The US government is providing a tax incentive to homeowners to entice them to purchase energy-efficient products for their homes. These products are encouraged to reduce energy usage, cut monthly utility bills, and support environmental sustainability.

In this article, we will learn about tankless water heaters and discuss why a homeowner might consider switching from a traditional water heater to a tankless one. We will then explain the 2024 tax incentive program and the benefits of installing energy-efficient products, including but not restricted to tankless water heaters.

What Is A Tankless Heater?

Tankless hot water heaters produce unlimited hot water whenever needed without storing and heating water in a storage tank. When a faucet is opened, cold water passes through a heat exchanger and is heated by a gas burner or an electric heating element, and the hot water is directed to where it is needed.

Unlimited Hot Water

Tankless heaters do not store water like a traditional heater does. This saves on energy usage since stored water may be heated and reheated several times before the hot water is called for in the home. 

Tankless heaters heat on demand and produce unlimited hot water for as long as hot water is being called for. Typically, they can produce 2-5 gallons of hot water a minute. If more water is needed, second and third heaters can be installed to supply appliances that require large amounts of hot water, such as a dishwasher.

Long Life

While traditional hot water heaters have a life expectancy of 8-12 years, a tankless heater can far outperform them with nearly double the life expectancy. This long life counters a tankless water heater’s increased purchase and installation costs, and its increased durability makes it a good choice over traditional tank-style heaters.

Space Saver

Upgrading to a tankless heater is smart for those with space restrictions. Tankless heaters can easily be installed inside cabinets or beneath a stairwell, saving valuable floor space when needed.

Smart Technology

Along with controlling your HVAC system, your home security, and a vast array of other systems, you can now control your tankless hot water heater thanks to Smart technology. Commands available include remote on and off, precise temperature control, and reminders when service is due. 

Tax Credit Facts

Tax credit amounts can fluctuate, so we recommend doing research to see how they apply to where you live. These incentives are based on a product’s energy efficiency rating, and homeowners must adhere to strict guidelines to take advantage of these credits.

How Much Can You Claim?

The amount a homeowner is permitted to deduct depends on several factors. In most cases, the limit is $3200 per year for all products combined, so the wise often spread out their home improvement projects over several years. For example, they may improve their home’s energy efficiency by installing new insulation and purchasing better-quality windows before purchasing a new A/C system. Each upgrade has its maximum limits, and strategic planning can maximize tax benefits.

Tankless Water Heater Guidelines And Suggestions

For a tankless heater to qualify, it must meet precise standards for Energy Star heaters with an energy rating of more than 0.95 UEFs. A subscription to the EnergyStar newsletter provides tips on saving energy and money and has a product finder feature to help homeowners identify eligible tankless heaters. Homeowners can use the internet to identify products within minutes by their model, brand, energy-efficiency ratings, and more.

Primary Residence

In order to take advantage of the tax credit, the home where it will be installed must be a homeowner’s primary residence. This means that new construction and rental properties are not included. Different types of homes, such as mobile homes, houseboats, coops, and condos, are eligible for the rebates.

Professional Assistance

Consider consulting a tax expert to ensure adherence to the governmental restrictions. These tax rebates are an excellent opportunity for energy-conscious people to upgrade their hot water heaters and save money, so carefully follow the guidelines.

How To File

When you file your tax return, you can claim your rebate. You must keep your purchase receipt and any information provided by the manufacturer to support your purchase and benefit from the tax claim.

Looking To Take Advantage Of The Current Tax Rebates And Install A Tankless Water Heater?

We offer tankless water heater installation, maintenance, and repair and highly recommend them to our environmentally-conscious homeowners seeking tax relief opportunities. Tankless heaters significantly increase energy efficiency as they decrease your utility bill costs. 

Call us to discuss your hot water needs, and we will be happy to come out and install an EnergyStar-rated tankless hot water heater in your home so you can enjoy the tax rebates in 2024!