Are There Government or Tax Incentives Available for Upgrading to an Energy-Efficient Heating System?

There are a variety of Texas and federal incentives for upgrading to an energy-efficient heating solution for your home. Some programs are means-tested, while others are available to everyone, regardless of income. Some manufacturers also offer exceptional rebates. For example, any purchasers upgrading to new Trane or Oncor units can potentially save several thousands of dollars in instant rebates, tax credits or local incentives from your electric company.

The High-Efficiency Electric Home Rebate Act (HEEHRA)

Maybe the most attractive of all the programs for eligible recipients, the High-Efficiency Electric Home Rebate Act (HEEHRA) offers up to $14,000 to low-income households for qualifying efficient HVAC upgrades. Moderate-income households can potentially save up to 50 percent of their new installation costs up to $14,000.

This rebate technically applies to all types of appliances, from water heaters to cooktops, but it can be particularly attractive for homeowners in need of a new heating solution.

Heating Tax Credits

Love it or hate it, the Inflation Reduction Act of 2022 has temporarily provided homeowners with some unique tax credit opportunities through December 31, 2032, making now an ideal time to upgrade to a more efficient heating system.

Homeowners can get up to 30 percent off project costs for a maximum of $600 in savings on ENERGY STAR certified gas furnaces with annual fuel utilization efficiency AFUE greater than or equal to 97 percent. The 30 percent project cost tax credit (up to $600) is also available on hot water boilers with an AFUE greater than or equal to 95 percent.

Arlington homeowners interested in a new gas storage water heater can take advantage of the same tax credit (30 percent up to $600) for qualifying water heaters.

There are also potentially lucrative savings opportunities on air-source heat pumps, with a rebate for 30 percent of project costs up to $2,000 available. This tax credit is available on both ducted and ductless systems. Ducted systems only need to have earned the ENERGY STAR label, while ductless systems must have:

• SEER greater than or equal to 16
• SEER2 greater than or equal to 12
• HSPF2 greater than or equal to 9

Should You Wait or Upgrade Now?

Although the tax credits are technically going to be available through 2032, there’s a strong argument to be made that upgrading sooner rather than later is preferable for your wallet. If you’re having to pay for frequent repairs, or you’re frustrated by the high cost of heating your home with your current HVAC system, upgrading to an ENERGY STAR-certified system will earn you both the credit and reduced utility costs moving forward. Running a struggling system until it breaks down for good can result in years of expensive, subpar heating performance and the inconvenience of losing heating when you need it most.

Why take the risk or deal with the increased heating costs when you can save yourself the time and headache by scheduling a replacement consultation today?

Electric Company Incentives

Texas consumers have the unique opportunity to choose from a number of local electricity service providers. Although you can choose from different providers, all electricity is delivered by Oncor Electric Delivery, the company that owns the infrastructure in Arlington.

In many states, utilities have local monopolies, meaning homeowners don’t have a choice when it comes to their electricity providers. Some of the companies that serve Arlington and the surrounding areas offer unique incentives for certain HVAC system upgrades or the use of smart thermostats.

You should visit your electricity provider’s website and look up their incentives to see if you are eligible for additional rebates or incentives.

Get Advice From Local Arlington HVAC and Energy Efficiency Experts

Upgrading your water heater or heating solution can be a significant investment. Our certified technicians have extensive experience helping local HVAC replacement customers identify the best incentives and tax credits for energy-efficient heating and cooling solutions. 



We can also help you save money on your winter heating costs with our OptiHome home optimization solutions. Give us a call at (817) 277-4493 If you want to learn more about potential incentives as well as ways you can improve home comfort and efficiency.