Grants for Air Source Heating

Air source heat pumps (AHSP) are efficient means of generating heat for your home. While traditional heating equipment use oil, gas or electricity and convert them directly to heat energy, AHSP takes the warm air outside your home and pump it inside to generate heat inside. It uses electricity not to produce heat but only to move the air into your home. It generally consumes 1 kilowatt of energy to produce up to 3 times heat energy, making it quite an efficient heat generating equipment. With the current move towards energy conservation and efficiency, using AHSP is the best option to reduce your heating cost.

Government Grants for Air Source Heating

You can also avail of grants for air source heating equipment that the government offers in the form of tax credits. The government is encouraging use of products with high energy efficiency ratings which can help you to reduce your energy expenses.

To avail of this tax credit, you have to make sure that your ASHP unit is Energy Star certified. Qualified ASHP units are generally rated as follows: 8.5 HSPF (Heating Seasonal Performance Factor) or higher, 12.5 EER (Energy Efficiency Ratio) or higher, and15 SEER (Seasonal Energy Efficiency Ratio) or higher rating. You should also consult with a qualified tax professional who will inform you about the provisions of the American Recovery and Reinvestment Act (ARRA) about tax credits. You should have a copy of the Energy Star certification including all receipts and invoices of your actual expenditures. Take note that not all Energy Star certified ASHPs are eligible for tax credits so make sure that your unit is qualified for the tax credit.

Visit the Energy Star webpage for ASHP for more information. You can claim your air source heat pump tax credit by filing IRS Tax Form 5695.

Tax Credits for ASHP

The old 30% tax credits for ASHPs where you can get up to $1,500 unfortunately expired on the last day of 2010. New changes in tax credits are already in place and unfortunately again, they are at lower levels. You can get a tax credit of $300 for new air source heat pumps. You can see the new tax credit levels at this Energy Star webpage.

Tax credits are generally considered as a better alternative to tax deduction. A tax credit for example of $300 will lower your tax payment by exactly that amount while expenses that merit a tax reduction of $300 will usually result in only a tiny portion of that $300 to be returned to you.

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