your home's heating, cooling and water with Ingram's Water & Air.