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Federal Incentives - Rheem Manufacturing Company

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Document DEVICE REPORTRHM5752B Rheem IRA-Tax-Downloadable-Reference-Guide R3c
TAKING ADVANTAGE OF TA X INCENTIVES IN
2023 & BEYOND
LE ARN HOW THE INFL ATION REDUCTION ACT OF 2022 CAN LEAD TO SAVINGS ON HIGH-EFFICIENCY HVAC SYSTEMS

INFLATION REDUCTION ACT OVERVIEW
What is the Inflation Reduction Act of 2022?
Passed in 2022 by the US Government, the Inflation Reduction Act (IRA) aims to make a down payment on deficit reduction to fight inflation, invest in domestic energy production and manufacturing, and reduce carbon emissions over the course of 10 years. This is particularly relevant to homeowners, home builders and HVAC contractors, as the IRA includes enhanced tax incentives and consumer rebates for the installation of heat pumps and high-efficiency air conditioners and furnaces.
Purpose of This Guide
This guide includes helpful information on the IRA as it pertains to the HVAC industry, provides a list of Rheem equipment that's eligible for tax credits and rebates, and offers recommendations for how contractors can be prepared for the legislation's long-term implications.
Tax Credits vs. Consumer Rebates
The IRA announced the extension and expansion of 25C, 25D and 45L tax credits for CEE highest efficiency and ENERGY STAR® certified equipment, as well as a $4.3 billion program for stateadministered rebates on ENERGY STAR® certified equipment.
Tax Credits
The tax credits in place now are in effect for the next 10 years. When it comes to tax credits, the IRA has the following implications: · Extends and expands existing 25C and 25D tax credits to homeowners installing applicable
high-efficiency HVAC equipment · Extends and expands existing 45L tax credits to home builders installing applicable
high-efficiency HVAC equipment
Rebates
As the IRA is relatively new legislation, the rebate program is still in development by the states with an expected launch date in late 2023. Here are a few important things to keep in mind regarding the rebates: · Funds will be allocated to state energy offices, which means depending on the state, some rebate programs
may take some time to get started · Exact funding allocations will vary by state · Not all households may be eligible for the rebate program
­ Those earning less than 80% of the area median income may qualify for the full rebate ­ Those earning between 80­150% of the area median income may be eligible
for a partial rebate (50%) · Rebate program ends after state funds are expended

EEHIC
WHAT IS NEW FOR 2023
Energy Efficient Home Improvement Credit (25C)
A Valuable and Long-term Tax Credit Extension

Effective January 1, 2023, through December 31, 2032
No income requirements
Available Tax Credits

No lifetime tax credit cap
10% 30%
Increases the percentage of the credit from 10% to 30% of
equipment and installation cost

Not limited to primary residences
Annual $1,200 nonrefundable tax credit for eligible HVAC systems, insulation and air sealing; and a $2,000 tax credit for eligible heat pumps

Up to $2,000 for electric heat pumps
Qualifications

Up to $600 for furnaces (natural gas, propane or oil)

FORM 1040

Split and Packaged Air Conditioners and Heat Pumps: meet or exceed CEE highest efficiency
tier (excluding advanced tier)
Gas Furnaces:  97% AFUE

To Qualify, Homeowners Must Owe Taxes
Tax credit offsets federal taxes owed

Up to $600 for air conditioners
What is CEE?
The Consortium of Energy Efficiency (CEE) is a network of gas and electric efficiency program administrators and
sets CEE product tiers to differentiate highly efficient HVAC equipment for incentive and promotion programs.

EEHIC

Rheem Equipment Eligible for the Energy Efficient Home Improvement (25C) Tax Credit

IMPORTANT: Listed eligible models are based on CEE Tier Guidance as of 1/19/23. Split & Packaged Heat Pumps1:

North2

South (Southeast3/Southwest4)

Split Ducted Heat Pumps
· Qualifications:  15.2 SEER2,  10.0 EER2,  8.1 HSPF2,  1.75 COP @ 5°F,  58% @17°F/47°F or  70% @5°F/47°F
· Eligible Rheem Equipment: RP18AZ24, RP18AZ36, RP18AZ48, RP18AZ60, RP15AZ30, RP15AZ36, RP15AZ42, RP15AZ48, RP15AZ60, RD16AZ24, RD16AZ30, RD16AZ36, WP15AZ30, WP15AZ36, WP15AZ42, WP15AZ48, WP15AZ60
Split Non-Ducted Heat Pumps
· Qualifications:  16.0 SEER2,  9.0 EER2,  9.5 HSPF2,  1.75 COP @ 5°F,  58% @17°F/47°F or  70% @5°F/47°F
· Eligible Rheem Equipment: RO1HGZ42AJ8S, RO1HGZ42AJ8S, RO1HHZ12AJ8S, ROSH09BFWJ, ROSH12BFWJ, ROSH24VGSN, ROSH36VGSN, ROSH42VGSN, ROSH42VGSN, RO1HHZ12AJ3S, RO1HHZ18AJ3S, RO1HHZ24AJ3S, RO1HHZ30AJ3S, RO1HHZ12AJ2S, RO1HHZ09AJ3S, RO1HHZ12AJ2H, ROSH18VGSN, ROSH24VGSN, ROSH30VGSN, RO1HFZ09AJ2S, RO1HFZ12AJ2S, RO1HFZ15AJ2S, RO1HFZ09AJ2H, RO1HFZ12AJ2H, RO1HFZ15AJ2H, RO1HFZ18AJ2H, RO1HFZ24AJ2H, RO1HFZ30AJ2H, RO1HHZ09AJ2H, ROMH18FXZHJ, ROMH24FXZHJ, ROMH36FXZHJ, ROSH18AHXHJ, ROSH24AHXHJ, ROSH30AHXHJ, ROSH09AFFHJ, ROSH12AFFHJ, ROSH15AFFHJ, ROSH09AFFJ, ROSH12AFFJ, ROSH15AFFJ, RO1HGZ09AJ1S, RO1HGZ09AJ1H, RO1HGZ12AJ1S, RO1HGZ12AJ1H, RO1HGZ15AJ1S, RO1HGZ15AJ1H, RO1HHZ18AJ2S, RO1HHZ24AJ2S, RO1HHZ09AJ8S, RO1HHZ12AJ8S, RO1HHZ18AJ8S, RO1HHZ09AJ2S, RO2HFZ18AJ1H, RO3HFZ24AJ1H, RO4HFZ36AJ1H, ROMH18AFXZJ
Packaged Heat Pumps
· Qualifications:  15.2 SEER2,  10.0 EER2,  8.1 HSPF2,  1.75 COP @ 5°F,  58% @17°F/47°F or  70% @5°F/47°F
· Eligible Rheem Equipment: n/a

Split Ducted Heat Pumps
· Qualifications:  15.2 SEER2,  11.7 EER2,  7.8 HSPF2
· Eligible Rheem Equipment: RP18AZ24, RP18AZ36, RP18AZ48, RP18AZ60, RP15AZ18, RP15AZ24, RP15AZ30, RP15AZ36, RP15AZ42, RP15AZ48, RP15AZ60, RD16AZ24, RD16AZ30, RD16AZ36, WP15AZ30, WP15AZ36, WP15AZ42, WP15AZ48, WP15AZ60
Split Non-Ducted Heat Pumps
· Qualifications:  16 SEER2,  12.0 EER2,  9.0 HSPF2
· Eligible Rheem Equipment: ROSH09BFWJ, ROSH12BFWJ, RO1HHZ18AJ3S, RO1HHZ12AJ2S, RO1HHZ09AJ3S, RO1HHZ12AJ2H, ROSH18VGSN, ROSH24VGSN, RO1HFZ09AJ2S, RO1HFZ12AJ2S, RO1HFZ15AJ2S, RO1HFZ09AJ2H, RO1HFZ12AJ2H, RO1HFZ15AJ2H, RO1HFZ18AJ2H, RO1HFZ24AJ2H, RO1HFZ30AJ2H, RO1HHZ09AJ2H, ROMH18FXZHJ, ROMH24FXZHJ, ROMH36FXZHJ, ROSH18AHXHJ, ROSH24AHXHJ, ROSH30AHXHJ, ROSH09AFFHJ, ROSH12AFFHJ, ROSH15AFFHJ, ROSH09AFFJ, ROSH12AFFJ, ROSH15AFFJ, RO1HGZ09AJ1S, RO1HGZ09AJ1H, RO1HGZ12AJ1S, RO1HGZ12AJ1H, RO1HGZ15AJ1S, RO1HGZ15AJ1H, RO1HHZ18AJ2S, RO1HHZ24AJ2S, RO1HHZ09AJ8S, RO1HHZ12AJ8S, RO1HHZ18AJ8S, RO1HHZ09AJ2S, RO2HFZ18AJ1H, RO3HFZ24AJ1H, RO4HFZ36AJ1H, ROMH18AFXZJ
Packaged Heat Pumps
· Qualifications:  15.2 SEER2,  10.6 EER2,  7.2 HSPF2
· Eligible Rheem Equipment: RHPAZS024, RHPXZS036, RHPXZS048, RHPXZS060, RHPBZS024, RHPBZS036, RHPBZS048, RHPBZS060 (Coming Summer 2023)

Split & Packaged Air Conditioners1:
Split Air Conditioners · Qualifications:  16 SEER2,  12.0 EER2 · Eligible Rheem Equipment: RA18AZ24, RA18AZ36,
RA18AZ48, RA18AZ60, RA14AZ18, RA14AZ24, RA14AZ30, WA14AZ18, WA14AZ24, WA14AZ30
Packaged Air Conditioners · Qualifications:  15.2 SEER2,  11.5 EER2 · Eligible Rheem Equipment: RACAZS024, RACAZS036,
RACXZS048, RACXZS060, RGEAZS024, RGEAZS036, RGEXZS048, RGEXZS060 (Coming Spring 2023)

Gas, Propane or Oil Furnaces & Fans:
Gas Furnaces · Qualifications:  97% AFUE · Eligible Rheem Equipment: R98MV, R97MV

ELECTRIC HOME REBATE PROGRAM
AVAILABLE REBATES & ELIGIBLE EQUIPMENT
High Efficiency Electric Home Rebate Program
Consumer Rebates on Qualifying Heat Pumps, Panel Replacements and Electrical Wiring

Program launch is expected no sooner than Q4 2023

$4.275B

Funds apportioned to states based on population formula

Eligible heat pumps systems are ENERGY STAR® certified

States could contract rebate function to 3rd parties for multifamily customers for installation of electrification equipment

Available Rebates Based on Income < 80% of Area Median Income
Up to $8,000 for electric heat pumps

Up to $4,000 for panel replacement

Up to $14,000 per household

80­150% of Area Median Income
Up to $4,000 for electric heat pumps

Up to $2,000 for panel replacement

Up to $7,000 per household

Rheem Equipment Eligible for the Electric Home Rebate Program
IMPORTANT: Listed eligible models are based on ENERGY STAR® 6.1 Performance Criteria as of 12/15/22.
Split Heat Pumps5:
· RP15AZ, WP15AZ ­ Our new 15.2 SEER2 heat pump family is designed with ENERGY STAR® in mind · RD16AZ ­ Our Sound and Space Constraint Solution has been refreshed for 2023, with a new model number
and exciting new features. Look for additional product information coming soon in 2023, including product specification and AHRI-certified ratings · RD17AZ ­ Our universal heat pump design, offering a flexible combination of system matchups in a compact footprint, is launching in mid-2023--as part of our Sound and Space Constraint Solution

FAQs
FAQS & IMPLICATIONS ­ ALL PROGRAMS
Q: How does the IRA legislation affect Rheem contractors?
A: Contractors now have another benefit to present to customers when selling high-efficiency equipment: savings with tax credits or rebates.
Q: How does the IRA legislation affect homeowners?
A: The new legislation incentivizes the purchase of higher efficiency HVAC equipment by making it more affordable.
Q: Is the $2,000 tax credit for a heat pump system conditioned on replacing a central air conditioner and furnace?
A: No, replacement systems are eligible, and consumers who choose to replace an existing heat pump with a new heat pump can claim the credit.
Q: When will the High Efficiency Electric Home Rebate Program launch?
A: The Department of Energy is expected to issue rebate program rules in Q2 2023, and we expect the states to set up rebate programs for state constituent participation in Q4 of 2023.
Q: Can a customer claim both an Energy Efficient Home Improvement tax credit and a rebate through the High Efficiency Electric Home Rebate Program?
A: There is no statutory prohibition on a customer claiming both a credit and rebate, but the US Treasury Department must issue final implementing rules on incentive layering.
Q: How can I determine my eligibility to access a rebate through the High Efficiency Electric Home Rebate Program?
A: The US Department of Energy State & Community Energy Programs Office provides consumers with additional information on the High Efficiency Electric Home Rebate Program, including income qualification rules.
Long-Term Implications of the Inflation Reduction Act
The long-term nature of the IRA, and expected changes in future minimum efficiency levels qualifying for the consumer tax credits, require planning for the implications of these changes. Looking ahead, sellers of HVAC systems should be ready for:
· An increase in sales of high-efficiency systems
· Increased interest in heat pumps
· Increased need for inventory and storage of higher efficiency systems
When it comes to state-specific rebates, we recommend paying close attention to industry news in your area, as many programs will likely develop over time. Contact your state energy offices to gather details on local rebate programs.

WHY CHOOSE RHEEM
As part of a commitment to designing products that do good by our customers, partners, employees-- and planet, Rheem® has always offered high-efficiency products. And thanks to the Inflation Reduction Act of 2022, consumers have a renewed interest in these products. We encourage you to stay informed and ready to communicate the potential tax credits, necessary efficiency requirements and how Rheem products meet those criteria.

For continued updates on these tax incentives and other changes for 2023 and 2025, visit Rheem.com/HVACKnowZone

1Visit ahridirectory.org to obtain an AHRI certificate with the system combinations' efficiency ratings to confirm tax credit qualifications. 2North states include Alaska, Colorado, Connecticut, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Utah, Vermont, Washington, West Virginia, Wisconsin and Wyoming. 3Southeast states include Alabama, Arkansas, Delaware, Florida, Georgia, Hawaii, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia and the District of Columbia, US Territories. 4Southwest states include Arizona, California, Nevada and New Mexico. 5The models qualify only when installed as part of a matched system combination that meets 2023 ENERGY STAR® criteria.
In keeping with its policy of continuous progress and product improvement, Rheem reserves the right to make changes without notice.

Printed in the USA | 03/23 | Form No. M11-1122

© 2023 Rheem Manufacturing Company. Rheem trademarks owned by Rheem Manufacturing Company.



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