Rebates & Tax Credits

25C Tax Credit

The 25C Tax Credit Program provides a capped 30% tax credit for home improvements that will increase your home’s energy efficiency. ENERGY STAR® certified heat pumps, heat pump water heaters, and energy audits are all eligible.

• • Must be ENERGY STAR certified or have a SEER2 rating of at least 16, an EER2 rating of at least 12, and an HSPF2 rating of at least 9.
  • Ductless mini splits also qualify.
  • Can be combined with HEEHRA benefits (See Below)
  • You may claim the energy efficient home improvement credit for improvements to your main home. Your main home is generally where you live most of the time.
  • The home must be:
    • Located in the United States
    • An existing home that you improve or add onto, not a new home
  • Heat pumps must meet or exceed CEE highest efficiency rating
  • Heat pumps are eligible for 30% of the purchase and installation costs or up to a $2,000 tax credit
  • Homeowner must complete Form 5695

Learn More about the Federal 25C Credit HERE or US Department of Energy, Energy Tax Credits

APS and SRP Incentives

APS and SRP offer rebate programs to Phoenix, AZ homeowners. These local incentives can be combined with IRA benefits!

These benefits are available to SRP customers:

• • Up to $225 per TON on a new SEER2 15.2 or higher energy-efficient AC
    • Compressor Type:
      • Single Stage $75/Ton
      • Multi-Stage $150/Ton
      • Variable-capacity $225/Ton
  • Up to $100 on smart thermostat installation
  • Up to $400 on duct repairs
  • Up to $100 on home energy audits

SRP Cool Cash Application
Complete SRP Terms and Conditions
Read more about SRP rebates HERE

APS is offering a $200 rebate when you replace your old or broken air conditioner with a new one. To qualify, a participating contractor will submit the rebate form. The new AC unit must be:

• • An energy-efficient unit with a minimum of 14.3 SEER2
  • Purchased on or after January 1, 2023
  • Up to a max of five units per home

Read more about APS rebates HERE

Inflation Reduction Act Rebates and Incentives

The IRA helps homeowners invest in renewable home energy and efficient electric appliances by offering discounts on solar panel installation and other clean technologies. Electrification nonprofit Rewiring America estimates that a household could save $1,800 per year on energy bills by upgrading from a furnace to a modern electric heat pump, using a heat pump for water heating, adding rooftop solar, and converting to an electric vehicle. Here’s a breakdown of the IRA’s most significant provisions for homeowners. The IRA consists of several applicable components including:

HEEHRA (High-Efficiency Electric Home Rebate Act)
HEEHRA provides either rebates or tax credits on the purchase of eligible ducted or ductless heat pump systems. The benefits that are available via HEEHRA are dependent on household income.

• • Low-income households: Eligible for a 100% rebate up to $8,000. A low-income household earns less than 80% of an area’s median family income.
  • Moderate-income households: Eligible for a 50% rebate up to $8,000. A medium-income household earns 80% to 150% of an area’s median family income.
  • High-income households: Eligible for a 30% tax credit up to $2,000.
  • In 2022, the median household income for Phoenix was about $74,568.

The High-Efficiency Electric Home Rebate Act (HEEHRA) lets homeowners take advantage of rebates for certain electrification projects. Households with a median income level under 80% of the area median income can get up to 100% of their HVAC/Heat Pump project covered, up to $8,000, and households earning between 80% and 150% of the area median income can recoup 50% of the cost, also up to $8,000. HEEHRA rebates cover both installation and material costs.

You can visit your state government’s website to determine where your household falls. Some states offer tables that show a household’s income level based on annual income, municipality, and the number of people living in the house. There are also online calculators that let you enter that information to determine your household’s income level.

Other Resources

Energy Star List of Rebates and incentives for Arizona residents.
Energy Star List of Federal Tax Credits
Arizona Governor’s Office Instructions for Rebates