Act Now and Snag These Tax Credits
The One Big Beautiful Bill Act (OBBBA) has slashed energy efficiency tax credits, ending them on December 31, 2025. That deadline is just around the corner! However, you still have time to make some home upgrades and rake in the tax savings. And you’ll lower your PA electric supplier bill as well. But don’t dawdle! Let’s go over some energy upgrades you can make before the new year.
Save with Heating and Cooling Energy Upgrades
HVAC upgrades, as well as heat pumps, both can qualify for the tax credits if you go through a professional installer. In addition, the total limit for an efficiency tax credit in one year is $3,200. So choose your upgrades with this in mind!
If your heating and cooling systems are both outdated, a heat pump might be your best option. Contrary to the name, they can also cool your home efficiently. Additionally, air source heat pumps use the same ductwork you already have in place. Which makes them a great choice for a quick upgrade. And if your home doesn’t have ducts, there are ductless heat pumps on the market that also qualify for the tax credit!
Depending on your home size, air source and ductless heat pumps cost an average of $4,000 and $12,000 to install in PA. And they will net you a federal tax credit of $2,000. However, they save you an average of $900 a year. It pays for itself and that’s cheap electricity!
But you want a simple central air upgrade, you can also score a tax credit! Upgrading a 10 year old system to a new ENERGY STAR certified system could lower your annual heating and cooling costs by 20% or more. Depending on your home size, this energy efficiency upgrade costs an average of about $4,000 to $10,000. This is also net you a federal credit worth up to 30% of the total cost, capped at $600. But because this credit isn’t as big as a heat pump, it’s worth comparing the two to see which upgrade fits your needs more.
Energy Efficient Water Heater Upgrades
Natural gas, propane, or oil water heaters, as well as heat pump water heaters, all qualify for tax credits. While you technically can install your own water heater in PA, many areas require permits and inspections to make sure everything is up to code. For heat pump water heaters in particular, a professional is recommended.
Replacing an outdated tank heater with an ENERGY STAR certified model can reduce water heater energy use by 10 to 50%. Natural gas water heaters are typically the cheapest, followed by propane, and then electric. However, with the tax credit deadline looming, consider the costs and additional installation time before you decide to swap from electric to natural gas or propane.
A standard water heater tank can cost anywhere from $600 to $3,000 to install depending on size. They will also net you a federal credit worth up to 30% of the total cost, capped at $600. However, a heat pump water heater costs between $3,600 and $6,500 to install. And will that federal tax credit runs about $2,000. In addition to the larger tax credit, a heat pump water heater can save you an estimated $550 a year.
Don’t Miss the Tax Credit Deadline
Now is your last chance to take advantage of the tax credits before they expire! And, if you really want to save even more on your monthly bills, shop for a cheaper electricity plan. Compare plans, read reviews, and more. Visit https://www.paenergyratings.com