Are you getting a tax refund? In California, the average tax refund is around $3,500. Before you blow it all on shoes, clothes, restaurants, or entertainment, think about investing that money back into your home. It may not be the most exciting way to spend your refund, but it’s a smart investment.
If your HVAC system is over 10 years old, consider replacing it with a new energy-efficient system that could end up paying for itself with all the energy savings you’ll get.
So, how do you decide if you should spend your tax refund on a new HVAC system.
If this is your forever home, it’s a good idea to focus on things like heating, ventilation, and air conditioning to improve your health and wellbeing.
Replacing the HVAC system could be a good idea if you are selling your home as well. Any system that is 15 years or older probably only has a few years left before it needs to be replaced. Additionally, buyers worry about utility bills and desire a low-maintenance lifestyle.
Regardless, it’s a good idea to have your heating and cooling system inspected by a qualified HVAC professional to get a sense of the current condition of the system. Learn about the different types of HVAC systems available before making a final decision.
Old HVAC units get less and less energy-efficient every year. If your air conditioner is over 10 years old, consider replacing it with a high-efficiency unit. A new high-efficiency HVAC system can save you around 15 to 30 percent on your heating and cooling costs.
Considering HVAC systems account for around half of your home’s total energy use, you’ll end up saving hundreds of dollars every year. Now, you can spend your energy savings on fun things like vacations.
Look for air conditioning units with a high Seasonal Energy Efficiency Ratio (SEER) and a furnace with a high Annual Fuel Utilization Efficiency (AFUE). The higher the SEER and AFUE rating, the lower your energy bills. Similar to SEER and AFUE, the Heating Seasonal Performance Factor (HSPF) is the rating for the heating portion of heat pumps. Again, the higher the number, the better.
As you may already know, the Environmental Protection Agency (EPA) is phasing out R-22 refrigerant (aka HCFC-22). This means that if you have a refrigerant leak and need to recharge it, the cost will be much higher. New production of R-22 refrigerant will be phased out completely by 2020. After that, the only R-22 refrigerant available will be from previously-produced quantities.
HCFC-22 refrigerant prices have already started rising significantly. Common refrigerant blends that contain HCFC-22 include R-401A, R-402A, R-408A, R-409A, R-414B, and R-502A (EPA).
If you want to avoid spending a lot of money on new refrigerant for your HVAC system, invest in a new model that uses a cheaper and more environmentally refrigerant.
In most cases, it’s best to replace both heating and cooling units at the same time. This is because the air conditioner and furnace use the same indoor air handler. For optimum performance, you want the indoor and outdoor systems to match. Not only that, by bundling the furnace and AC replacement, you’ll save a lot of money on installation costs.
While you may be able to use the old furnace/air handler with a new air conditioner, the system won’t operate at peak potential.
According to the IRS, “You may be able to take a credit of 30% of your costs of qualified solar electric property, solar water heating property, small wind energy property, geothermal heat pump property, and fuel cell property.”
Unfortunately, the nonbusiness energy property credit expired on December 31, 2017. Learn more about writing off HVAC systems on your taxes.
If your HVAC system still has a lot of useful life left, consider smaller improvements, such as programmable/smart thermostats, air scrubbers, purification systems, duct dampers, and other HVAC upgrades. This will improve quality of life and increase home value.
If your energy bills keep rising and it’s hard to maintain the right temperature and humidity ratings, it’s time to consider HVAC replacement. Put your tax refund to work by investing it back into your home.
To help you choose an efficient heating and cooling system that best fits your needs, speak with the professionals at Service Champions. We guarantee your new heating and cooling system will be properly installed and operate according to manufacturer efficiency ratings.
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