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Tax Credits, Rebates, and Incentives for Ohio Homeowners Installing High-Efficiency Heating and Cooling Equipment

HVAC rebates & tax incentives for DorMar customers

Upgrading to high-efficiency heating and cooling systems is a smart move for Ohio homeowners, offering enhanced comfort, reduced energy bills, and a smaller environmental footprint. To make these upgrades more affordable, various federal tax credits, state incentives, and utility company rebates are available. Let’s explore the specific opportunities as of January 3, 2024.

Federal Tax Credits for Energy Efficiency

The Energy Efficient Home Improvement Credit, part of the Inflation Reduction Act, provides substantial tax benefits for homeowners investing in energy-efficient upgrades. You can claim 30% of the cost of qualifying heating, ventilation, and air conditioning (HVAC) systems, with annual limits:

  • Heat Pumps, Heat Pump Water Heaters, and Biomass Stoves: Up to $2,000 per year.
  • Central Air Conditioners, Natural Gas Furnaces, or Hot Water Boilers: Up to $600 per year.

The overall annual limit for this credit is $3,200, which includes a combined limit of $1,200 for home envelope improvements and other qualified energy property, plus the $2,000 for heat pumps and similar systems.

Details here: IRS

Qualifying Equipment:

  • Air Source Heat Pumps: Must meet the highest efficiency tier established by the Consortium for Energy Efficiency (CEE).
    Energy Star
  • Central Air Conditioners: Must meet or exceed the highest efficiency tier (not including advanced tiers) established by the CEE.
  • Natural Gas, Propane, or Oil Furnaces and Hot Water Boilers: Annual fuel utilization efficiency (AFUE) of not less than 95.

Important Considerations:

  • Ensure the equipment meets the specified efficiency standards.
  • Retain all receipts and manufacturer certification statements for your tax records.
  • Consult with a tax professional to accurately claim these credits.

For detailed information, visit the IRS Energy Efficient Home Improvement Credit page.

Ohio State Energy Incentives

Ohio is committed to promoting energy efficiency through various programs:

Home Energy Savings Program:

Through the Inflation Reduction Act, Ohio has been allocated funds to assist residents in reducing home energy costs. The program offers rebates for energy-efficient projects, including HVAC upgrades:

  • High-Efficiency Electric Home Rebate Act (HEEHRA): Allocated $124 million to provide rebates for installing high-efficiency electric appliances.
  • Home Efficiency Rebates (HOMES): Allocated $124 million to offer rebates for whole-house energy-saving retrofits.

These programs aim to cover a significant portion of the costs associated with energy-efficient improvements. Eligibility and rebate amounts may vary based on income levels and project specifics.

For more details, visit the Ohio Department of Development’s Home Energy Savings Program page.

Utility Company Rebates

Many Ohio utility companies offer rebates to encourage the adoption of energy-efficient appliances and systems. Here are some programs available to homeowners:

CenterPoint Energy’s Energy Efficiency Programs:

CenterPoint Energy provides rebates for customers who purchase and install energy-efficient equipment:

  • Gas Furnaces: Rebates up to $400 for qualifying models.
  • Gas Boilers: Rebates up to $500 for high-efficiency units.
  • Water Heaters: Rebates up to $250 for energy-efficient models.

These rebates are available for equipment purchased after January 1, 2024.

Ohio Consumer Council

AEP Ohio:

AEP Ohio offers incentives for energy-efficient HVAC equipment, including rebates for:

  • Heat Pumps
  • Central Air Conditioners
  • Smart Thermostats

Rebate amounts and eligibility criteria can vary, so it’s advisable to consult AEP Ohio’s official website or contact their customer service for the most current information.

FirstEnergy’s Ohio Utilities:

FirstEnergy provides rebates for ENERGY STAR-certified appliances, including:

  • Heat Pumps
  • Central Air Conditioners
  • Smart Thermostats

Customers should check FirstEnergy’s website for specific rebate amounts and application procedures.

Dominion Energy Ohio:

Dominion Energy offers rebates on:

  • Gas Furnaces
  • Water Heaters
  • Other Energy-Efficient Appliances

Details on rebate amounts and eligibility can be found on Dominion Energy Ohio’s official website.

How to Proceed:

  1. Verify Eligibility: Ensure your planned equipment meets the efficiency standards required for rebates.
  2. Apply Promptly: Rebates often have application deadlines and may require pre-approval.
  3. Consult Professionals: Work with licensed contractors at Dor-Mar HVAC who are familiar with these programs to ensure compliance and maximize your benefits.

 

Tax Credits, Rebates & Incentives for installing High efficiency HVAC equipment

Benefits of Upgrading to High-Efficiency Systems

Investing in high-efficiency heating and cooling systems offers multiple advantages:

  • Lower Energy Bills: High-efficiency systems consume less energy, leading to significant savings over time.
  • Enhanced Comfort: Advanced technology provides better temperature and humidity control.
  • Environmental Impact: Reduced energy consumption decreases your home’s carbon footprint.
  • Increased Home Value: Energy-efficient homes are attractive to potential buyers, potentially increasing property value.

Next Steps to Take Advantage of Incentives

Making the most of available tax credits, rebates, and incentives for high-efficiency heating and cooling upgrades requires a few simple steps. Here’s how to get started:

1. Research and Plan Your Upgrade

Before making a purchase, take time to understand which incentives apply to the equipment you’re considering. Keep these tips in mind:

  • Check Eligibility: Ensure the equipment you choose meets the efficiency standards required for federal tax credits, state incentives, and utility rebates. For example, look for ENERGY STAR-certified systems or products meeting the highest efficiency tiers set by the Consortium for Energy Efficiency (CEE).
  • Estimate Costs and Savings: Work with a licensed contractor to calculate the upfront costs and the potential savings you’ll achieve through rebates, tax credits, and lower energy bills.

2. Partner with a Trusted Contractor like Dor-Mar

Work with Dor-Mar Heating, Air Conditioning & Plumbing, a qualified HVAC professional to ensure a smooth installation process. We are HVAC contractors who:

  • Have experience with high-efficiency systems.
  • Are familiar with rebate and tax credit programs and can help you navigate the application process.
  • Can recommend systems tailored to your home’s size and energy needs.

3. Apply for Rebates and Credits

After your new equipment is installed, take the following steps to secure your savings:

  • Utility Rebates: Submit rebate applications directly to your utility provider. Be sure to include copies of receipts, proof of installation, and any other required documentation.
  • State and Federal Credits: Claim your tax credits when you file your annual taxes. Attach the necessary forms and supporting documents, such as manufacturer certification statements.
  • Monitor Deadlines: Some programs have specific application windows or expire after funds are depleted. Act promptly to avoid missing out.

A Look at Future Opportunities

Ohio homeowners should keep an eye out for new or evolving programs designed to promote energy efficiency. As sustainability becomes a higher priority, additional funding for rebates and incentives may become available.

Some trends to watch for include:

  • Smart Home Integration: Incentives for systems compatible with smart thermostats and home automation tools.
  • Expanded Electrification: Support for transitioning from fossil fuel-based heating systems to all-electric solutions, such as heat pumps.
  • Renewable Energy Add-Ons: Opportunities to pair efficient HVAC systems with renewable energy solutions like solar panels, further enhancing your home’s eco-friendliness and cost savings.

Why Wait?

Upgrading your home’s heating and cooling systems to high-efficiency models is not just an investment in comfort—it’s a commitment to a greener, more cost-effective future. With generous incentives from federal, state, and local utility programs, there’s never been a better time to make the switch.

By taking advantage of these programs, you’ll enjoy:

  • Immediate financial benefits through rebates and tax credits.
  • Long-term energy savings that lower your monthly bills.
  • A reduced carbon footprint that contributes to a more sustainable environment.

Contact a Dor-Mar specialist to assess your home’s needs. We will be happy to provide information on any federal, state or utility company incentives to purchase high-efficiency HVAC equipment. We will help you apply for rebates and tax credits once your system is installed.

Take advantage of these incentives and start enjoying a more energy-efficient home today!

How Federal, Ohio State, and Utility Incentives for HVAC Equipment Work

If you’re planning to upgrade your HVAC system, understanding how incentives work can help you save money and make the process smoother. Here’s a simple breakdown of how federal tax credits, Ohio state tax incentives, and utility rebates operate.

Federal Tax Incentives for HVAC Equipment

The federal government offers tax credits to homeowners who invest in energy-efficient heating and cooling equipment. Here’s how they work:

  • Eligibility: Qualifying equipment must meet specific energy efficiency standards, such as being ENERGY STAR-certified or meeting the highest efficiency tiers established by the Consortium for Energy Efficiency (CEE).
  • What You Get: You can claim up to 30% of the total cost of qualifying HVAC systems on your federal taxes, with limits depending on the type of equipment. For example, heat pumps can earn you up to $2,000 annually, while central air conditioners and furnaces have a $600 limit.
  • How to Claim: File your taxes using IRS Form 5695 (Residential Energy Credits). Keep your receipts and the manufacturer’s certification to prove eligibility.

This credit directly reduces the taxes you owe, meaning you save money dollar-for-dollar.

Ohio State Tax Incentives

Ohio offers additional programs to make energy-efficient upgrades more accessible, though these aren’t always direct tax credits:

  • Rebates and Financing: Programs like the Home Energy Savings Program and HOMES Rebate provide financial incentives for upgrading your home’s energy efficiency, including HVAC systems. These rebates are typically income-based or tied to the overall energy savings achieved through your project.
  • How to Access: You apply for these incentives through the Ohio Development Services Agency or other state-run energy programs. Some rebates may require a pre-approval process.

While Ohio does not currently offer direct tax credits for HVAC equipment, its financial incentives can significantly offset the upfront cost of upgrades.

Utility Company Rebates

Utility companies across Ohio also offer rebates to encourage homeowners to reduce energy use by installing high-efficiency HVAC systems. Here’s how they work:

  • Eligibility: Rebates are typically available for ENERGY STAR-certified or high-efficiency equipment, like heat pumps, air conditioners, furnaces, and smart thermostats.
  • What You Get: Rebates vary depending on the provider and the type of equipment. For example, rebates from AEP Ohio, FirstEnergy, or Dominion Energy can range from $50 to several hundred dollars.
  • How to Claim: After purchasing and installing qualifying equipment, submit a rebate application to your utility company. Include proof of purchase, installation, and any required documentation.

Utility rebates are often processed quickly, so you’ll see your savings shortly after your purchase.

Summary

  • Federal Tax Credits: Reduce the taxes you owe when you file your federal return.
  • Ohio Incentives: Include rebates and programs to lower the upfront cost of your project.
  • Utility Rebates: Provide immediate savings through cash-back offers for energy-efficient equipment.

By combining these incentives, you can significantly lower the cost of upgrading your HVAC system, making it easier to enjoy a more comfortable, energy-efficient home.

Picture of Steven Brewer<br/>HVAC Expert & Owner

Steven Brewer
HVAC Expert & Owner

I started in the HVAC business as a young man, with my father putting me in crawl spaces to run ductwork while on summer vacation from school; I began full time in our family HVAC business at the age of 19. I obtained my state commercial HVAC license at 25. I'm married with three kids, and I love boating, fishing and hunting.

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