The average family in Pennsylvania spends more than $2,000 (roughly the equivalent of 10,000 kilowatt-hours) per year on energy costs. Small changes to energy consumption can help mitigate these costs by using less kilowatts per hour. These changes include things like switching to LED lightbulbs or taking measures to turn lights out and keep only certain living areas heated or cooled. However, if you want to make a huge dent in the number of kilowatt-hours your family consumes, and thus give your wallet a bigger break, significant upgrades to your current heating and cooling systems in order.
Some of these improvements include upgrading or replacing the systems themselves, adding or changing insulation types, and installing programmable thermostats. These are all great ways to make an investment in your home and to save on energy costs in the long run. However, in the short term, these changes can require thousands of dollars in equipment and labor costs to be paid upfront, causing many people to choose to remain using their antiquated and inefficient heating and cooling systems. The long-term savings may sound enticing, but the short term price tags are simply not feasible or practical. Luckily the state of Pennsylvania provides homeowners assistance and incentive programs for PA families to upgrade their whole HVAC systems as well as to make other improvements to existing systems.
Read on to learn more about these incentive programs for heating and cooling in Pennsylvania.
Save on ENERGY STAR Certified Products
You have probably seen the little ENERGY STAR logo in appliance ads, or the tags for the products if you shop in store. ENERGY STAR is an initiative managed by the Environmental Protection Agency and U.S. Department of Energy that evaluates products and certifies them if all requirements are met. Rounds of testing will determine whether that product is significantly more efficient than other minimum standards. Since this program and certification launched in the early ‘90s, ENERGY STAR certification has been accepted as an industry standard and significant influence on customer decision making.
When it comes to selecting new equipment such as a furnace or boiler, upfront costs to purchase and install more efficient equipment may seem higher. And though the product may have associated estimates on how much you will save on utility bills in the coming years, it can still be tempting to go for a model that will save you money in the short-term. (Aka the slightly cheaper, uncertified model that has most of the same features.) This is especially prevalent when making a much larger purchase, such as a new boiler, in which a non-ENERGY STAR certified furnace comes with an average $5,000 price and an efficient model will likely cost around $7,500. However, knowing that many customers may be discouraged from budgeting the extra cost is why ENERGY STAR has a robust rebate and savings program, to help offset the extra cost of buying efficient products and encourage customers. Here is a quick overview on the average costs of products vs. their more efficient competitors
Local energy companies partner with ENERGY STAR and their rebate program so that customers can save on select products in a few different ways. The most common type is a mail-in rebate, meaning that you won’t save at checkout but will be reimbursed for the rebate amount after submitting your proof of purchase. However, you will also see instant rebates, buy downs/discounts, and bill credits. The savings range depending on the product and the rebate type, but can be up to several thousand dollars on larger investments such as a new boiler. Visit https://www.energystar.gov/rebate-finder to find rebates in your area.
Energy Efficiency Programs
Act 129, passed in 2008, directed the seven largest electric distribution companies with more than 100,000 customers to submit and implement energy efficiency programs. The overall goal of reducing electric consumption without placing a financial burden on customers could only be achieved by local providers creating programs based on usage in their area, particularly focusing on reducing consumption during peak demand times. Peak electrical demand often takes place during the summer in most areas and can cause system-wide reductions in voltage or failure altogether. Intentional brownouts, or load reduction, are common during heat waves to help avoid blackouts.
These programs range from providing an overview of efficiency and recommendations for improvement to rebates on approved products or usage programs. Some providers even offer rebates on smaller purchases such as LED light bulbs. Actually verifying your purchase and receiving payment for the rebates varies depending on the provider’s individual procedure, so make sure you double check what the terms of the rebate program are and how long you have to submit your information before making the purchase.
Federal Tax Credits
Tax credits for residential energy efficiency are another way to save on the cost of upgrading equipment, and this isn’t just restricted to your HVAC system. Here is a list of eligible efficient product tax credits:
- Water heaters can use up to 25% of your energy costs. Purchase of qualifying propane, oil, and gas water heaters with an efficiency rating of 0.82 or more translates to a $300 tax credit.
- Insulation and various products that reduce air leaks, confirmed by a Manufacturer’s Certification Statement, qualify for 10 percent of the cost with a cap of $500.
- ENERGY STAR certified central air conditioners are eligible for a $300 credit.
- ENERGY STAR certified air-source heat pumps are also eligible for a $300 credit.
- ENERGY STAR certified oil, gas, or propane boilers are eligible for a $150 credit, including installation.
- ENERGY STAR certified propane, gas, or oil furnaces are eligible for a $150 credit.
Geothermal heat pumps will earn you a tax credit of 30 percent their cost, with no earning maximum.
Please note that the credits do not include credit earned for installation costs, with the exception of water boilers. (So you can only submit the costs of the eligible equipment, not your total invoice for getting that product up and running in your home.)
In addition, there are tax credits on efficient doors, windows, roofing materials, and other products outside of your HVAC system. So if you are doing a lot of remodeling and replacing, utilizing as many of these tax credits as you can will provide a decent return on your investment. Use IRS Form 5695 to file your eligible Residential Energy Credits.
Whether you need to upgrade a significant portion of your system or are looking at repairs, make a specific plan for the replacement equipment and products based on the potential savings. Whether you want to do your research beforehand or ask us for our recommendations based on what you’re replacing, make sure you look into your local provider’s rebates, ENERGY STAR rebates, and any tax credits. Add those together to see what you’ll save on the equipment, and make note of when your deadlines are to file paperwork for the rebates. Having 1-2 cost-saving options is best, though what we can install for you will depend on other factors.
Either way, we look forward to helping you save on energy efficient solutions.