Energy Efficiency and Tax Credits: Do Wall Units Qualify?
Intro: Saving Energy = Saving Money
It’s no secret that older air conditioners can chew through electricity. That’s why manufacturers have been racing to improve efficiency — and why homeowners are asking the big question:
“Do through-the-wall air conditioners qualify for energy rebates or tax credits?”
Good question — and the answer is sometimes.
Let’s break down how efficiency ratings work, what to look for in Energy Star units, and how to tell if your system qualifies for those 2025 federal incentives.
1. Understanding Efficiency: EER vs. CEER
Before we get into credits, let’s cover the alphabet soup on the yellow EnergyGuide label.
EER (Energy Efficiency Ratio)
-
Measures how efficiently an AC cools at a fixed temperature.
-
Higher = better.
-
Example: A 10 EER unit provides 10 BTUs of cooling per watt-hour.
CEER (Combined Energy Efficiency Ratio)
-
Includes standby power use — the energy your AC draws even when not running.
-
Reflects real-world efficiency.
-
A CEER above 10.5 is considered excellent.
You’ll see CEER on nearly every new through-the-wall model today, like the LG LT0816CER 8,000 BTU Energy Star, which rates at 10.7 CEER.
Jake’s tip: “If you’re comparing models, always look for CEER — not just EER. It’s the number that matters for your bill.”
2. What Makes a Wall Unit Energy Efficient
A through-the-wall AC becomes “efficient” when it combines good engineering with low power draw. Here’s what makes the biggest difference:
✅ Energy Star certification — Verified by the EPA for above-average efficiency.
✅ High CEER/EER — Typically 10.5 or better.
✅ Variable-speed fans — Adjust cooling output automatically.
✅ Modern refrigerants (R-32) — Transfer heat more efficiently.
✅ Tight sleeve installation — Prevents air leaks around the unit.
Even if your AC doesn’t qualify for tax credits, Energy Star models can reduce cooling costs by 10–20% compared to standard units.
3. Energy Star Ratings: Why They Matter
Energy Star is the easiest way to tell if a wall unit meets efficiency standards.
To qualify, a through-the-wall AC must:
-
Have a CEER ≥ 10.5 (for smaller units) or ≥ 9.8 (for larger ones).
-
Use modern refrigerants like R-32 instead of R-410A.
-
Include low standby power consumption features.
Look for the blue Energy Star® label when shopping. Models like:
-
LG LT1016CER (10,000 BTU) – CEER 10.7
-
Friedrich Uni-Fit UCT10A10A (10,000 BTU) – CEER 10.7
-
GE AJCS10DHW (10,000 BTU) – CEER 10.6
All exceed federal efficiency minimums and can potentially qualify for rebates.
4. Federal Tax Credits (2025 Update)
Here’s the good news:
Some through-the-wall air conditioners do qualify for the federal Energy Efficient Home Improvement Credit — part of the Inflation Reduction Act (IRA).
As of 2025, the credit covers:
-
Up to 30% of the cost of qualifying energy-efficient HVAC equipment.
-
Maximum of $600 per unit for Energy Star-certified air conditioners.
Eligibility Basics
✅ Must be Energy Star–certified.
✅ Installed in your primary residence (not rentals).
✅ Purchased and installed between 2023–2032.
✅ Must meet regional energy-efficiency criteria.
You’ll need to keep the manufacturer’s certification statement (available on most brand websites) for your tax records.
Jake’s advice: “Save that receipt and Energy Star certificate — your accountant will thank you.”
5. State and Utility Rebates
Even if you don’t qualify for a federal credit, your state or local utility may offer rebates for Energy Star equipment.
Here’s what to look for:
-
Instant rebates through local power companies.
-
Mail-in or online rebates after purchase.
-
Energy audits that include partial reimbursement for efficient upgrades.
To find them, visit:
👉 EnergyStar.gov/Rebate-Finder
Type in your ZIP code and “room air conditioner” — it’ll show all available rebates near you.
6. How Much You Could Save
Let’s put the numbers in real terms.
A typical 10,000 BTU wall AC runs about 800 kWh/year.
At $0.15 per kWh, that’s $120 in electricity annually.
An Energy Star unit using 10% less power saves $12–$20 per year, or roughly $150–$200 over its lifespan.
Add a $50–$100 rebate or tax credit, and the payoff is clear.
| Unit Type | CEER | Annual Cost | 10-Year Savings |
|---|---|---|---|
| Standard | 9.5 | $120 | — |
| Energy Star | 10.7 | $102 | $180+ |
Jake’s rule: “An efficient unit might cost $75 more upfront — but it pays for itself in two summers.”
7. How to Claim the Federal Credit
When tax season rolls around, here’s what you’ll need:
-
Form 5695 – Energy Efficient Home Improvement Credit.
-
Proof of purchase – your invoice or receipt.
-
Manufacturer’s certification – available from LG, GE, or Friedrich websites.
Enter the total equipment cost (not including labor) and attach the documentation to your federal tax return.
If you’re unsure, a tax preparer can confirm eligibility. The process is quick — you don’t need to file separately or wait months for approval.
8. Real-World Example: Jake’s 2024 Install
Last summer, I helped a homeowner replace two old 9,000 BTU wall units with Energy Star–rated GE 12,000 BTU AJEQ12DWJ models.
-
Each unit qualified for a $75 state rebate through the utility company.
-
They also claimed a $600 federal tax credit (30% of total cost).
-
Combined, that’s $750 saved, plus about $100/year off their electric bill.
Not bad for upgrading to quieter, more efficient cooling.
9. Common Questions Homeowners Ask
❓ Do all Energy Star units qualify for tax credits?
Not automatically. Only those meeting current federal guidelines and installed in your primary residence are eligible.
❓ Can I claim the credit if I installed it myself?
Yes, as long as the unit is new, Energy Star–certified, and permanently installed. Labor costs aren’t included.
❓ What about wall units with heat?
If the heating function is electric resistance only (not a heat pump), it won’t qualify for heat-related credits — but the cooling portion may still count.
❓ Do commercial or rental properties qualify?
No — this credit is for primary residences only.
10. How to Spot Energy Star Models at The Furnace Outlet
When browsing units, look for:
-
“Energy Star Certified” in the product title.
-
CEER ratings of 10.5 or higher.
-
Efficient refrigerant (R-32).
-
Listings that mention federal or local rebates.
For example:
-
LG LT1016CER — Quiet, efficient, Energy Star certified.
-
Friedrich Uni-Fit UCT10A10A — CEER 10.7, qualifies for rebates.
-
GE AJES10DHW — Energy Star rated, fits standard wall sleeves.
👉 Browse The Furnace Outlet’s Energy-Efficient Wall Units
11. Bonus: Easy Tips to Boost Efficiency
Even the best unit won’t save much if it’s poorly installed or maintained.
Here’s how to maximize every watt:
✅ Seal the wall sleeve tightly with foam insulation.
✅ Clean filters monthly for smooth airflow.
✅ Vacuum coils at the start of each season.
✅ Use curtains or blinds to block direct sunlight.
✅ Run on Energy Saver mode to cycle the fan automatically.
Small tweaks add up — improving efficiency by another 5–10%.
Final Thoughts: Efficiency Pays for Itself
Through-the-wall air conditioners are more efficient than ever — and yes, the best models can qualify for federal tax credits and local rebates.
Look for Energy Star certification, CEER above 10.5, and R-32 refrigerant.
Keep your documentation handy, and you could save hundreds upfront — and hundreds more over time.
Jake’s take: “Buying efficient isn’t just about being green. It’s about keeping more green in your wallet.”
In the next Blog we will learn more about
