If you’re in the market for a new HVAC system this year, you’re in luck. A new law means you can get a tax break for HVAC replacement systems, specifically heat pump installation.
Keep reading to find out how much you can save, how heat pumps work, and the benefits of a heat pump for heating and cooling your home or business.
Details about the tax break for heat pump installation
Starting in 2023, you can get a tax credit for installing new energy efficient appliances and home improvements, including HVAC heat pump installation.
With this tax break, you can save 30 percent of the equipment and installation cost, up to $2,000.
NOTE: There’s a tax break for other types of energy-efficient HVAC equipment as well, but the cap is lower at $600.
There are no hoops to jump through: the tax break is available to everyone. However, it comes in the form of a tax credit that lowers the amount you owe on your taxes. If you don’t owe anything, the tax credit won’t get you a refund.
Read the details about the program here.
What exactly is a heat pump and how does it work?
Here’s the simplest way to describe a heat pump: it’s an air conditioner that works in reverse to provide heat. That means it can provide both heating and cooling for your space. They are energy efficient and environmentally friendly, because they don’t burn any fossil fuels to produce heat.
Heat pumps remove heat from the air and move it either inside or outside, depending on whether your space needs heat or air conditioning.
- In warm weather, the heat pump absorbs heat from the air inside and moves it outside, thereby providing air conditioning.
- In cooler weather, the heat pump provides heat by removing heat from the air outside and moving it inside. (Even in cold weather, there is residual heat in the air that the system can capture to heat your space.)
Are heat pumps a new technology?
Heat pumps are not new. In fact, they have been popular in milder climates for a long time. But here in the Northeast, until recently they were not commonly used. That’s because in the past heat pumps could not provide sufficient heat in a climate where temperatures frequently drop below 20 degrees.
However, that’s no longer the case. Technology improvements have made heat pumps a smart and economical option even in places that get cold winters.
Learn about VRF systems, a type of heat pump technology that’s becoming popular here in NYC.
Benefits of choosing a heat pump for your HVAC
Why are heat pumps such a smart choice? Here’s what you stand to gain when you make the switch.
Lower energy costs
Heat pumps use less energy overall than other types of heating systems, such as electric baseboard heat, oil furnaces or gas furnaces. They can use more electricity, but eliminating the cost of gas or oil translates to significantly reduced energy bills for you.
Lower repair and maintenance costs
When you use a heat pump as your sole source of heating and cooling, there’s only one system to maintain, and one system to diagnose and repair if anything goes wrong. That also lowers your total cost to operate. Not to mention the convenience: no more oil tanks that run out on you during the coldest week of the year!
Learn more: Heat pump maintenance checklist and FAQ
More environmentally friendly heating and cooling
Heat pumps do use electricity, but they don’t consume fossil fuels to produce heat. When you don’t have to rely on an oil or gas burning furnace, you’re reducing your carbon footprint and doing your part to reduce the use of fossil fuels.
And now, you can even reduce your cost to purchase and install by $2000 with the new tax break.
If you’re in the NY Metro area, contact Arista to learn if heat pump technology is the right choice for your space.
