Federal Tax Credits

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10 September 2013
tax credits
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If your heat pump or air conditioner has lost efficiency or it needs frequent repairs, 2013 could be a good time to take advantage of federal energy tax credits to replace it.

When lawmakers avoided the fiscal cliff in January, they reinstated the 25C tax credit program for homeowners who install high efficiency equipment.

Considering how much Kentucky and Indiana homeowners rely on cooling systems, this credit can help offset the cost of replacing your current system. If the new system meets the energy efficiency standards the credit requires, you can deduct 10 percent of the cost of the replacement for a maximum credit of $300.

The minimum seasonal energy efficiency ratio (SEER) the cooling system must meet depends on the type you choose.

A package system — one whose components are in one unit — must have a SEER of at least 14 for both heat pumps and air conditioners. In addition, the heat pump must have a heating seasonal performance factor (HSPF) of at least 8.0.

A split system — one with an outdoor condenser and indoor air handler — must have a 16 SEER if it’s a central air conditioner, and a 15 SEER if it’s a heat pump, along with an 8.5 HSPF.
These federal energy tax credits help homeowners choose systems that will lower electrical consumption, which helps not only the individual homeowners, but the larger community as well. By encouraging homeowners to install systems that use less electricity, the government provides an incentive that results in overall lower demand for energy production. Homeowners benefit because their cooling systems will use less power, which decreases electric bills.

Each increase in the SEER drops energy consumption by 10 percent under laboratory test conditions. Any cooling system that’s over 10 years old has lost much of its initial efficiency, which means that its electrical consumption goes up each season it runs. Replacing a system whose performance has fallen results in immediate energy savings that will last for many years.

To learn more about taking advantage of the federal energy tax credits and any other rebates and special offers this year, contact Alliance Comfort Systems. We’ve been helping Kentucky and Indiana homeowners with their HVAC equipment since 2004.

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