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Home Energy Tax Credit

The Home Energy Guide

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What’s a residential energy-efficient property?

To help provide incentives for homeowners to make energy-efficiency home improvements, the federal government offers tax credits as a way to offset the costs of these repairs/changes. This is not cash in your hand (like a rebate which gives you cash back after you’ve made a purchase), but a credit you can claim on your annual tax return that may reduce the federal taxes you pay as a homeowner.

Go green and make money!
  1. Get Pumped – Heat pumps are rapidly gaining popularity as an energy-efficient option for home heating and cooling. With a 30 percent tax credit available for a range of heat pump solutions — up to $2,000 per year — it’s a great time to investigate if this clean technology is right for your home.
  2. Be Efficient – There are lots of ways to save on energy bills around the home by upgrading your appliances. Water heaters, air conditioners, and certain stoves qualify for a 30 percent tax credit when you upgrade to newer, more-efficient models.
  3. Don’t Wait, Insulate – Having air leaks or poor insulation in your home is like watching money literally escaping through the cracks. Don’t let it happen to you! Weatherize your home with a 30 percent tax credit on insulation, doors, and windows.
  4. Ask a Pro! – Don’t know where to begin? Not a problem! Lightfoot Mechanical is here to help. Get a $150 tax credit on a home energy assessment and relax while trained professionals get to work finding opportunities for energy savings in your house!

Saving Really Add Up

When you combine energy improvements with Energy Tax Credits

High Efficiency Electric Home Rebate Program (HEEHRP)

The High Efficiency Electric Home Rebate Program will enable states to provide up to $14,000 in direct consumer rebates for families to buy heat pumps or other energy-efficient home appliances, saving eligible families at least $350 a year on utility bills.

HEEHRP provides HVAC rebates up to $14,000 per household, including:
  • Up to $8,000 Heat Pump installation rebate for energy
    star equipment.
  • Up to $4,000 electrical panel upgrade rebate.
  • Up to $1,600 home insulation 8: sealing rebate.
  • Up to $2,500 home electrical wiring improvements.
Eligibility and the amount of the rebate depends on household income:
  • For households below 80% of area median income, 100% of the system purchase price qualifies for the rebate.
  • For households that fall within 80% to 150% of area median income, 50% of the system purchase price qualifies for the rebate.
  • Households above 150% of area median income do not qualify for the HEEHRP rebate.

Efficiency Home Improvement Energy Tax Credit (25C)

The previous Nonbusiness Energy Property credit (25C) for installing high- efficiency equipment was extended through 2022 and provides federal tax credits of up to $500.

The amended Energy Efficient Home Improvement Credit (25C) begins in 2023 and extends the offering through 2032. It increases the tax credit limits for high- efficiency equipment as follows:
  • Up to $600 each for a qualified air conditioner or gas furnace, with an annual cap of $1,200
  • Up to $2,000 with a qualified heat pump, heat pump water heater, or boiler.

Some Ways You Can Qualify for Energy Tax Credits


You can claim up to $1,600 in tax credits for insulating your home. Products that reduce air leaks can qualify, as long as they come with a Manufacturer’s Certification Statement.

Central Air Conditioning

Replacing antiquated central air conditioners or adding central air conditioning to your home can qualify you for a federal tax credit. You can claim up to $600 in tax credits if you replace or install central air conditioning.

  • Furnaces & Boilers Rebate amount: $150
  • Furnaces Rebate amount: $50
  • Air Conditioners Rebate amount: $300
  • Heat Pumps Rebate amount: $300
  • Package Units Rebate amount: $300
  • Mini-Split AC Rebate amount: $300
  • Mini-Split HP Rebate amount: $300
Upgraded Electrical Panel and Electrical Wiring

Electricity flows into your home through your electrical panel (or breaker box). The panel size determines how much electricity can flow into your home. Upgrading your electrical panel to a more energy-efficient panel can earn you up to $4,000 in tax credits.

Water Heater

Your water heater can also qualify for a federal tax credit. You could be eligible for up to $2000 home improvement tax credit if you upgrade your water heater to a more energy-efficient model.

Qualifying Home Improvements:

  • Insulation products, including rolls, expanding foam sprays, blown-in fiberglass, and other energy saving products, can qualify for a credit for 10% of the cost of materials up to $500.
  • Heat pump installation.
  • Electric load center (breaker box) upgrades.
  • Electrical wiring improvements.
  • Heat pump water heater.
  • Insulation, air sealing, and ventilation upgrades.
  • Stove, cooktop, range, oven, or heat pump clothes dryer.

Qualifying Installed Appliances:

  • Air Source Heat Pumps
  • Central Air Conditioning
  • Non-Solar Water Heaters
  • Bionass Stove
  • Gas, Propane, or Oil Hot Water Boilers
  • Gas, Propane, or Oil Furnaces and Fans
  • Advanced Main Air Circulating Fan

Get a Free Home Energy Consultation Today!

Don’t miss the opportunity to save serious money on a new, upgraded central HVAC System or any Home Appliance that improves efficiency. Using the Energy Tax Credits can help you add value to your home and save significant money for years to come.

If you are still confused about what to install and how you can recoup some of your expenses, we’re here to help. There’s a tax credit of $150 available to have a home energy audit performed by a professional home inspector that can advise you on all available options.

Lightfoot Mechanical is a certified provider of energy saving equipment and our experts are ready to guide you to energy and tax savings in 2023 and beyond.

Call or text us today for more information on energy saving equipment for your home or business.

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