2025 HVAC and Electrical Tax Incentives

If you want to improve your home’s energy efficiency while saving money, now is the time. With various tax incentives for HVAC installation and electrical updates in South Carolina, Charleston homeowners can complete the upgrades they’ve been wanting and need and take advantage of great savings.

Tax Credits for Homeowners

As part of the Inflation Reduction Act of 2022, federal income tax credits will be available for many energy-efficient home improvements made through 2032. These tax incentives help us to offset our carbon footprint and move toward clean energy in the future. When combined with state rebates, homeowners can receive significant savings on equipment that will also have a lower operating cost.

ENERGY STAR-certified equipment and services that are eligible for tax credits include:

• HVAC equipment
• Water heaters
• Residential clean energy 
• Electrical panels
• Energy audits

The maximum limit for an energy efficiency tax credit in a single year is $3,200. This can be divided into two categories: A limit of $1,200 for various home envelope enhancements, including windows, doors, skylights, insulation, and electrical improvements, as well as furnaces, boilers, and central air conditioners.

Additionally, a total limit of $2,000 applies to a combination of heat pumps, heat pump water heaters, and biomass stoves/boilers on an annual basis.

Heating & Cooling Tax Credits

If you’re ready to update your HVAC system, there are a variety of tax credits available for a variety of systems, including:  

• Air source heat pumps: 30% credit with a maximum of $2,000
• Central air conditioners: 30% credit with a maximum of $600
• Boilers: 30% credit with a maximum of $600
• Biomass fuel stoves: 30% credit with a maximum of $2,000
• Natural gas, oil, & propane furnaces: 30% credit with a maximum of $600

Water Heating Tax Credits

Install an ENERGY STAR-certified water heating system today for great savings:

• Heat pump water heaters: 30% credit with a maximum of $2,000
• Natural gas, oil & propane water heaters: 30% credit with a maximum of $600

Residential Clean Energy Tax Credits

As we aim to move toward a clean energy future, you can save 30% tax credits for any of the following that is placed in service after December 31, 2023, and before January 1, 2033:

• Geothermal heat pumps
• Small wind turbines
• Solar energy systems
• Fuel cells
• Battery storage technology

Electric Panel Upgrade Tax Credits

A new electrical panel can mean greater energy efficiency. You can receive a 30% credit up to $600 if your new panel meets these requirements:

• Installed up to National Electrical Code
• Has a load capacity of no less than 200 amps
• Is installed in conjunction with or enables the use of energy efficiency improvement and equipment

Home Audit Incentive Tax Credits

With a home energy audit, you’ll receive a full inspection and written report of your current energy usage. If your audit identifies the most significant and cost-effective energy efficiency improvements you can make along with an estimate of the energy and cost savings and is completed by a certified home energy auditor, you can save 30% up to $150.

Make Energy-Efficient Improvements Today With Preferred Home Services

With the push for clean energy, the federal government is offering outstanding tax credits for many new energy-efficient upgrades. Residents in South Carolina can take advantage of these savings to complete the projects they’ve been saving for.

From new highly efficient HVAC to solar, you’ll save with your next home improvement project. Call Preferred Home Services today, and we’ll help you take advantage of these great savings!

Trust the team at Preferred Home Services with your next energy-efficient project! Call us today at (843) 405-3601 or contact us online!