You can keep your cool (by upgrading your air conditioning system) and stay warmer (by upgrading your furnace or boiler and hot water heater) with sizeable Federal income tax credits because of a provision in the Economic Recovery Act (“the “American Recovery and Reinvestment Act of 2009”). In 2009 and 2010 you can claim these credits for upgrading your heating, cooling and water heating, as well as some incentive dollars from your State government, your city, county or town, and even from your utility company. 
Resources to help you with planning and budgeting:
State and local government incentives, and utility company incentives offer everything from special low-interest financing for purchases of new HVAC systems to exceptions from real estate or personal property taxes to rebates on the cost of the equipment and production incentives on renewable energy systems. So you can keep your cool while making sure you will have a warm winter at lower heating cost.
You can claim a tax credit for 30% of the cost of the following items and systems up to the $1,500 per year limit: (the limit is a total tax credit in a tax year of $1,500 for all upgrades)
It is important to shop carefully because not all appliances with the ENERGY STAR label qualify for these credits.
You also can claim a tax credit of 30% without the $1,500 limit for the following:
  1. Geo-Thermal Heat Pumps
  2. Solar Water Heating Systems (subject to several qualifying factors)
  3. Photovoltaic (Solar heating) Systems
  4. Residential Small Wind Energy Systems
  5. Residential Fuel Cell and micro-turbine systems
Any of these systems must be installed before December 31, 2016 to qualify for the tax credit. Homeowners also must file IRS Tax Form 5695 (2009 version) to claim the credit.
Once you decide which type of technology is right for you, calculate the amount you will earn in tax credits from the U.S. Government. Then research what you can expect to get from the state and local government by visiting Just click on your state and read about the credits and other incentives available to you from government or utility companies. Then add up all of these incentives and figure your actual cost for a new heating/cooling system that will make your life more comfortable and your comfort less expensive. You see, the final step is to calculate how much you will save every month in heating and cooling costs because of the efficiency of your new equipment or system. 

So keep your cool this spring and summer. Then stay warm during the coming winter while you count up your savings and enjoy the comfort of a more energy-efficient home. 

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