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Manasota Air Conditioning Contractors Association

Energy-Efficient HVAC Rebates on the Rise: What HVAC Professionals Need to Know

Thursday, September 14, 2023 2:16 PM | Anonymous

What HVAC Professionals Need to Know

Residential heating and cooling technologies are changing

In 2022, Americans bought more than 4 million heat pumps — compared to approximately 3.9 million gas furnace purchases — pointing contractors toward a shift in customer sentiment: Households are looking toward energy-efficient heating and cooling alternatives.

But aside from the clear deviation from traditional technologies by way of purchasing data and trends, local energy providers and governments are taking part through updated rebate structures to new construction natural gas bans in states like New York and California. Notably, Chicago’s largest energy provider, ComEd, has foregone central air conditioning rebates in a strategic effort to direct consumers to climate-friendly options as of July 1, 2023. The utility certainly won’t be the last to do so.

In the coming months and years, local bodies will continue to align with the federal government’s push toward electrified technologies with legislation such as the Inflation Reduction Act (IRA) to lower household energy costs. HVAC professionals should be adept and in tune with these industry-altering transformations, so as not to lag and stay stagnant in a space that is inherently and undoubtedly progressing.

So, let’s break down what recent changes and existing rebates mean.

Residential Heating and Cooling Technologies Are Changing

Heat pumps are up to three times more efficient than gas furnaces for heating and are able to cool homes as well. Rather than generating heat, heat pumps transfer it and therefore use less energy than a traditional electric or gas system. And for contractors, dual-purposed heat pumps allow for ease of installation without the need for two separate heating and cooling units and an effortlessly streamlined process.

When 69% of U.S. adults are in favor of the U.S. taking steps to be carbon neutral by 2050, the assumption that heat pumps and similar systems will dominate the industry landscape in the coming years is not very far-fetched.

Not only that, incentives and rebates are playing a monumental role in the shift to energy-friendly technologies.

New Incentives Spearhead a Shift

To meet the U.S. government’s goal of a net-zero emissions economy by 2050, incentives are in place to aid homeowners in their efforts to help achieve this benchmark. The IRA allocates more than $20 billion for direct spending on clean home upgrades. Through the IRA, states can offer up to $8,000 in rebates for electrified products based on income, and consumers are eligible for federal tax credits of up to $2,000.

Chicago’s ComEd offers up to $2,000 in rebates for air source heat pumps, and up to $1,350 for mini-split heat pumps, heating and cooling solutions that don’t require ductwork but rather use outdoor compressors and indoor air-handling units.

Along with Chicago, local and state governments in New York, Colorado, Maine, and Massachusetts are offering utility incentives to help in modernizing and updating current systems. Maine, in particular, has surpassed its target of 100,000 new heat pumps installed by 2025 — having given out rebates for 116,000 heat pumps.

As these incentives, and others surely upcoming, continue to pass through, American households will be inclined to replace older, inefficient systems, leaving savvy contractors eager to aid in the process to reap the benefits.

Aligning with a Developing System Is Key

Being up to date on what incentives are available in their area, as well as consumer purchasing trends, will position HVAC professionals to go to market smartly and purposefully. The following guidelines will help in that process:

Optimize new construction to allow for updated, energy-efficient systems. Be sure space is appropriately allocated, and the space will be able to support heat pumps, mini splits, and other emerging technologies. And pro tip: Make sure to have a surefire way to maintain documentation of the systems installed; it will be important when applying for incentives.

Continue to learn about local incentives and invest in continued training. Researching what incentives are offered in the communities in which the service is being performed will equip the installer with the knowledge needed to provide optimal, knowledgeable customer service. Investing in training programs and certifications, on the other hand, allows HVAC teams to garner the expertise needed to be leaders in the field.

Educate customers. To play a role in climate-neutrality and the planet’s sustainability journey, educate customers on the benefits of energy-efficient technologies.

Work with experts. Consider conversing with renewable energy experts to gain additional skills and strategies on how to play a role in sustainable compliance.

By following these steps, HVAC professionals can continue to play a vital part in this exciting and electrified future of heating and cooling solutions.

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