2025 HVAC and Electrical Tax Incentives

At Preferred Home Services, our team understands that installing new HVAC equipment and making necessary electrical upgrades to your Charleston home can be a big investment. That’s why we take the time to help families better understand what tax incentives are available that can help make their installation and replacement services more affordable.

As of 2023, there are many different tax incentive programs available to Charleston families. From heating and cooling to water heating and electrical panel upgrades, residents stand to save thousands of dollars simply by taking advantage of federal income tax credits under the Inflation Reduction Act of 2022.

Read on to learn more about the available tax credits in 2023, or call our team at (864) 206-5620 to speak with a home service specialist today! 

Tax Credits for Homeowners

The Inflation Reduction Act of 2022 will provide federal income tax credits for home improvements that enhance energy efficiency until 2032. Depending on the type of equipment you have installed, homeowners may take advantage of a wide variety of available tax credits for new installations or replacement projects from January 1, 2023 to December 31, 2032.

Principal residence owners (i.e., property owners making updates to the homes in which they live most of the time) may claim these credits as long as they are making updates to an existing home. Upgrades for new construction and rental properties do not apply.

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 and boilers on an annual basis.

Call our team at (864) 206-5620 to learn more about these programs and schedule your installation appointment today! 

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

A home energy audit will give you a full inspection and written report of your current energy usage. Suppose 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. In that case, you can save 30% up to $150.

Take Advantage of Available Tax Credits With Help From Preferred Home Services!

Taking advantage of available tax incentive programs is an excellent way to save on your home improvements while maximizing energy efficiency in your home, and Preferred Home Services is here to help you achieve precisely that. We’ll help you navigate available tax credits so you can save on your installation or replacement project.

Offering free estimates on replacement quotes and an unparalleled commitment to your complete satisfaction, there’s no team better suited to satisfying your home improvement needs.

Contact Preferred Home Services at (864) 206-5620 to request more information about available tax credits through the Inflation Reduction Act.