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June 22, 2023


Big savings are available for homeowners with the 2023 energy efficient home improvement tax credit.

The Energy Efficient Home Improvement Tax Credit (25C) is part of the Inflation Reduction Act (IRA), which was signed to 2022 and includes nearly $370B for climate and energy programs. It is intended energy-efficient solutions by providing homeowners credits on HVAC products that meet the 2023 highest non-advanced Consortium for Energy Efficiency (CEE) tier.

  • Up to 30% of installation costs for qualified expenditures, with an annual maximum of $1,200
  • Up to $600 each for qualified air conditioners and furnaces
  • Up to $2,000 for qualified heat pumps, which have a separate aggregate yearly limit; the maximum total yearly 25C credit amount may be up to $3,200

Effective January 1, 2023, the expanded version of the 25C program includes generous annual limits (not lifetime), meaning that the same customer could benefit from the credit with energy efficient upgrades year after year. This expansion will extend the program out to December 31st, 2032.

Qualifying Consortium for Energy Efficiency Tiers

The CEE defines efficiency tiers for Residential HVAC, which determine the equipment that qualifies for the 25C homeowner tax credit. As part of the Electric Equipment update in 2022, the CEE introduced a geographical component for Heat Pumps (North, South).

Click here to check out the list of residential products that meet the highest efficiency tiers established by CEE in effect as of January 1, 2023 and cited in the Inflation Reduction Act of 2022 (IRA).

Have you read about the Inflation Reduction Act (IRA)? Click here to learn about the U.S. Government’s passed comprehensive energy policy bill offering several tax credits that reward homeowners for purchasing higher efficiency, ENERGY STAR-certified and Consortium for Energy Efficiency-specified equipment.