Congress renewed and revived the Federal Tax Credit program for 2016. Qualifying homeowners can get up to $300 back on their 2016 federal income tax returns. While a far cry away from the 2010 Federal tax credits of $1,500, it can often be combined with manufacturer and utility company rebates. PA homeowners can receive up to an additional $300 from electrical utility companies for select equipment purchases. Major equipment manufacturer’s (Like American Standard, Trane and Carrier) often offer spring and summer rebate programs that can provide another $300-1,200 rebates direct to the homeowner.
What’s the catch? Nothing is free (as Mom often told me)… The catch is… you have to purchase a high efficiency heating or cooling system which usually has a higher initial purchase price. Yes, you’ll spend more money upfront for features like variable speed, variable rate modulation, or other energy saving technology, but you’ll quickly save most if not all of the initial purchase price in the form of reduced energy costs over the life of the unit (15-20 years). I try to work out the return on investment (ROI) in a 5-7 year payback period. Add to that a $300 Tax Credit, a $300 Utility rebate and a $300-$1,200 manufacturer’s rebate and we could see a 2-3 year ROI.