HVAC Tax Credits Boise Idaho – Inflation Reduction Act


You sure could! The Inflation Reduction Act goes into effect on January 1, 2023.

New tax credits and rebates are poised to infuse billions of dollars into the HVAC marketplace, making a variety of high-efficiency technologies more affordable for Idaho consumers, including those in the Boise and Nampa area.

That’s exciting news for homeowners who choose to reduce their carbon footprint by using eco-friendly and high efficiency heating and cooling products. Reducing emissions by reducing the carbon footprint is the name of the game!

“These HVAC rebates provide consumers with a fantastic opportunity to replace their aging low-efficiency HVAC systems with today’s advanced, high-efficiency technology while relieving the financial burden.”
~Brett Shannon, President Peppy Heating and Cooling

What is a Clean Energy Investment?

It’s a new law that provides Americans with access to $370 billion for clean energy investments in the form of tax credits, incentives, and rebates to improve energy efficiency.

The law renews the Energy-Efficient Home Improvement Tax Credit and increases the credit limit for installing high-efficiency equipment such as heat pumps, central air conditioning systems, furnaces, hot water boilers, etc. The program is extended through 2032.

The goal is to have homeowners and businesses adopt more environmentally friendly practices as it relates to their home heating and cooling.

What Products are included in the Clean Energy Investment?

The program is designed to make it easy for homeowners to upgrade their HVAC equipment to a newer and more efficient furnace or air conditioner.  Tax credits are available for products such as:

  • High Efficiency Furnaces
  • High Efficiency Air Conditioners
  • Heat Pumps
  • May also include high energy efficient windows and even water heaters.

Consider this: It’s important to note that efficiencies of heating and cooling equipment have increased dramatically over the last 10 years, so in addition to the incentive, consumers who participate can expect a reduction in their monthly utility bills as well. 

What Is the Energy Efficient Home Improvement (25C) Tax Credit? 

  • It’s a program that went into effect on January 1, 2023 and can be claimed on your 2023 taxes. Additionally, qualified households may claim annually through 2032. More information will be announced throughout the year.
  • The program is a 10-year extension and expansion of existing 10% tax credit to 30%.
  • Tax credits increase up to $2,000 max when adding a qualified heat pump installation to the project. Additional opportunities are up to Up to $600 per item: breaker panel, insulation, fossil fuel systems (meeting elevated efficiency limits) with maximum of $1,200 tax credit.
  • The heat pump system must meet or exceed the highest performance tier set by the Consortium for Energy Efficiency (CEE)
  • However, tax credit increases up to $2,000 max when adding a qualified heat pump installation to the project.

Are There Other Rebates Available? 

Yes, there is also the High-Efficiency Electric Home Rebate Program also known at (HEEHRP) which provides point-of-sale rebates as high as $8,000 for a space heating or cooling heat pump.

It also provides an $840 rebate on a stove, cooktop, range, oven, or heat pump clothes dryer, and $1,750 for a heat pump water heater. An additional rebate is available for non-appliance upgrades such as insulation, air sealing, and ventilation ($1,000).

HEERP is designed for lower-to-middle income homeowners. The rebate criteria are based on income as well as other factors like the total cost of the project and energy savings.

Ready to Find Out About HVAC Rebates and Incentives in Idaho?

The first step is to find an experienced contractor. Our HVAC technicians are trained to help you find the right products and will ensure you get all the rebates and incentives that you qualify for.

We have 2 convenient locations that serve the entire Treasure Valley, one in Boise Idaho and our new facility in Nampa Idaho.

Our cheerful and experienced staff always comes prepared to meet your needs. We’re the only Mitsubishi Diamond Dealer in Boise, and American Standard Customer Care Dealer and recognized nationally as a Ductless All Star. Call today at (208) 906-6928.

FAQs For Heat Pump Rebates and The Inflation Reduction Act

Q: When does the Inflation Reduction Act Start?

A: Most programs started on January 1, 2023, especially the tax credits and deductions. The 25C tax credit is in place today (at $500 max), but the expansion starts for projects billed as of January 1, 2023.

The HEEHRP rebates will most likely be ready in the middle of 2023, depending on each state’s delivery schedule.

Q: Will the State of Idaho operate similarly to the rest of the country?

A: Each state will have to adhere to the criteria in the law regarding efficiency performance standards, but will be able to alter the allocations, except when exceeding the amounts and percentages specified in the law. The tax credits are available directly through your federal tax deductions. Please consult your tax advisor for advice.

Q: What is the 25C tax credit?

A: Starting in 2023, homeowners are eligible for a tax credit of 30% of the cost, up to $2,000, for heat pumps, and/or heat-pump water heater, in accordance with section 25C of the US tax code. Only certain models qualify for the tax credit, and you must have a tax liability from which to reduce your taxes. Please consult your tax advisor for advice.

Q: What is the 45L tax credit?

A: The 45L tax credit is for new homes and is aimed at contractors that build and sell qualifying energy-efficient new homes that meet specified energy efficiency requirements.  If a new home meets the provisions of the ENERGY STAR® New Home program, the rebate is $2,500.  Likewise, the rebate is $5,000 if the new home meets the Net Zero Ready designation from the Department of Energy. 

Q: What is the High-Efficiency Electric Home Rebate program (HEEHRP)?

A: HEEHRP is for lower-to-middle income homeowners and includes up to $8,000 in rebates for heat pumps, with additional rebates for electrical panel upgrades and other improvements. The cap is $14,000 maximum. Low income (making less than 80% area median income [AMI]) homeowners can receive 100% of the project cost in a rebate. Moderate income homeowners (making 80% to 150% AMI) can receive 50% of project cost in a rebate.

Q: What is the HOMES Act rebate program?

A: The HOMES Act provides rebates for all homeowners based on modeled energy savings for efficiency improvements, including heat pumps. If the improvement measures yield 20% modeled savings, a homeowner can receive a $2,000 rebate, and $4,000 modeling in excess of 35% savings.  This rebate is doubled for lower income homeowners and building owners with lower income occupants to $4,000 and $8,000.

Q: Does Mitsubishi Electric and American Standard have models that are eligible for these rebates?

A: Currently, to qualify for the 25C tax credit, equipment must meet the Consortium for Energy Efficiency (CEE) highest tier. To qualify for the HEEHRP rebate program, a homeowner must qualify as low-to-moderate income (LMI) and equipment must meet or exceed the ENERGY STAR® 6.1 specification. Mitsubishi has a wide range of high efficiency heat pumps and will publish a list of qualifying equipment for both CEE and ENERGY STAR soon.

Q: How long will these rebates be available?

A: Rebates specified in the IRA will be available on a first-come-first-served basis until funding is depleted. If you’re wondering if you qualify, it is advised to get started right away!

Q: What is the HOMES rebate program?

A: The HOMES Act provides rebates for homes that cut energy by 20% across their whole home. Homeowners would be eligible for a maximum rebate of $2,000 or half the cost of the retrofit project, whichever is less. That dollar threshold rises to $4,000 for those who cut energy by at least 35%. These rebates are double — up to $4,000 and $8,000, respectively — for households with income lower than 80% of an area’s median income (AMI).

HVAC Tax Credits Boise Idaho – Inflation Reduction Act Tax Credits

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