How Do I Qualify for the New AC Unit Rebates?

Investing in a new air conditioning system is more affordable thanks to various rebates and tax credits. Here's how to maximize your savings when upgrading your Tucson home's cooling system.

Federal Tax Credits

Energy Efficient Home Improvement Credit

The Inflation Reduction Act provides significant incentives:

For Central Air Conditioners:

• Credit: 30% of cost, up to $600 per year
• Requires SEER2 16 or higher and EER2 12 or higher
• Applies to equipment and installation

For Heat Pumps:

• Credit: 30% of cost, up to $2,000 per year
• Higher limits reflect greater efficiency
• Applies to equipment and installation

How to Qualify

Requirements include:

1. Your home: Must be your primary residence
2. New construction: Generally not eligible (must be existing home)
3. Equipment: Must meet efficiency requirements
4. Installation: Must be by a qualified contractor
5. Documentation: Keep all receipts and certifications

Claiming the Credit

• File with your annual tax return
• Use IRS Form 5695
• Credit reduces taxes owed
• Cannot exceed your tax liability
• Unused credit doesn't carry forward

Utility Company Rebates

TEP (Tucson Electric Power) Programs

TEP may offer rebates for:

• High-efficiency air conditioners
• Heat pumps
• Smart thermostats
• Tune-up services

Check TEP's current programs at tep.com for specific offerings.

Southwest Gas Programs

For heat pump and gas furnace combinations:

• Efficiency upgrade incentives
• May combine with electric utility rebates
• Contact Southwest Gas for current programs

How to Apply

1. Verify equipment qualifies before purchase
2. Complete installation by licensed contractor
3. Submit required documentation
4. Receive rebate check or bill credit

Manufacturer Rebates

Seasonal Promotions

Major brands offer periodic rebates:

• Spring and fall promotional periods
• New product launch incentives
• End-of-season clearance
• Volume purchase rebates (through dealers)

How to Find Them

• Ask your HVAC contractor
• Check manufacturer websites
• Look for dealer-specific promotions
• Timing your purchase can maximize savings

HVAC Contractor Incentives

Dealer Promotions

Licensed contractors may offer:

• Seasonal discounts
• Financing promotions
• Trade-in allowances
• Bundle discounts (AC + furnace)

Financing Offers

Special financing can effectively be a rebate:

• 0% interest for 12-60 months
• Reduced interest rates
• Deferred payment options
• Lower effective cost

Efficiency Requirements

Understanding SEER2

New efficiency ratings took effect January 2023:

• SEER2 replaces SEER
• Numbers are slightly different
• 16 SEER ≈ 15.2 SEER2

Minimum for Tax Credits

Central AC:

• SEER2 16 or higher
• EER2 12 or higher

Heat Pumps:

• SEER2 16 or higher
• EER2 12 or higher
• HSPF2 8 or higher (heating efficiency)

Tip for Maximum Benefit

Consider upgrading to qualifying equipment even if you were planning a basic replacement. The additional cost may be offset by tax credits.

Combining Incentives

Stacking Strategy

You can often combine:

1. Federal tax credit
2. Utility rebate
3. Manufacturer rebate
4. Contractor promotion

Example Scenario

High-efficiency heat pump purchase:

• Equipment + installation: $12,000
• Federal tax credit (30%): -$2,000
• Utility rebate: -$400
• Manufacturer rebate: -$300
• Net cost: $9,300

Total savings: $2,700 (22.5% off)

Documentation Requirements

Keep These Records

• Itemized invoice with equipment details
• Manufacturer's certification statement
• AHRI certificate (efficiency verification)
• Proof of payment
• Contractor's license information

For Tax Credits

• Manufacturer's written certification
• Model numbers and specifications
• Complete Form 5695 correctly
• Retain records for 3+ years

Common Mistakes to Avoid

1. Not checking eligibility first: Verify before purchasing
2. Missing deadlines: Utility rebates often have expiration dates
3. Incomplete documentation: Missing paperwork delays rebates
4. Choosing ineligible equipment: Confirm efficiency ratings
5. DIY installation: May void rebates requiring professional install

Getting Help

Contractor Assistance

A good HVAC contractor will:

• Know current incentive programs
• Help select qualifying equipment
• Provide necessary documentation
• Explain the process clearly

Tax Professional Advice

For tax credits:

• Consult your tax advisor
• Ensure proper claiming
• Understand limitations
• Plan timing strategically

Ready to Explore Your Options?

Intelligent Design helps customers maximize rebates and incentives. We know which equipment qualifies and provide all necessary documentation.

Call (520) 333-2665 for a free consultation. We'll help you understand exactly what you qualify for and ensure you receive every available incentive.