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Why Upgrade? What is Bioheat® Fuel? Additional $600 Tax Credit

On August 16, 2022, President Biden signed the Inflation Reduction Act (IRA) into law. The IRA includes $391 billion worth of energy and climate-related provisions, most of which are designed to incentivize nearly all sectors of the U.S. economy to transition to “cleaner” fuels and technologies and higher levels of energy efficiency. This includes tax incentives and rebate programs to encourage home energy retrofits and the installation of more efficient heating and cooling systems and all-electric appliances.

  • President Joseph R. Biden signed the landmark Inflation Reduction Act into law on August 16, 2022. The law authorizes $391 billion in spending on energy and climate change, including roughly $35 billion in clean energy investments managed through the U.S. Department of Energy (DOE). The Inflation Reduction Act represents the single largest investment in tackling the climate crisis and investing in clean energy in U.S. history.
  • Click here for the Home Energy Rebate Programs Frequently Asked Questions Fact Sheet

  • Oil-fired furnaces or hot water boilers are eligible for up to $600 under this credit. To qualify, the system must be placed into service between January 1, 2023, and December 31, 2026 and meet 2021 ENERGY STAR® criteria. Between January 1, 2027 and December 31, 2031, equipment must have a 90 AFUE.
  • Oil-Fired Heating Equipment must also be rated by the manufacturer for use with renewable fuel blends of 20% or more. Beginning January 1, 2027, oil-fired boilers and furnaces must be rated for blends of 50% or more to qualify.
  • Click here for qualifying ENERGY STAR® Oil-fired boilers
  • Click here for qualifying ENERGY STAR® Oil-fired furnaces

  • Homeowners may claim their tax credit via his or her tax return.
  • Taxpayers will use IRS Form 5695 to apply.
  • Click here for info on Residential Energy Credit forms
  • Click here for IRS Form 5695 instructions
  • As with all tax matters, we strongly encourage you to consult with an accountant, or other qualified tax professional.
Property or Improvement Max. Amount Minimum Efficiency & Other Requirements
Oil furnace or hot water boiler Up to $600 2023-2026: 2021 EnergyStar® and certified B20 compatible
2027-2031: 90 AFUE and certified B50 compatible
Gas water heater Up to $600 CEE highest efficiency tier (not including advanced tier) for year placed into service
Gas furnace or hot water boiler Up to $600 CEE highest efficiency tier (not including advanced tier) for year placed into service
Electric or Natural Gas Heat Pump Up to $2,000 CEE highest efficiency tier (not including advanced tier) for year placed into service
Biomass (wood) stove Up to $2,000 Thermal efficiency rating of at least 75 percent
Central air conditioner Up to $600 CEE highest efficiency tier (not including advanced tier) for year placed into service
Electric panel upgrade Up to $600 Must be needed for other efficiency improvements and be upgraded to at least 200 amps
Window or skylight Up to $600 EnergyStar® Most Efficient
Exterior door Up to $250 (or $500 for multiple) Applicable EnergyStar® requirements
Insulation material or system (includes air sealing) Up to $1,200 Must meet prescriptive criteria from most recent International Energy Conservation Code

What Other Tax Credits and Rebates apply under the Inflation Reduction Act (IRA)?

  • Qualified energy efficiency improvements for the following building envelope components installed on or in your main home that you owned during 2022.
    • Any insulation material or system that is specifically and primarily designed to reduce heat loss or gain of a home when installed in or on such a home.
    • Exterior windows and skylights.
    • Exterior doors.
    • Any metal roof with appropriate pigmented coatings or asphalt roof with appropriate cooling granules that are specifically and primarily designed to reduce the heat gain of your home.
  • You may be able to take a credit of 30% of your costs of qualified solar electric property, solar water heating property, small wind energy property, geothermal heat pump property, biomass fuel property, and fuel cell property.
  • Click here for Frequently asked questions and fact sheet about energy efficient home improvements and residential clean energy property credits.
  • Click here for the Home Energy Rebate Programs Frequently Asked Questions
  • Click here to view the ENERGY STAR® Product Finder

Upgrade & Save is offered through the North Carolina Petroleum & Convenience Marketers. NCPCM understands that your new heating equipment is an investment in your future, and we want to make it possible for every local homeowner to enjoy the long-term savings that come with new, higher-efficiency heating equipment, and the peace of mind from a new, reliable aboveground oil storage tank. Research has shown that property owners with new, high-efficiency heating equipment are more satisfied with their comfort level and fuel choice. And comfort and satisfaction are what turns a house into a home.

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ENERGY STAR and the ENERGY STAR mark are registered trademarks owned by the U.S. Environmental Protection Agency. Bioheat® fuel is a registered trademark of the Clean Fuels Alliance America. NORA is a registered trademark of the National Oilheat Research Alliance.