Energy Rebates Explained: How Upgrading Your HVAC System Pays Off

Last Updated on June 19, 2023 by Kimberly Crawford

Investing in a new Heating, Ventilation, and Air Conditioning (HVAC) system can be a considerable expense for most homeowners. Yet, did you know that energy rebates can help offset this cost significantly?  

Energy rebates can make the price of upgrading your HVAC system much more affordable. What’s more, these rebates effectively lower your long-term energy costs. Read on to learn more details about how your HVAC upgrade can pay off. 

What Are Energy Rebates? 

In simplest terms, energy rebates are incentives from utility companies or government agencies to encourage you to switch to energy-saving systems. When you upgrade to a more energy-efficient HVAC system, you can save more than just on monthly bills. You’re also reducing the strain on the power grid. That’s why energy providers are more than willing to offer rebates as a token of appreciation. 

There are different types of energy rebates. Before you take advantage of the Ontario energy rebate program, it may be handy to know the following: 

  • Utility Rebates: Many local utility companies offer rebates to customers who install energy-efficient HVAC systems. These can be a percentage of the purchase price or a fixed amount, and they’re usually applied as a credit on your utility bill. 
  • Manufacturer Rebates: HVAC manufacturers often provide rebates directly to customers who purchase their high-efficiency models. These are typically in the form of a check or prepaid card that’s mailed to you after purchase. 
  • State And Local Government Rebates: To encourage homeowners to upgrade to energy-efficient appliances, several states, and municipalities offer rebate programs, including those for HVAC systems. These programs may vary widely, so it’s essential to check with local agencies. 
  • Federal Tax Credits: While not technically a rebate, federal tax credits for energy efficiency can reduce your tax bill. You can claim these credits when you file your annual tax return. 

Considering these different types of rebates, it becomes evident that upgrading your HVAC system can be financially beneficial. Therefore, if your HVAC needs upgrading, opt for a more efficient system that’s eligible for rebates. 

How Do Energy Rebates Work? 

air conditioner

Think of energy rebates as a cash-back program that rewards your eco-friendly decisions. With the purchase of an energy-efficient HVAC system, you could receive a portion of the cost back. This rebate could be a check, direct deposit, or a reduction on your utility bill. 

Once you’ve determined the type of rebate most relevant to your situation, it’s time to check with your local utility company or a government agency to understand the specific rebates they offer. Some providers may even have an online application process, which is more streamlined and hassle-free. 

The Benefits Of Upgrading Your HVAC System 

Exploring the benefits of an energy-efficient HVAC system reveals substantial potential savings. Such can originate from the following factors: 

  • Reduced Energy Consumption: The main advantage of energy-efficient HVAC systems is that they consume less energy by maximizing the output and minimizing the input. For instance, they use energy-saving settings and operate at variable speeds to avoid unnecessary energy usage. This reduction in energy consumption leads directly to savings on your energy bills. 
  • Longer Lifespan: Energy-efficient HVAC systems often last longer. The design of these products resists wear and tear, resulting in fewer calls to the repair service. Over time, this durability can result in significant savings. Remember, avoiding repairs equates to saving money. 
  • Tax Credits: In some cases, upgrading to an energy-efficient HVAC system can qualify you for tax credits, which can help offset the cost of the system. To take advantage of these savings, consult a tax professional or research the current year’s tax credits for energy efficiency. 
  • Lower Maintenance Costs: High-efficiency HVAC systems are designed to require little maintenance. These systems often have longer warranty periods, which means less out-of-pocket for repairs or replacements. 
  • Improved Indoor Air Quality: While not a direct financial saving, energy-efficient HVAC systems often lead to better indoor air quality. These systems can more effectively regulate humidity levels and filter out pollutants. This can result in fewer health issues, which can lead to savings on healthcare costs. 

Understanding potential energy savings makes upgrading your HVAC system even more enticing. These savings, coupled with the energy rebates, make an upgrade a financially sound decision. 

Calculating Potential Savings 

saving money

Various factors, such as your local climate, your home’s size, and the new HVAC system’s efficiency, will determine your actual savings. However, some estimates suggest that you could save up to 20% on your heating and cooling costs by upgrading to an energy-efficient system. 

For example, if your current heating and cooling expenses are USD$200 per month, a 20% reduction translates to a monthly saving of USD$40. This amounts to USD$480 in a year. Over the typical 15-year lifespan of an HVAC system, your savings could total as much as USD$7,200! 

Furthermore, energy-efficient HVAC systems often feature a Seasonal Energy Efficiency Ratio (SEER) rating. A higher SEER rating indicates a more efficient unit. For instance, a unit with a SEER rating of 16 is twice as efficient as one rated at 8. Therefore, a higher SEER rating could significantly increase potential savings from an HVAC upgrade. 

How To Qualify For Rebates? 

So, how does one qualify for these rebates? Each program has its own set of criteria. However, there are some common requirements you’ll often see to get those home energy tax credits

  • Purchase of Energy-Efficient Equipment: You’ll need to buy an HVAC system that meets certain efficiency standards. These standards correspond to ratings such as SEER for air conditioners or the Annual Fuel Utilization Efficiency (AFUE) for furnaces. 
  • Proper Installation: In many cases, the HVAC system must be installed by a licensed professional to qualify for a rebate. 
  • Documentation: You’ll likely need to provide proof of purchase, such as a receipt and documentation of the proper installation. 
  • Application: Most programs require you to apply for the rebate. This might involve filling out a form and sending it to the utility company, manufacturer, or government agency. 

Remember, not all HVAC systems qualify for each type of rebate. It’s crucial to check the specific requirements of the rebate program you’re interested in. That way, you’re sure to make an informed decision when upgrading your HVAC system. 


Upgrading your HVAC system is not only beneficial for the environment, but it’s also financially advantageous for you. By understanding and taking advantage of energy rebates, you can achieve significant savings. You’re also investing wisely in your home’s future and, most importantly, playing your part in reducing energy consumption.