Tax Incentives and Rebates for HVAC Systems

TAX CREDITS

What are tax credits in the world of HVAC? The federal government supports energy-efficient technology in residential homes and commercial buildings by offering tax credits. You can receive a credit toward the income tax you may owe if you purchase and install a qualifying energy-efficient HVAC system, such as a heat pump or certain AC units.
In terms of equipment, you can receive a credit when tax season arrives. For more detailed information, please visit the IRS website and continue reading to learn more about the additional performance metrics for 2025.

UTILITY REBATES

What are rebates in the HVAC world? Rebates are a useful tool to incentivize people to install energy efficient HVAC systems in your residential home or commercial building. Instead of being tax based and ran by the federal government, the rebates are rewarded by specific electric companies or Co-ops.
These groups also place high value on energy-efficient HVAC systems and want to assist buyers in financially affording these types of systems. Below, we will review more details on the types of units that are associated with rebates as well as the companies who offer them in our area.

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Note: The information below is what we currently have on each utility provider. Some may still follow previous standards as they adjust to the new guidelines. We recommend that you check with your provider to confirm their rebate programs in 2025 and their requirements.

North Carolina

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Haywood EMC Co-op – Haywood Electric does not provide rebates to its members currently. The offerings may change over time. Make sure to look again when you are planning on purchasing a new unit. For more information from Haywood, click the logo to go to their webpage.

South Carolina

Laurens Electric Co-op – Laurens Electric offers rebates for installing energy-efficient systems such as heat pumps and AC units. Residential members can receive significant financial incentives to make their homes more energy-efficient. Earn rebates on duct work, heat pumps, attic insulation, AC, and more. Click the logo to see your savings.

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Duke Energy – When you click the link to their webpage, make sure to change your location to South Carolina. This can be found in the top right corner next to their search bar. Duke Energy supports the installation of energy-efficient HVAC systems through various rebate programs. These incentives aim to make eco-friendly technology more accessible to residential customers.

Little River Co-op – Little River Electric Cooperative currently does not offer specific rebates for HVAC systems. However, they are committed to promoting energy efficiency among their members. They provide resources and tips on energy efficiency to help members save on utility bills. Check their website for more information and updates.

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Broad River Co-op – Broad River Electric Cooperative does not have direct HVAC rebate programs but offers various resources and tips on energy efficiency. They provide educational resources and initiatives to help members improve their home’s energy efficiency. They have initiatives like the Smart House to demonstrate energy-saving technologies. Check their website for more information and updates.

Sometimes we don’t pay attention to the things we are subscribed to or what companies we use as consumers. With that being said, if you’re unsure what Electric company or co-op you use, this tool might be helpful in figuring out – The Electric Cooperatives of South Carolina. This resource is great for residents of South Carolina. You can learn more about electric co-ops in South Carolina on this page. For North Carolina residents looking for more information on energy efficiency and cooperative rebates visit NC Electric Cooperatives. This resource provides valuable information on local electric cooperatives and their initiatives to help you save energy and reduce costs.

Summary on Rebates
Rebates are provided by specific electric companies or cooperatives.
Eligibility varies by company but typically includes energy-efficient systems like heat pumps and AC units.
Potential savings can be substantial, helping to offset the initial cost of new installations.

Tax Credits Summary

Qualifying Systems: These include air-source heat pumps, central air conditioners, and gas furnaces, among other energy-efficient HVAC systems recognized by the IRS.

Credit Amounts: Homeowners can claim up to 30% of the cost, with caps of:
$2,000 for heat pumps
$600 for central air conditioners
$600 for gas furnaces
These figures are accurate as of January 2025.


Purpose: Designed to make eco-friendly upgrades more affordable and to promote energy efficiency in residential homes.

Claiming Credits: Federal tax credits can be claimed by filing IRS Form 5695 with your tax return. Starting in 2025, homeowners must provide the Product Identification Number (PIN) for qualifying systems as part of the claim process.

Documentation: Keep all receipts and documentation related to the purchase and installation, such as the Manufacturer’s Certification Statement, for tax purposes.

Long-term Savings: Reduce your energy bills through more efficient systems, which provide significant savings over time.

Environmental Impact: Lower your home’s carbon footprint by investing in modern, energy-efficient equipment.

Clyburn Accounting Services Greenville Sc

Wondering how to claim these credits? Bob Clyburn can help! Give him a call or visit his website.

What Systems Qualify?

The SEER rating of an HVAC system measures its energy efficiency—higher SEER ratings mean better performance. Starting in 2025, qualifying systems must meet updated SEER2, EER2, and HSPF2 standards to be eligible for federal tax credits. For heat pumps, additional requirements include:

COP at 5°F: Ensures the unit performs well in colder climates.

Capacity Ratio at 47°F/5°F: Determines system efficiency under variable conditions.
These updated standards are designed to offset the cost of upgrading to energy-efficient systems, making it easier for homeowners to lower energy consumption and reduce environmental impact.

See below for required ratings and read on for more information about what these numbers mean.

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Because the new standards were put in place so quickly, certification databases might not be ready right away. In the meantime, manufacturers will give homeowners letters with certified ratings to use for their tax records.

SEER Ratings
The SEER rating of an HVAC system measures its efficiency—higher SEER ratings mean better energy efficiency. The federal government offers tax credits to encourage homeowners to install more energy-efficient HVAC systems.
To maximize your tax credits, ensure your new HVAC system meets or exceeds these efficiency standards. These credits are designed to offset the cost of upgrading to energy-efficient equipment, making it more affordable to lower your energy consumption and reduce your carbon footprint.

Conclusions

Rebates and tax incentives are powerful tools for promoting energy-efficient HVAC systems. By taking advantage of programs from local providers like Laurens Electric and Duke Energy, homeowners can significantly reduce the upfront cost of upgrades. Federal tax incentives offer up to $2,000 for qualifying heat pumps and $600 for other systems, providing long-term energy savings and environmental benefits.
To ensure eligibility, homeowners must:
Verify that systems meet 2025 federal efficiency standards.
Include the Product Identification Number (PIN) on their federal tax filings starting in 2025.
Keep all necessary documentation, including receipts and certification statements.
These combined programs make upgrading to energy-efficient HVAC systems more accessible and cost-effective. Take the first step toward a more sustainable and efficient home by exploring these opportunities today.
For more detailed guidance, visit:
CEE Efficiency Requirements Summary
DOE Product Lookup Tool

Look into stacking rebates and tax incentives if you can, as stacking is permitted under federal guidelines for 2025, provided the systems meet both federal and utility requirements.