Upgrading your home’s HVAC system is a smart way to stay comfortable year-round, but did you know it can also save you hundreds, or even thousands, of dollars?
Between federal tax credits, state rebates, and utility incentives, homeowners in Iowa have a unique opportunity to make their heating and cooling systems more efficient without breaking the bank.
At Lenz Heating & Cooling, we’re here to guide you through every step of the process, helping you maximize savings while improving your home’s comfort and energy efficiency.
Why High-Efficiency HVAC Systems Are Worth It
Upgrading to a high-efficiency HVAC system keeps your home comfortable while reducing energy costs and maintenance worries.
Here’s why making the switch is worth considering:
1. Lower Energy Bills
High-efficiency systems use advanced technology to heat and cool your home with less energy.
On average, homeowners can save up to 20% on heating and cooling costs compared to older, standard systems. Over time, these savings add up each year.
2. Fewer Repairs and Longer Lifespan
Older HVAC systems often require frequent repairs, and parts can wear out faster.
High-efficiency systems are built to last longer and operate more reliably, meaning fewer emergency repairs and a longer system life. This helps you avoid unexpected costs and keeps your home comfortable year-round.
3. Increased Home Value
Energy efficiency is a major selling point for homebuyers.
Installing a modern, high-efficiency HVAC system can increase your home’s resale value while making it more attractive to prospective buyers.
4. Environmental Benefits
High-efficiency HVAC systems use less energy, which reduces your household’s carbon footprint.
By upgrading, you’re not only saving money, but you’re also contributing to a more sustainable future for your family and community.
5. Comfort You Can Count On
Modern HVAC systems maintain more consistent temperatures, better humidity control, and improved indoor air quality.
That means no more hot or cold spots, excessive noise, or stuffy rooms—just reliable, year-round comfort.
Upgrading now allows you to take advantage of federal tax credits, Iowa state rebates, and utility incentives, making it more affordable than ever to invest in a system that
Federal Tax Credits: Up to $3,200 in Savings
The federal government encourages homeowners to invest in energy-efficient upgrades through tax credits. These credits are applied directly to your federal tax bill, meaning you pay less when you file your taxes.
Important: The credit expires December 31, 2025 — if upgrading your HVAC is on your to-do list, prioritize it now!
What Qualifies
The tax credit applies to several high-efficiency systems, including central air conditioners, heat pumps, furnaces, and boilers.
The key requirement is that your equipment meets specific efficiency ratings set by the Department of Energy.
How Much You Can Save
The credit is 30% of the project cost, up to the following annual limits for qualifying equipment:
Equipment Type | Maximum Annual Credit |
High-Efficiency Heat Pumps (including water heaters) | Up to $2,000 |
Qualifying Central Air Conditioners | Up to $600 |
Qualifying Natural Gas/Propane/Oil Furnaces or Boilers | Up to $600 |
Top-rated, high-efficiency systems can reach the full annual credit of $3,200 by combining the $2,000 heat pump credit with up to $1,200 from other eligible home envelope or system improvements (such as insulation, windows, doors, or an electric panel upgrade).
How to Claim It
Claiming the credit is straightforward, but you need to keep good records.
When you file your taxes, you’ll need to provide:
- Installation receipt – proof you paid for the system
- Manufacturer’s certification – shows the equipment meets efficiency requirements
- Energy ratings – confirms the system qualifies for the credit
Our team at Lenz Heating & Cooling can help ensure your system qualifies and provide the documentation you need to claim your savings.
Iowa State and Utility Rebates
In addition to federal tax credits, Iowa homeowners can save even more through state and utility rebate programs. These incentives help reduce the upfront cost of high-efficiency HVAC systems while lowering energy bills over time.
Examples include:
- MidAmerican Energy Rebates: Discounts on high-efficiency furnaces, air conditioners, and heat pumps.
- Alliant Energy Incentives: Rebates for energy-efficient HVAC equipment and smart thermostats.
- Local Utility Programs: Some municipal utilities offer additional rebates—check with your provider.
These programs can sometimes be combined with federal tax credits to maximize your savings, meaning you could pay significantly less upfront for a system that keeps your home comfortable for years.
Combine Incentives for Bigger HVAC Savings
Here’s a real example of how these incentives can work together:
Let’s say your new high-efficiency HVAC system costs $8,000 to install.
With all incentives combined, you can save $4,700.
Your actual out-of-pocket cost drops to just $3,300—and that’s before factoring in the 15–20 year lifespan of the new system and the energy savings you’ll enjoy every month.
Step-by-Step Guide to Claiming Credits and Rebates
- Choose your high-efficiency system: Consult with an HVAC expert to select the best system for your home.
- Install your system: Hire a certified technician to ensure proper installation, which is required for eligibility.
- Gather documentation: Keep your invoice, manufacturer certifications, and energy ratings.
- Submit rebate applications: Follow the specific instructions for state and utility programs.
- Claim your federal tax credit: Include your documentation with your tax filing.
Following these steps ensures you receive the maximum financial benefits while upgrading your home’s comfort and efficiency.
Common Questions About HVAC Incentives
Can I really combine the federal credit with state rebates?
Yes—in fact, you should. These programs are designed to work together. Just make sure you have proper documentation for each one.
Do I need to own my home?
Generally, yes. Most programs require that you own the home where the system is installed. Renters should check with their landlords and utility companies about available options.
What if I install the system in 2025 but file my taxes in 2026?
The federal tax credit applies to the year you install the system, not the year you file your taxes. So if you install in 2025, you claim it when you file your 2025 taxes in 2026.
Just make sure installation is complete by December 31, 2025, to qualify.
What if my system qualifies for a rebate, but I don't apply in time?
Unfortunately, you’ll likely miss out. That’s why it’s important to stay on top of your utility company’s deadlines. Work with your installer to keep everything organized.
Why Lenz Heating & Cooling Is Your Best Choice
At Lenz Heating & Cooling, we’ve been serving the Des Moines area since 2009 with top-quality heating and cooling services. Our family-, veteran-, and woman-owned business takes pride in helping homeowners like you save money while staying comfortable.
- Free Estimates: Know your cost upfront.
- Flexible Financing: Make upgrades affordable on your budget.
- Service Agreements: Keep your system running efficiently with regular maintenance.
- 24/7 Emergency Services: Fast, reliable help when you need it.
We guide you through federal and state incentives so you can make smart, cost-effective decisions for your home.
Take Action Today: Upgrade and Save
Don’t wait—the federal tax credit expires December 31, 2025, and Iowa rebates are limited.
Upgrading to a high-efficiency HVAC system now means more comfort, lower energy bills, and thousands in potential savings.
Call Lenz Heating & Cooling at 515-225-6446 or request a free estimate online to explore your options and start saving today!
