The Inflation Reduction Act of 2022 provides incentives that reduce energy costs, emphasize clean energy, conserve fuel and improve air quality. Incentives include tax credits on installation costs of new heating, ventilation and air conditioning equipment, consumer rebates on energy-efficient home appliances and refunds for specific projects. In some instances, consumers are eligible for both tax credits and rebates.
In the U.S., the average household spends an average of $1,850 every year on utility bills. The Inflation Reduction Act of 2022 offers energy-saving incentives that benefit single-family residences, multi-family residences, businesses and communities. Consumers installing Energy Star-qualifying heat pumps, air conditioners and furnaces are eligible for tax credits of up to 30% of installation costs.
Residential solar installations receive a 30% tax credit on installation costs of panels and batteries, saving approximately $7,500 on installations and $9,000 on electrical bills over the service life of the equipment. Small businesses get up to 30% tax credits on installations. Community incentives include the 30% tax credit, plus 20% for projects at qualifying housing projects and 10% for projects in low-income communities.
Officials estimate that Alabama families can reduce energy consumption by approximately 28%. Some incentives realize a payback in less than five years. Replacing an electric furnace with a high-efficiency heat pump can save approximately $818 each year, with a payback of approximately 2½ years. New installations are more energy efficient and improve indoor comfort.
Other incentives have a longer payback period but higher monthly savings. Geothermal heat pump installations qualify for 30% tax credits and reduce energy usage by as much as 61%. Changing to LED lighting can save an additional $100 each year on electrical costs. Adding insulation to walls and attics reduces demand on heating and cooling equipment and can save up to $400 annually on energy costs. Replacing an old electric water heater with a heat pump water heater can save approximately $200 each year on electric bills.
Consumers receive rebates for qualifying high-efficiency electric appliances and upgrades, capped at $14,000 depending on income. Consumers can get rebates between 50% and 100% of installation costs for qualifying water heaters, heat pumps, stoves, ovens and clothes dryers.
Air-Specialty provides a full range of heating and cooling services for communities in the greater Mobile, Alabama, area. We are a Carrier Factory Authorized Dealer, and our technicians train on advanced Carrier equipment. Carrier HVAC equipment meets new standards for energy-efficiency as outlined in the Inflation Reduction Act.
Our technicians recommend equipment with maximum rebate and tax incentives that meets your indoor comfort needs. For more information about tax credits, rebates and saving energy with upgrades and new installations on your home or business, contact Air-Specialty of Semmes, Alabama.