Nobody likes sweating in the summer heat or shivering in the winter cold. As your HVAC system ages, you might be unable to afford a new air conditioner or furnace.
Fortunately, eight government programs for energy efficiency, health, and safety can assist with much of the costs.
Low-income families, single mothers, seniors, and people with disabilities often qualify for free equipment. Middle and upper-income households can also cut costs through financing, rebates, and tax savings.
This article will examine how these programs work, who is eligible to participate, and how and where to apply.
Government HVAC Grants
The federal government gives HVAC grants to state agencies to support energy efficiency and health and safety. The recipients provide free benefits to homeowners, significantly reducing repair and replacement costs.
Financing Programs
Financing can fill holes left by the federal HVAC replacement programs. State-level recipients prioritize benefits for low-income families (veterans, seniors, disabled, etc.), so middle-class households might still need help.
No credit check HVAC financing makes the numbers work for middle and upper-income families by spreading the equipment investment over time to match the monthly energy savings.
Your lifetime ownership costs could be less than zero (free).
- Two middle-income incentives lower installation expenses
- Tax Credits & Deductions
- Rebate Programs
- Borrow money to pay the remaining upfront costs
- Begin saving each month on gas or electric bills
- The monthly payments might be smaller than the savings
WAP Benefits
The federal Weatherization Assistance Program (WAP) provides grants to states. The recipient agencies administer benefits for low-income families to help them pay for HVAC replacement systems and repairs that reduce gas and electricity consumption.
Request WAP HVAC benefits by following the steps outlined by the US Department of Energy.
- Determine your eligibility for services
- Below 200% of the federal poverty level
- Receive Supplemental Security Income (SSI)
- Receive Aid to Families with Dependent Children (AFDC)
- Identify and contact your local certified contractor
- Complete the application process with the company
- Recent pay stubs
- SSI & AFDC statements
- If eligible, prepare to receive services
- Show patience while on a waitlist
- Get permission from the landlord if renting
Once your name reaches the top of the waitlist, the local certified contractor will conduct a home energy audit. The analysis will generate recommendations prioritized by a Savings Investment Ratio (SIR).
| Mechanical | Health & Safety | Building Shell | Electric Baseload |
| Heating and cooling systems | Combustion appliance safety testing | Air sealing | Motor controls |
| Duct and pipe insulation | Vent systems | Drafty windows & doors | Efficient light sources |
| Programmable thermostats | Smoke and carbon monoxide detectors | Aperture film, solar screens, louvers, and awnings | Refrigerators and freezers |
| Water heaters | Safety repairs as needed | Roof and wall leaks |
LIHEAP Benefits
The federal Low-Income Home Energy Assistance Program (LIHEAP) gives grants to states. The recipient agencies provide two benefits: decreasing the lifetime ownership costs of HVAC systems.
- Reducing gas (furnace) and electricity (air conditioning) bills
- Primary objective
- 80% resource allocation
- Lowering new equipment costs through weatherization
- Secondary objective
- 20% resource allocation
Apply for LIHEAP services by contacting a certified contractor near your home. Follow these steps outlined by the US Department of Health & Human Services (HHS).
- Select your state from the dropdown menu
- Select the county of your current residence
- Click on the yellow dot closest to your location
- Contact the state-approved provider to see if you qualify
The LIHEAP Clearinghouse Report breaks down the weatherization services supported in each state.
| Weatherization Service | States Supporting |
|---|---|
| Heating system modification or repair | 49 |
| Furnace replacement | 47 |
| Cooling system modification or repair | 29 |
| Air conditioning replacement | 21 |
Energy Rebates
Inflation Reduction Act (IRA) authorizes the Department of Energy to grant funding to states supporting two home energy rebate programs, lowering the costs of installing HVAC replacement equipment.
Please note three critical caveats.
- You cannot combine the two rebates in a single upgrade but stack them on different elements of one project.
- The states have yet to establish frameworks to support the rebates, meaning you may want to delay your project.
- The rebate programs have multiple names, confusing consumers and authors who are attempting to write succinctly.
Home Efficiency
Section 50121 of the Inflation Reduction Act authorizes the Home Efficiency Rebate Program (HERP: also known as Home Energy Performance-Based and Whole House).
With its many aliases, HERP helps pay for new HVAC equipment, promising to reduce gas and electricity consumption for all income ranges.
Apply for HERP rebates at your state energy department once they become available. The potential rebate size depends on your projected energy savings and household income.
You might receive a lesser fixed amount or a percentage of project costs.
| Modeled Energy Savings | Higher Incomes | <80% Area Median Income | ||
| Max | Percent | Max | Percent | |
| > 35% | $4,000 | 50% | $8,000 | 80% |
| 20-34% | $2,000 | 50% | $4,000 | 80% |
| 15-19.9% | $100 per % saved | 50% | $200 per % saved | 80% |
Home Electrification
Section 50122 of the Inflation Reduction Act authorizes the Home Electrification and Appliance Rebate Program (HEARP, also known as Home Electrification and Appliance Rebates or the High-Efficiency Electric Home Rebate Act).
HEARP, with its many aliases, helps pay for new HVAC equipment that uses electricity rather than natural gas.
Apply for HEARP benefits at the point of sale: the HVAC contractor you choose to perform the installation. The rebates are substantial, so you may want to wait until your state is ready.
| Area Median Income (AMI) | % Covered | Max Benefit |
|---|---|---|
| <80% | 100% | $14,000 |
| 80% to 150% | 50% | $7,000 |
- Heat Pump HVAC: $8,000
- Breaker Box: $4,000
- Electric Wiring: $2,500
- Ventilation: $1,600
Tax Savings
The Internal Revenue Service supports two tax savings programs that can work as direct grants for HVAC system replacement for middle and upper-income households. You must have a tax liability to take advantage.
Consult with your tax advisor before filing your return.
EEHIC
The Energy Efficiency Home Improvement Credit (EEHIC) reduces the installation cost of qualified energy-efficient HVAC equipment by 30% with limits. The maximum credit is $3,200 annually.
- $2,000 per year for eligible heat pumps
- Air-source
- Geothermal
- $600 per energy efficiency improvements ($1,200 annual max)
- Central air conditioners
- Furnaces (natural gas, oil, or propane)
- Electrical components needed to support upgrades
- Panelboards
- Branch circuits
- Feeders
Medical Deductions
Qualified Medical Expenses Deductions could lower the costs of installing new HVAC equipment to address medically necessary health problems.
For example, a cancer patient with a compromised immune system might have a medically necessary reason to upgrade several components.
- HEPA filter to remove dust, mold, bacteria, pollen, and other lung irritants
- Humidifier to mitigate chemotherapy dryness in the mouth, nose, and throat
Section 504
The USDA Section 504 provides HVAC grants directly to low-income seniors living in rural areas. Recipients over 62 do not repay the $10,000 in funding to remediate health and safety hazards.
- Cold winters in northern regions are a health threat to seniors
- Hot summers in southern areas are a safety hazard for the elderly
Apply for Section 504 grants by contacting your local rural development office. Qualified seniors age 62 and older must meet these criteria.
- Be the homeowner and occupy the residence
- Reside in an eligible rural area
- Unable to obtain a loan elsewhere (bad credit)
- Have a family income below 50% of the area median
- Unable to repay a restoration loan
Energy Star
Energy Star is the least impactful government program for new HVAC systems, but every penny counts. The Environmental Protection Agency oversees the rebates and tax credits, making energy-efficient equipment purchases more affordable.
Find federal government rebates on the Energy Star website. Enter your zip code to find a listing of products and possible savings. Click on the button for each entry for details about how and where to take advantage.
You might find rebates for specific heating and cooling equipment.
- Air-source heat pumps
- Geothermal heat pumps
- Smart thermostats
- Air conditioning (room & central)
- Furnaces
- Ventilation fans
Heating System Programs
Now, we can illustrate how these various government grants for HVAC replacement systems might help pay for heating equipment, such as gas furnaces, heat pumps, and water boilers.
Gas Furnaces
First, we illustrate how several government programs can help homeowners obtain a free natural gas furnace replacement. Heating systems with an annual fuel-utilization-efficiency (AFUE) rating above 90% often qualify in colder climates.
- WAP: Installs energy-efficient gas heating equipment at no upfront cost to low-income homeowners.
- LIHEAP: Reduces the remaining natural gas costs fueling the forced hot air systems.
- EEHIC: Provides a $600 tax credit towards purchasing energy-efficient furnaces fueled by natural gas, propane, or oil.
- Section 504: Offers up to $10,000 for seniors over 62 in rural areas to purchase furnaces for health reasons.
Heat Pump Furnaces
Second, we illustrate how other government programs more frequently translate into a free heat pump furnace replacement. Heat pumps run on electricity and work by pulling warmth from the outside (air-source or geothermal) and circulating it through your home.
The Department of Energy (DOE) measures heat pump efficiency during the winter using the Heating Seasonal Performance Factor (HSPF2).
Heat pumps are more efficient, transferring up to 300% more energy than it consumes. Gas furnaces max out at 95%. Therefore, WAP and LIHEAP support their installation along with three additional programs.
- Home Efficiency Rebates: Apply to all projects projected to reduce the consumption of gas, oil, or electricity
- Home Electrification Rebates: Apply specifically to heat pumps and supporting equipment (breaker boxes, wiring, ventilation)
- Energy Efficient Tax Credit: Refunds $2,000 for heat pumps and $600 for related upgrades (panel boards, circuit boards, feeders)
Water Boilers
Middle and upper-income families using steam distributed through pipes and radiators to heat their homes can get help paying for new energy-efficient water boilers. The amount of assistance depends on the fuel used by the system.
The EEHIC tax credit offers different refund amounts for water boilers.
- $600 for boilers using natural gas, propane, or oil
- $2,000 for biomass-fueled water boilers
- Wood pellets
- Wood chips
- Logs
Space Heaters
Low-income families should seek better solutions than free space heaters. The federal government advises against using portable electric or gas devices to warm homes in winter. The units are unsafe and inefficient.
Federal guidelines recommend removing portable space heaters. After improving a home’s energy efficiency, it must have a fixed central heater that warms the whole living area.
WAP and LIHEAP might replace portable space heaters with stationary furnaces to warm the entire house. The audit may recommend upgrading to a fixed unit for two main reasons: to conserve energy and to improve home health and safety.
Air Conditioning Programs
Next, we can illustrate how these government grants for energy-efficient HVAC replacement systems might translate into help paying for cooling equipment: air conditioners and heat pumps.
Refrigerant A/C
First, we illustrate how several government programs might help low-income homeowners obtain free refrigerant-based air conditioning equipment. To qualify, new cooling systems must meet Seasonal Energy Efficiency Rating (SEER) standards.
- WAP: Install new A/C units, saving enough energy, and may prioritize replacing old equipment running R-22 Freon, which harms the environment.
- LIHEAP: Reduces the cost of electricity powering the unit
- Section 504: Provides up to $10,000 for seniors over 62 in rural areas to buy A/C for health reasons
Heat Pump A/C
Next, we illustrate how several government programs could lead to free heat pump-based air conditioners. While in its cooling mode, a heat pump absorbs the hot air inside your house and pushes it outdoors to lower temperatures.
A heat pump is the more cost-effective year-round solution because a single unit handles two functions: cold air in the summer and warm air in the winter. Therefore, WAP and LIHEAP support their installation along with three additional programs.
- Home Efficiency Rebates: Apply to all cooling projects projected to reduce the consumption of gas, oil, or electricity
- Home Electrification Rebates: Apply specifically to heat pumps and supporting equipment (breaker boxes, wiring, ventilation)
- Energy Efficient Tax Credit: Refunds $2,000 for heat pumps and $600 for related upgrades (panel boards, circuit boards, feeders)
Ventilation Equipment Programs
Finally, we can illustrate how these government grants for HVAC replacement systems might help pay for the ventilation needed to regulate temperatures and circulate healthy air throughout your home.
Ductwork
Several government programs help pay for ductwork modifications (repairs and replacements) even though these ventilation components do not directly consume energy.
- WAP: repairs or replaces ductwork as recommended by a home energy audit
- Install duct and heating pipe insulationRepair leaks in heating pipes and ducts
- Replace vent systems to draft combustion gasses outside
- HEARP: might provide rebates of 50% to 80% to convert ductwork from whole-house to a two-zone system if projected energy savings are sufficient
Air Quality
Several government programs help pay for ventilation systems that improve indoor air quality. In these cases, the concern for health and safety drives the assistance for fans, humidifiers, dehumidifiers, premium filters, and other components.
- WAP: Installs mechanical ventilation to ensure adequate indoor air quality
- HEARP: Rebates up to $1,600 toward electronic ventilation systems
- Section 504: Helps seniors over 62 address health and safety issues
- Medical Deductions: Reduces tax liability for medically necessary ventilation
