We have good news if you’ve wanted to invest in more energy-efficient home systems but have put them off due to rising prices! Michigan energy rebates and tax credits are available for Metro Detroit, Birmingham, Farmington Hills, and Northville. The Inflation Reduction Act (IRA) allows Southeast Michigan homeowners to upgrade their heating, cooling, and electrical systems and save money.
What Are Michigan Energy Rebates?
Energy rebates are government or utility company initiatives to encourage homeowners to upgrade to energy-efficient systems and appliances. The primary goal is to incentivize the utilization of clean energy technologies to reduce energy consumption, reduce environmental impact, and lower utility bills.
What Is the Inflation Reduction Act?
The IRA was enacted to tackle climate change and help the U.S. meet its sustainability goals by 2030. It allocates nearly $400 billion in clean energy technologies and resources to improve energy efficiency and cut greenhouse gas emissions by over 40%. Experts say the bill will create up to 1.5 million jobs countrywide, with over 165,000 here in Michigan.
Sample rebate opportunities for a two-person Michigan home include:
- Heating and cooling: $2,000 toward a heat pump
- Water heaters: $1,750 for gas or electric heat pump water heater, gas or propane water heater, hot water boiler, central air, or biomass boiler.
- Electric panels: $4,000
- Electrical wiring: $2,500
- Insulation and weatherization: $1,600
- Home energy audits: $150
Low-income Michigan households qualify for further rebates, and many homeowners also qualify for tax credits on items like EV chargers, solar battery storage installation, and electrical panels.
Available Rebates for Michigan Residents?
Southeast Michigan homeowners can access several financial incentives to lower their energy expenses, including:
- Rebates from 50% to 100% of the purchase and installation costs for energy-efficient appliances, including heat pumps, water heaters, dryers, and more.
- Rebates for single- and multifamily home improvements and repairs that increase energy efficiency.
- A tax credit of 30% for solar panel installation, battery storage systems, and heating and cooling equipment upgrades.
- A 30% tax credit for home improvements that reduce or eliminate energy leakage.
Credits are also available for community solar projects and electrical and clean energy improvements at affordable housing units.
Aside from federal tax credits, Michigan residents can take advantage of the state’s Energy Smart program, which offers rebates for the purchase of numerous Energy Star® appliances, including:
- Furnace rebates: Michigan residents can apply for rebates if they switch to high-efficiency furnaces.
- Heat pump rebates: Michigan heat pump rebates encourage the installation of efficient heat pump technology to replace energy-intensive traditional heating and cooling systems.
- Programmable thermostat rebates: Home and business owners who install an Energy Star® certified thermostat may qualify for rebates.
- Dehumidifier rebates: Residents of Michigan can receive rebates for switching to dehumidifiers with smart features that conserve energy.
The Michigan Saves program offers homeowners a convenient way to finance energy-saving improvements. The state’s utility companies also provide various utility rebate programs — contact your provider to learn more.
Qualifications for Rebates
Eligibility requirements to qualify for energy rebates in Michigan typically include:
- Ownership of the home.
- Installation of qualifying equipment, for example, homeowners may become eligible for the consumer energy furnace rebate when they switch to an energy-efficient heating system.
- Use of certified installers including Randazzo Heating, Cooling, and Electrical.
What Is SEER2 and Why Is It Important?
On January 1, 2023, a revised energy rating for new ACs and heat pumps came into effect. SEER2 (Seasonal Energy Efficiency Ratio 2) provides a more accurate measure of energy efficiency under demanding conditions. Original SEER ratings are still relevant for existing systems, but all new installations must comply with SEER2 ratings.
To determine the new rating, regulators used stricter testing in conditions that more closely resembled real-world environments. Based on the different climate and heating needs across the country, the Department of Energy created three regions, each with different minimum SEER2 requirements. Michigan falls into its North region.
While the numerical values of SEER2 ratings are lower than before, this is due to a change in the SEER testing procedures rather than a decrease in efficiency standards.
Michigan’s minimum SEER2 ratings are as follows:
- Residential ACs: 13.4 (equivalent to around 14 under the previous SEER system)
- Heat pumps: 14.3 (equivalent to around 15 under the previous SEER system)
The higher the SEER2 rating of an appliance, the more efficient the system is. SEER2 ratings play a significant role in obtaining rebates for air conditioning units or heat pumps, with most programs setting a minimum requirement for eligibility. For instance, you might qualify for a rebate for systems with a SEER2 rating of 16 or higher. These requirements ensure the rebates promote the installation of more energy-efficient equipment.
Considering Michigan’s SEER2 energy efficiency standards when buying and installing a new AC or heat pump is essential for several reasons:
- Energy efficiency: SEER2 ratings help consumers compare the energy efficiency of different cooling systems to reduce their equipment’s environmental impact.
- Cost savings: High SEER2-rated systems can provide significant energy cost savings over a system’s lifetime compared to previous SEER-rated systems.
- Environmental impact: AC and heat pump systems use substantial energy, contributing to greenhouse gas emissions. Systems with higher SEER2 ratings reduce carbon footprints.
- Regulatory compliance: Compliance with local, state, and federal SEER2 requirements is mandatory in many jurisdictions.
What Changes Can I Make to Get the Rebate?
Michigan HVAC tax rebates for residential customers cover numerous improvements and upgrades, including:
- The purchase and installation of high-efficiency central air conditioners and other qualified gas, electric, and propane HVAC systems.
- ENERGY STAR® windows, doors, and skylight installation.
Remember that while DIY projects qualify for some incentives, others require you to work with a professional installer.
How to Apply for Michigan Energy Rebates
Homeowners applying for energy rebates in the Great Lakes State should follow this six-step process:
- Research which rebates you may qualify for.
- Choose a contractor that is certified for the specific rebate program.
- Install the energy-efficient system.
- Collect all the required supporting documentation, such as receipts, to support the rebate application.
- Fill out the rebate application.
- Submit the application with the required documents to the appropriate program director.
If your application is approved, you will receive your rebate.
3 Benefits of Energy Efficiency Upgrades
Investing in energy-efficient upgrades is a savvy way for homeowners to embrace modern technologies and improve their living spaces.
Benefits include:
- Lower energy bills
- Reduced environmental impact
- Increased home value and comfort
Why Choose Randazzo Heating, Cooling, and Electrical?
Since 1988, Randazzo Heating, Cooling, and Electrical has delivered high-quality HVAC and electrical services to Southeast Michigan homeowners, ensuring lasting home comfort. We are Michigan’s largest award-winning Lennox Premier dealer and offer only the finest installation and repair services.
Talk to one of our HVAC specialists today to learn more about reducing your energy bills and saving potentially thousands of dollars on purchasing qualified home appliances.
Contact us online or call 586-271-8003 to learn more about your neighborhood’s Inflation Reduction Act credits and tax rebates.
Last Updated on April 10th, 2025 at 8:00AM EST
