November 14, 2024

[Video] 2025 Home Energy Efficiency Standards: What You Should Know

With new energy efficiency standards set to roll out in 2025, homeowners will see updated heating and cooling ratings in new systems. These changes are part of an ongoing effort to reduce environmental impact, lower energy bills, and improve home energy efficiency across the United States. If you’re a Denver homeowner, this is the time to get informed, especially if you’re considering upgrading your heating or cooling system.

As your local, family-owned company specializing in plumbing, electrical, and HVAC services, we’re here to help you navigate these changes and understand how the 2025 energy standards will affect your home. The video below introduces what’s changing. The rest of this article explains what it means for you and why now might be the best time to upgrade your boiler or HVAC system. 

What are the 2025 Energy Efficiency Standards?

The 2025 standards, implemented by the U.S. Department of Energy, will focus on raising energy efficiency ratings across various household appliances and systems, including HVAC, water heaters, and insulation materials. The goal is to reduce energy consumption and greenhouse gas emissions, aligning with nationwide sustainability efforts. These standards set new benchmarks for the Seasonal Energy Efficiency Ratio (SEER) and Heating Seasonal Performance Factor (HSPF) in HVAC systems.

Under the new regulations, all newly installed systems must meet stricter efficiency ratings. This means better performance and less energy usage for homeowners. 

How Will These Standards Affect Homeowners?

For homeowners, the 2025 energy efficiency standards bring several changes and, in many cases, upgrades:

1. Increased Savings: With higher efficiency requirements, your HVAC and other energy-consuming systems will use less energy, resulting in lower monthly utility bills.
2. Improved Comfort: High-efficiency systems typically provide better heating and cooling performance, meaning more consistent indoor temperatures and fewer hot or cold spots.
3. Better Resale Value: Homes equipped with energy-efficient systems will likely attract more buyers, as they offer long-term savings and align with modern energy-conscious living trends.
4. Mandatory Compliance: If you replace a heating or cooling system after 2025, it must meet these new standards. This may come at a higher initial cost but will lead to savings over time.

Understanding the 2025 Efficiency Ratings 

The 2025 standards introduce updated ratings for HVAC systems. The key changes are:

• SEER2: The Seasonal Energy Efficiency Ratio (SEER) rating, which measures cooling efficiency, is evolving into SEER2 with higher efficiency requirements. Cooling systems must score at least a SEER2 rating of 15 in most regions.
• HSPF2: For heating, the Heating Seasonal Performance Factor (HSPF) is also being revised as HSPF2. New systems must meet a minimum HSPF2 rating, which will vary by region but is expected to be approximately 8.8 in colder climates like Denver.

These updates will help you identify high-performing systems and make more informed decisions about your HVAC upgrades.

Why You May Want to Upgrade Your HVAC System Before 2025 

If you’re considering a new heating or cooling system, upgrading before the new standards go into effect could save money, time, and hassle. Here’s why:

1. Lower Costs on Current Models: Once the 2025 standards kick in, manufacturers will need to produce equipment that meets the stricter guidelines, likely at a higher cost. By upgrading now, you can avoid these price increases and secure a high-efficiency system that meets today’s standards.
2. Availability: As the demand for systems that meet the new standards arises, availability may become limited, especially in regions like Denver, where efficient heating is crucial.
3. Immediate Energy Savings: You don’t have to wait for 2025 to start saving on energy bills. Upgrading your HVAC system now can result in immediate improvements in efficiency, comfort, and cost savings.

Why Are Home Energy Costs Expected to Rise?

Upgrading HVAC systems to meet the 2025 standards requires new technology and parts, which translate into higher manufacturing and installation costs. Additionally, the need for specialized components means that these systems will be more expensive than older, less efficient models. 

However, the trade-off is worth it for the energy savings, reduced maintenance, and improved comfort you’ll experience. By investing now in a new system, you can lock in today’s prices and avoid the inflated costs expected to hit as 2025 approaches. 

Energy Rebate Programs for Homeowners

To support homeowners with the costs of upgrading to energy-efficient HVAC systems, several rebate programs and tax credits are available. Here’s a look at some of the key programs that can make your 2025 upgrade more affordable:

1. Federal Tax Credits: Through the Inflation Reduction Act, homeowners are eligible for a federal home energy efficiency tax credit covering up to 30% of the cost of energy-efficient HVAC systems, with a maximum benefit of $2,000 annually. This credit includes heat pumps, high-efficiency water heaters, and other qualifying systems and is available through 2032.
2. Colorado State Tax Credits: Starting in 2024, Colorado offers state tax credits specifically for Energy Star-certified heat pumps and other HVAC systems. Homeowners installing air-source heat pumps are eligible for a $1,500 tax credit, while ground-source (geothermal) heat pumps can qualify for a $3,000 credit. These credits are expected to remain available through 2026, though they may decrease in value over time.
3. Utility Company Rebates: Many local utility providers, such as Xcel Energy, offer rebate programs to encourage homeowners to switch to high-efficiency systems. Xcel, for example, provides rebates of up to $2,200 for qualifying heat pump installations. Rebates like these can significantly reduce the upfront costs of upgrading and help homeowners meet the new 2025 standards without breaking the bank.
4. Local Government Incentives: In addition to federal and state programs, some city-level incentives support energy-efficient upgrades. The City and County of Denver, for example, may offer grants or special financing options for residents making energy-efficient upgrades. Checking with local government programs can uncover additional savings options.

Taking advantage of these rebates and tax credits can make upgrading your HVAC system more affordable and reduce your monthly utility costs. If you’re interested in learning more about these programs and how to make the most of your 2025 energy upgrade, contact our team for expert guidance and personalized recommendations.

Talk to an HVAC Expert

In a world of big-box service providers, choose family-owned Applewood for your plumbing, electrical, heating, and cooling needs. We’re here to assess your current system, discuss the benefits of a new system, help you weigh the costs, and perform expert service. To learn more about the new heating and cooling standards and speak with an expert, call Applewood today. We help families like yours.