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Purchasing a new or upgraded air conditioner or heat pump can make quite an impact on your household budget. However, homeowners who are interested in new residential cooling equipment may be able to qualify for one or more money-saving programs. Federal energy rebates and tax credits, dealer and manufacturer rebates, state and local incentives, and energy efficiency rebates can add up quickly, reducing the total cost of your new cooling system by a significant amount. Here are some of the more common rebates, tax credits and financial incentives that you can use toward the purchase and installation of specific types of Mitsubishi Electric home cooling systems.

Federal 25C Tax Credits

As part of the American Taxpayer Relief Act of 2012, a number of expired federal income tax credits were reinstated. These credits, known as 25C tax credits, can be applied to the individual personal income taxes of homeowners who install and use energy-efficient cooling equipment, including heat pumps and air conditioners. The equipment must be purchased and put into service between January 1, 2012 and December 31, 2013. Credits apply to equipment purchased for principal residences only and are limited to a $500 lifetime total for all qualifying equipment. The 25C tax credits are restricted if you have already taken energy tax credits since January 1, 2005.

The 25C tax credits apply to Mitsubishi Electric split-system air-source heat pumps, split-system central air conditioners, and Mitsubishi Electric multi-split-system air-source heat pumps that meet the following efficiency criteria:

  • Heat pumps: Up to 10 percent of costs, including installation, to a maximum of $300, for split-system air-source heat pumps with a minimum SEER of 15, EER of 12.5 and HSPF of 8.5.
  • Air conditioners: Up to 10 percent of costs, including installation, to a maximum of $300, for central split-system air conditioners with a minimum SEER of 16 and EER of 13.

Remember that SEER (Seasonal Energy Efficiency Ratio), EER (Energy Efficiency Rating) and HSPF (Heating Seasonal Performance Factor) are measures of the efficiency of HVAC equipment. SEER applies to central air conditioners and the cooling functions of heat pumps. EER applies to room air conditioners. HSPF applies to the heating function of heat pumps. Higher SEER, EER and HSPF numbers indicate greater levels of equipment efficiency.

Claim your 25C credits by submitting Form 5695, Residential Energy Credits, with your individual income tax return. Contact your tax preparation professional for detailed advice on claiming the 25C HVAC tax credits.

State and Local Incentives

A variety of energy efficiency rebates and heat pump rebates are available at the state and local level. These incentives can include rebates, discounts, credits and other considerations for the purchase of high-efficiency air conditioners and heat pumps. To find a list of financial incentives and rebates by state, search the online Database of State Incentives for Renewables & Efficiency (DSIRE).

Check with your local utility companies, renewable energy offices and municipal energy offices to see if there are any local-level incentives available to you.

Energy Star Rebates

Energy Star is a program administered jointly by the U.S. Department of Energy (DOE) and the U.S. Environmental Protection Agency (EPA). It is an information and conservation program intended to help consumers save money and energy while at the same time aiding the environment. Energy Star-certified air conditioners and heat pumps have been tested and certified to be energy efficient. Several Energy Star Partners offer rebates and discounts for the purchase of qualifying equipment. Incentives can include sales tax exemptions, discounts and rebates on the purchase price of selected home cooling systems. Search the Energy Star Rebate Finder to find special offers, rebates and other incentives from Energy Star partners and participating distributors.