Inflation Reduction Act

Here’s what Montana property owners may want to know about the Inflation Reduction Act of 2022.

Signed into law in August 2022, the Inflation Reduction Act provides tax credits and rebates to encourage Montana homeowners to replace older appliances with high-efficiency equipment that performs better at a lower operating cost.

How to Take Advantage of the Inflation Reduction Act

Hometown Heating & Cooling, Inc. can help pinpoint areas in your home or business where you can save money and reduce your energy consumption, allowing you to use the best tax credits and rebates.

HVAC Tax Credits Homeowners Can Claim Now!

The Inflation Reduction Act extends and expands the existing Energy Efficient Home Improvement Credit (Section 25C) and the Residential Clean Energy Credit (Section 25D) to homeowners. 

Projects installed between 2023 and 2032 quality for a 30% tax credit:

• Air Conditioners—Tax credit up to $600
• Heat Pumps—Tax credit up to $2,000
• Furnaces—Tax credit up to $600
• Geothermal Systems—Uncapped 30% tax credit on purchase and installation

Here is a closer look at heating, ventilation, and air conditioning (HVAC) products and eligibility requirements:

• Ducted Air Source Heat Pump systems must be designated as ENERGY STAR Cold Climate that have an EER2 of 10 or higher.
• Ductless Mini-Splits must be designated as ENERGY STAR Cold Climate with a SEER2 rating of 16 or higher, an EER2 of 9 or higher, and an HSPF2 of 9.5 or higher
• Split Air Conditioner systems must have a SEER2 rating of 16 or higher.
• Gas furnaces must be ENERGY STAR certified with an AFUE rating of at least 97% or higher.

HVAC Rebates

The Inflation Reduction Act set aside a $4.5 billion budget, with the money allocated to individual states for disbursement. Funding will vary from state to state, and eligibility is income-based.

For example, the High-Efficiency Electric Home Rebate Act (HEEHRA) covers 100% of electrification project costs for low-income households (income up to 80% of the area median income) and 50% of costs for moderate-income households (income of 80-150% of the area median income).

Here’s how some of those rebates would work:

• $8,000 for a heat pump for space heating
• $4,000 for an upgraded breaker box
• $2,500 for upgraded electric wiring
• $1,600 for insulation, air sealing, and ventilation
• Up to a $500 rebate is available for contractors per heat pump installation

The rebate program is not available to all households. Because the funds are being allocated to state offices, and each state gets to decide to a certain degree how to distribute the money, it will take some time to implement the rebate program. Nor are the rebates retroactive to 2022.

The tax credits, in contrast, are in place right now and will continue to be for the next decade!

You can still buy now and save big!

Up-front costs are typically the biggest obstacle to upgrading your heating and cooling system. The Inflation Reduction Act of 2022 overcomes that barrier. Even if the rebates aren’t currently available, or you don’t qualify, we offer 0% APR financing for 72 months on new equipment as well as other available rebates and promotions that can put money back in your pocket! Call Hometown Heating & Cooling, Inc. today, locally owned and operated here in the Gallatin Valley since 2004, at 406-388-8853 to learn more about how you can save money!