Federal Tax Credits (Inflation Reduction Act)
The Inflation Reduction Act (IRA) created the most significant federal HVAC incentives in decades. These are tax credits — they reduce your federal income tax liability dollar-for-dollar, not just your taxable income.
- Heat pumps: 30% of installed cost, up to $2,000 per year, for qualifying heat pump systems meeting efficiency thresholds. This is the largest single HVAC tax credit available.
- High-efficiency furnaces and boilers: 30% of cost, up to $600 per year, for qualifying gas furnaces (97%+ AFUE) and boilers (95%+ AFUE).
- Central air conditioners: 30% of cost, up to $600 per year, for qualifying high-efficiency AC systems.
- Home energy audits: 30% of cost, up to $150 per year, for a professional home energy audit by a qualified auditor.
- Annual cap: The total Energy Efficient Home Improvement Credit is capped at $3,200 per year across all qualifying improvements. The heat pump credit has its own $2,000 sub-limit.
These credits apply to equipment placed in service in tax years 2023–2032. Consult a tax professional for advice specific to your situation. D's Air & Heating provides documentation of equipment efficiency ratings for tax credit claims.
Peoples Gas Rebates
Peoples Gas (the natural gas utility serving Chicago) offers rebates for high-efficiency gas equipment through its Energy Efficiency Program. Current rebate categories include:
- High-efficiency gas furnaces (95%+ AFUE): rebates vary by efficiency tier
- High-efficiency gas boilers: rebates for condensing boilers meeting efficiency thresholds
- Smart thermostats: rebates for qualifying programmable and smart thermostats
- Home energy assessments: rebates for professional energy audits
Rebate amounts change periodically. Check the current Peoples Gas Energy Efficiency Program for up-to-date amounts. D's Air & Heating can help identify which rebates apply to your equipment selection.
ComEd Rebates
ComEd (the electric utility serving Chicago) offers rebates for high-efficiency electric equipment through its Energy Efficiency Program:
- High-efficiency central air conditioners (18+ SEER2): rebates vary by efficiency tier
- High-efficiency heat pumps: rebates for qualifying heat pump systems
- Smart thermostats: rebates for qualifying smart thermostats
- Variable-speed pool pumps and other equipment
Illinois Home Weatherization Assistance Program (IHWAP)
Income-qualified Illinois households may receive free or heavily subsidized HVAC equipment, insulation, and weatherization through IHWAP. The program is administered through community action agencies. Eligibility is based on household income (typically at or below 200% of the federal poverty level). Contact the Illinois Department of Commerce and Economic Opportunity (DCEO) or your local community action agency for eligibility and application information.
Manufacturer Rebates
HVAC manufacturers periodically offer rebates on specific equipment models, often timed to seasonal promotions. Lennox, Goodman, Carrier, and other brands run rebate programs throughout the year. D's Air & Heating tracks current manufacturer rebates and applies them to qualifying installations. Ask about current manufacturer rebates when you request a free estimate.
How to Claim Rebates
Most utility rebates require:
- Installation by a licensed contractor
- Equipment meeting specific efficiency thresholds
- Submission of a rebate application with proof of purchase and installation within a specified window (typically 90–180 days)
D's Air & Heating provides all documentation needed for rebate applications and can assist with the submission process. Contact us at (773) 940-0965 for a free estimate and rebate consultation.