Government Programs That Can Help Pay for HVAC Upgrades

Rebates, tax credits and weatherization programs can cover part or all of a new heating and cooling system. Here is how they work.

Heating and cooling are among the largest energy costs in most homes. Public programs at the federal, state and local levels can reduce the cost of upgrading to more efficient equipment.

Rebates and tax credits

Incentives come in a few forms. Point-of-sale rebates reduce the price when you buy. Mail-in rebates refund part of the cost afterward. Tax credits lower the tax you owe when you file. Heat pumps and high-efficiency furnaces usually qualify for the biggest amounts.

Efficiency requirements

Most programs require equipment to meet minimum efficiency ratings, such as SEER2 for air conditioners and HSPF2 for heat pumps. Check the model number against the program's list before you buy, and keep the paperwork.

Weatherization assistance

Weatherization programs focus on making the whole home more efficient. They may cover insulation, air sealing and repairs or replacement of unsafe heating systems. Eligibility is usually based on household income compared with the area median. Local community action agencies run most programs.

Utility programs

Electric and gas utilities often offer their own rebates, free energy audits or on-bill financing that lets you repay the cost through your monthly bill.

How to get started

• Search your state energy office website for current programs
• Contact your utility about rebates and audits
• Ask contractors which incentives they can help you claim
• Keep receipts, model numbers and installation records

A note on costs

Equipment and installation prices vary by region and project. Program funding and rules also change, so confirm details before you commit.