AC Systems and Energy Efficent Tax Credit

Re: Cash for Clunkers: Poster Child For Unintended Consequences

It already exists.. tax credit for high efficency upgrades
http://www.energystar.gov/index.cfm?c=tax_credits.tx_index

 

Re: Cash for Clunkers: Poster Child For Unintended Consequences

I wouldn't mix it's requirements with how well it's funded..

It's requirements are that you use a certain efficiency system. The fact it's a tax credit vs. rebate as well means for most people it's value is really more along the lines of $4500-$6000 in AGI.

The fact you bought a much higher rated system, and both of the systems (and therefore spent more) I don't think has much relevance.

You could have replaced just one, or cheaper systems, and gotten the same credit.

 

Re: Cash for Clunkers: Poster Child For Unintended Consequences

I'm familiar with the system and it's requirements.. as I just replaced a AC system myself and the credits were part of the buying decision.

Given you can't install a lower then 13 SEER system anymore, the 'upsell' to get the credit is not very much at all. What more plays more a factor is, if must you replace both the AC and furnace to get to the efficiency you need.. Leading people to spend more then maybe they originally intended.

But even if you take your $8800 number.. the tax credit is equivalent to well over a 50% discount. I think that is quite substantial.

Even at spending 18k.. this is equivalent to a 25+% discount. That is damn significant.

Or are you more put off that the credit is capped?

The point about multiple units isn't misleading if you look at what the program is at the top level - it's not about AC, its about energy efficent upgrades. The program isn't about buying one category of products, but up to 1500 credit for spending on any of these products.

You don't get $1500 on windows.. and then $1500 on AC, etc. It's total tax credit on energy efficient upgrades. An AC unit is just one of the things you can spend on.

 

Re: Cash for Clunkers: Poster Child For Unintended Consequences

Depends - what must you do to get a certain effiency? In the case of AC systems.. an AC unit is defendant on the furnace as well (because that is where the blower is) so an AC unit can only achieve a certain efficiency on it's own. Higher levels are only achievable with a more capable furnace system.

No, the program is about getting a tax credit on spending on energy efficient systems - not per system.

No, the law is for spending in 2009 and 2010 only, and the credit is 30% of your expenditure up to a maximum of $1,500. The program is a 2 year program, not one.. so it's capped at $1,500 over the 2 years.

 

Re: Cash for Clunkers: Poster Child For Unintended Consequences

It's simple... you get a tax credit of up to 30% of your cost on qualifying energy efficient purchases. The credit is capped at $1,500 for the life of the program. The program is good for purchases made in 2009-2010. So if you spend at least $5,000 in qualified purchases, you can take the credit up to it's maximum.

The discussion about having to replace your whole AC, etc is not really specific to this program at all. It's simply that AC systems only reach a certain efficiency without matching components in the furnace side of the system. Your typical builder grade, or 10+ year old system can not reach the high efficiency ratings by replacing the AC components alone, they are held back by the furnace side.

For AC work to be a qualified purchase, the system must have a resulting efficency ratings of
EER >=13
SEER >= 16

A SEER of 16 or higher isn't possible without the furnace side being a more modern, variable system. This is why most people can't just go and buy a AC coil and condenser, and qualify for the tax credit. You could if your furnace were modern, but the stuff you probably have in place wouldn't be able to do it.

You are looking at is as this were a cash rebate instead of a tax CREDIT. This is a tax credit, which comes right off the bottom line of what you owe in taxes. So if you normally pay about 25% in taxes.. this $1,500 tax credit is equivalent to $6000 in your normal income.

Uncle Sam saying you owe $1,500 less in taxes is like him saying 'here is a $6,000 tax deduction'. Assuming your net tax is about 25%.

A tax credit is by far the most lucrative type of benefit the government can give you.. as it's benefit you can take ON TOP OF all your other tax wizardry and still get the full face value of it.

Curious on the system you selected Pea... did you end up getting a 90 or 95 % efficient furnace? We too got a Carrier Infinity system, but chose not to upgrade to the higher efficiency furnaces and stuck with a 80% one in part due to costs and duct work required.

 

Re: Cash for Clunkers: Poster Child For Unintended Consequences

Well, the tax credit is similar to the one (at least for now) we get for a child tax credit which is huge.

Yes, we are getting the carrier $1k rebate as well.

We have dual zones, one AC unit is 12+ years old, the other is 8+ years old. The older one kicked the bucket, went dry, and blew the compressor. Both were Carrier systems. Since the other system is still working, we chose not to replace both, but only replace the failed system. To get the tax credit, and be able to tap into some of the benefits of the newer systems, we chose to replace both the AC and furnace in the failed system.

We were debating between an American Standard (Trane) system being quoted by M.E. Flow and a Carrier Infinity System quoted by Climatic.

We went with a 3 Ton 17 SEER Two-Stage Carrier Infinity system, with the 80% 60k/90k 2 Stage Furnace. The product families are the same as you quoted, but the model #s will vary based on size, etc. We have a media cabinet installed, but it's nothing fancy but the 4" filter box. We didn't throw on any of the extras.

We shopped a few contractors, but Sunny at Climatic stepped up to win the deal. They've been great to deal with, very responsive, very personal service, and I think we ended up with a good price. Additionally, we have a 10y parts AND labor warranty, so I'm hoping we have the piece of mind for a long time to come.

 

Re: Cash for Clunkers: Poster Child For Unintended Consequences

Tax Credits are few and far between... love them when you can get them

On the warranty.. everyone is playing catch-up on the 10 year parts warranty stuff. The Trane quote we had, covered both parts AND labor - while the Carrier system was parts only.

That was part of our decision process.. the Trane system we were looking at was cheaper, but only a single stage system, but had a better warranty.. which made the decision kind of hard. Climatic made the choice easier for us by leveling the warranty by increasing the Carrier Warranty to 10ys P&L. This was why in part we went with Climatic and the Carrier system. We got the warranty we wanted, with the nicer system, at (what I think was..) a good price.

 

moved all the AC posts into their own thread...

 

Re: Cash for Clunkers: Poster Child For Unintended Consequences

Curious which make and size are these units?

I think the lowest quote we had for a combined system that was in the range that qualified was $7600... but that was an American Standard unit, so at least it was a top shelf brand (Trane).

We only had one quote that was one of the lower brands (Amana) but that quote was for AC only and was in the 6k range! Way overpriced