By: Brian Schutt
Not to be overly dramatic, but I think this entry would best be read while listening to the sweet sounds of Europe’s Final Countdown. Now that you’re sufficiently rocking, you’re in the right frame of mind to hear that the $1500 Federal Tax Credit for high-efficiency furnaces, air conditioners, and heat pumps expires at week’s end. We wrote about all the detail at length earlier this year but wanted to give a reminder because it’s an incentive you might not ever see again.
This incentive has been in place for the last couple of years, and many homeowners have taken advantage of it. You may be asking yourself, what does it mean for me right now? Well, if you would decide to install a high-efficiency furnace (95% efficient or higher) by December 31, you would receive up to a $1500 tax credit.
Practically, many homes in the Indianapolis area have furnaces that are 10, 20, 30+ years old, which have a declining amount of efficiency. Let’s be generous and say your system is 70% efficient now. Once the tax credit is factored in, you would be spending less to get a new 95% efficient furnace than you would to buy a new standard 80% efficient furnace. And, when you factor in the increase in efficiency, you can see how the new system would quickly pay for itself. Now, if your equipment is working properly, I wouldn’t recommend you go buy something new. However, if you know your system is on its last legs, and that there’s a high likelihood that you will have to replace it sometime soon, it may well be worth pricing out some options.