Think it’s time for a new air conditioning unit? You might be right because summer in Carlton Woods, Texas, is just around the corner. There are financial reasons that make buying a new system a practical choice as well. Everyone, from the federal government to your local utility company, is pushing the idea of energy efficiency these days. Additionally, some agencies are willing to offer incentives to get homeowners on board. Consider tax rebates and energy savings that mean it’s time to install a new air conditioner.

A New HVAC System Can Save a Bit on Your Taxes

The exact benefits you might see with an AC upgrade depend on many factors, but the tax credits are straightforward. The available credit for home upgrades and repairs changes with each new tax season. Therefore, it’s critical that you check the current guidelines before making your purchase. This will ensure you have up-to-date information.

When it comes to home HVAC systems, the IRS offers the following benefits:

  • Central air conditioning — tax $300 credit
  • Advanced main air circulating fan — tax $50 credit

The credit is not available on all AC units. The air conditioner must have the Energy Star seal of approval to qualify, but even then, it must meet specific criteria. For a tax credit, central air conditioners must be rated below 65,000 Btu an hour. There are guidelines for selecting an HVAC unit as well.

This is just the beginning for home energy credits. In 2016, energy upgrades offer as much as a 30-percent tax savings on the cost of purchase and installation. You could see benefits with other upgrades, too, such as switching to an electric heat pump water heater or improving your home insulation to tighten the envelope around your home.

Applying for a Tax Credit

When applying for the credit, you need to fill out Form 5695 and submit it with your taxes. Store your Manufacturer Certification Statement and any receipts in a safe place in case the IRS asks you to produce them. Make sure to include any installation receipts as well.


Finding rebates is a little more difficult these days. The federal government does not offer any at present, but the state of Texas sometimes will, and certain local governments have energy-saving programs as well. One of the best resources for place-specific savings is your utility company; the AC vendor can help, too. Texas has over 100 incentives available. Not all will apply to homeowners purchasing new air conditioners, but most go through the local power company.

The type of rebate varies based on who is providing the offer and the AC unit you’re buying. Asking for an energy audit is a good place to start. A technician will come in and evaluate your home cooling needs. Most rebate applications need a complete audit within 30 days of installation. When applying for the rebate, the contractor needs to sign the application and provide a copy of the evaluation and invoice.

Savings Beyond the Incentives and Credits

Ultimately, buying a new air conditioner is about making your home more energy efficient and lowering your monthly bills. Choosing an Energy Star-certified central air conditioner means using at least 8 percent less energy each month. An Energy Star unit also uses 14 percent less energy than minimum government standards. Once you have the new unit installed, finding easy and efficient ways to maintain it will save you even more money.

Picking the right unit for your home matters, too, so let a knowledgeable expert give you options. An oversized unit will actually cost more to run. It will turn on and off more often than necessary and may not dehumidify the air properly. The technician can recommend alternative cooling methods, perhaps a ductless air conditioner.

At Integrity Comfort Solutions, we can make recommendations on which air conditioner will be best for your home, as well as help you find ways to save money on it. For more information, visit our website or give us a call at 281-346-3095.