Inflation Reduction Act of 2022
In 2022, the existing home efficiency incentives program was extended. The program offers homeowners two incentives when it comes to the purchase of new heating and cooling systems.
1. Federal tax credit – Under section 25(c) of Article 26, homeowners are eligible for a 30% tax credit on their tax return up to $2,000 for the purchase and installation of a new select high efficiency air source heat pump. This tax credit is not limited to a homeowner’s primary residence.
The 2023 efficiency standards were established by the CEE (Consortium for Energy Efficiency) and they are viewable at https://cee1.force.com/s/resources?id=a0V2R00000sUQbyUAG
Southeast Region (Maryland)
For traditional ducted split system heat pumps – the equipment qualifies for the tax credit as long as it meets the efficiency standards of ≥15.2 SEER2 ≥11.7 EER2 ≥ 7.8HSPF2
For non-ducted split system heat pumps – the equipment must be ≥16 SEER2 ≥12 EER2 ≥9 HSPF2
2. Federal Cash Rebates – there are two different rebates:
a. High Efficiency Electric Home Rebate – This programs allows for up to $8,000 for a new high efficiency heat pump. The amount of rebate you are eligible for depends on your income in relation to the median income levels of in your area.
b. Homes Cash Rebates – based on modeled energy savings, homeowners meeting certain income requirements are eligible for up to $4,000 per project.
As of March 10, 2023, rebate programs are not in place yet. The federal government has not yet established the standards for the states to carry out through the local utilities.
The Maryland Department of Energy has stated that these standards are likely to arrive after summer of 2023.
The 25(c) tax credit gives you money to get a higher efficient heating and cooling system.
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