What Seer Rating Is Required For 2023 Tax Credit?

The 2023 tax credit provides an incentive for homeowners to upgrade inefficient home HVAC systems to higher efficiency models. To qualify for the tax credit, new air conditioners and heat pumps must meet certain minimum SEER (Seasonal Energy Efficiency Ratio) requirements. The tax credit covers 30% of the cost of qualified Energy Star Certified HVAC equipment, up to $2,000. Knowing the SEER rating required to qualify for the 2023 tax credit is important for homeowners considering an HVAC upgrade.

What is a SEER Rating?

SEER stands for Seasonal Energy Efficiency Ratio, and it measures how efficiently an air conditioner, heat pump, or furnace can cool a home. The higher the SEER rating, the more energy efficient the HVAC system is.

SEER ratings are calculated by dividing the total cooling output of an HVAC system over a typical cooling season by the total electric energy it consumes during that time. This ratio gives a good indicator of the overall efficiency of the system. A higher SEER rating translates to lower operating costs over time, as you get more cooling for less energy.

SEER is typically represented as a number – for example, a SEER 21 air conditioner is 21% more efficient than SEER 10, the previous minimum standard. The higher the SEER rating, the more efficient the unit is. SEER ratings generally range from 13 to 25 for residential HVAC systems.

The SEER rating is an important factor to consider when replacing or installing new cooling equipment. A higher SEER can translate to hundreds of dollars in lifetime savings compared to lower SEER units. Understanding SEER ratings is key for homeowners looking to maximize energy efficiency and cost savings.

SEER Rating Requirements for 2023 Tax Credit

The minimum SEER rating that is needed to qualify for the 2023 tax credit for central air conditioner or heat pump installations is 14 SEER. This means that any new central AC unit or heat pump installed in 2023 must have a certified SEER rating of 14 or higher in order to be eligible for the tax credit.

The tax credit covers installations of high-efficiency central air conditioners, air source heat pumps, and geothermal heat pumps. The credit can be claimed on 2023 tax returns for qualifying units installed between January 1, 2023 and December 31, 2023.

While 14 SEER is the minimum for the tax credit, it’s recommended to install units with even higher ratings, such as 15-18+ SEER, in order to maximize energy savings and long-term cost benefits. The higher the SEER rating, the more energy efficient the unit. But 14 SEER is the basic eligibility requirement to qualify for claiming the 2023 tax credit.

Regional SEER Rating Requirements

While the national minimum SEER rating requirement to qualify for the 2023 tax credit is 14 SEER, some states and utility companies have set higher minimums for their jurisdictions. This is an effort to promote increased energy efficiency in cooling systems above the national standard.

For example, in hotter southern climates like Florida and Texas, the minimum SEER rating to qualify for state rebates on new air conditioner installations might be 16 SEER or higher. Cooling-dominated states aim to incentivize higher efficiency systems to reduce energy consumption from air conditioning during prolonged hot seasons.

In other moderate and cold climate states, the incentives and programs align with the federal 14 SEER minimum. For instance, states like Illinois, Pennsylvania and Massachusetts follow the national 14 SEER rating for their tax credits and rebates.

Homeowners looking to take advantage of federal and any additional state/local incentives for energy efficient AC systems should research the requirements for their area. Some utility providers also offer rebates for installing new systems above 14 SEER, so check with your electric company too.

SEER Ratings Explained

The Seasonal Energy Efficiency Ratio (SEER) is the standard measurement for a cooling system’s energy efficiency. The SEER rating scale goes from 13 to 23 (higher is better) and measures how efficiently an air conditioner cools your home in relation to the amount of energy it uses.

SEER ratings are calculated by dividing the total cooling output (in BTUs) delivered by an air conditioner or heat pump during its normal annual usage by the total electric energy input (in watt-hours) during the same period.

The higher the SEER rating, the more energy efficient the unit is. For example, a SEER 13 air conditioner will provide 13 BTUs of cooling per each watt-hour of electricity used. A higher SEER 21 unit will provide 21 BTUs of cooling for each watt-hour used. This means the SEER 21 unit uses less electricity to provide the same level of cooling compared to lower SEER units.

SEER ratings allow consumers to easily compare energy efficiency between different HVAC systems. The minimum federal standard for new air conditioning units is 14 SEER, but higher SEER ratings of 16-21 provide even greater efficiency and long-term energy savings.

Benefits of High SEER Ratings

air conditioner with high energy efficiency rating

Choosing an air conditioner or heat pump with a higher SEER rating provides several key benefits:

Energy Efficiency

Higher SEER ratings indicate greater energy efficiency. This means an AC unit with a high SEER rating will use less electricity to provide the same amount of cooling as a lower SEER model. For example, upgrading from an older SEER 10 system to a new SEER 15 system can reduce cooling costs by over 30%.

Cost Savings

The increased efficiency of higher SEER systems translates directly into lower utility bills during the cooling season. While the upfront cost of a high SEER AC may be greater, energy savings can quickly make up the difference and lead to significant long-term cost savings.

Environmental Impact

More efficient air conditioners reduce overall electricity consumption from the power grid. This helps limit CO2 and other greenhouse gas emissions associated with electricity generation. So choosing a higher efficiency system reduces your environmental footprint.

SEER vs EER Ratings

SEER (Seasonal Energy Efficiency Ratio) and EER (Energy Efficiency Ratio) are both measures of air conditioner efficiency, but they represent efficiency under different conditions.

SEER measures how efficiently an air conditioner operates over an entire cooling season, taking into account variations in temperature and humidity. It represents the total cooling output divided by the total electric energy input over a typical cooling season.

EER measures efficiency at a fixed set of conditions, 95°F outdoor temperature and 80°F indoor temperature with 50% relative humidity. EER only reflects performance at peak design conditions, not across a range of conditions.

SEER ratings are always lower than EER ratings for the same unit. A higher SEER rating indicates greater overall efficiency and lower electricity costs over the cooling season.

While EER is useful for comparing units tested under the same conditions, SEER gives a more realistic measure of efficiency for a typical climate. SEER ratings are used for federal appliance standards and efficiency tax credits in the United States.

When purchasing an air conditioner, consumers should compare SEER ratings to determine the most efficient system for their climate and usage. SEER provides a more comprehensive measure of real-world efficiency over time.

SEER Rating Cost Considerations

When considering a new HVAC system, one of the most important factors is the upfront cost versus the long-term savings from energy efficiency. Systems with higher SEER ratings often come with a higher initial price tag, but save money over time through lower energy bills.

For example, upgrading from a 14 SEER system to an 18 SEER system for a typical 2,500 square foot home can increase the upfront cost by $2,000-$4,000. However, that 18 SEER system can save a household approximately $150-$300 per year on cooling costs, paying for itself in under 15 years.

There are additional long-term cost savings from higher SEER systems as well. With increased efficiency, the HVAC system will require less electricity to cool the home. This puts less strain on the components, helping prevent costly repairs and extending the system’s lifespan. The higher initial investment pays dividends for years through lower bills and reduced maintenance.

When choosing a new HVAC system, carefully weigh the upfront costs against the long-term savings. Focus on total lifetime costs rather than just initial price. While high-efficiency systems have a steeper upfront cost, they pay for themselves over time and are a smart investment for cooling comfort and energy savings.

SEER Rating Verification

When purchasing a new HVAC system, it’s important to verify the SEER rating to ensure you are getting the efficiency you expect. Here are some tips for confirming a system’s SEER rating:

Look at the AHRI Certificate: Any HVAC equipment installed in North America is required to have an AHRI certificate, which lists tested performance data including the confirmed SEER rating. Ask your contractor to provide the certificate for the exact model being installed.

Check the EnergyGuide Label: This yellow label provided on all new HVAC equipment lists the SEER rating and is required by the Federal Trade Commission. Compare the SEER rating listed here against what is claimed by the manufacturer or contractor.

Review the Manufacturer Specs: Check the manufacturer’s official literature and specifications for the equipment model number you are having installed. Make sure it aligns with the rating being advertised.

Ask for Additional Documentation: Request additional supporting documentation from the contractor such as certificate of installation for the equipment. Reputable contractors will provide proof that what they are installing matches the efficiency ratings claimed.

Following these simple verification steps can help ensure you are getting the rated SEER efficiency promised by the new HVAC system. Confirming the proper SEER rating means maximizing energy savings.


After January 1, 2023, the minimum required SEER rating for HVAC systems to qualify for the energy efficiency tax credit is 18 SEER for split heat pumps and 16 SEER for packaged heat pumps. Upgrading to an Energy Star certified system with a higher SEER rating of at least 19 can maximize your potential tax credit savings.

In most regions, choosing a system with a SEER rating between 18-21 provides the ideal balance of energy efficiency and cost savings on your energy bills. Systems with SEER ratings above 23 tend to have diminishing returns on investment. Be sure to verify the SEER rating on any new system you purchase by looking for the yellow EnergyGuide label.

To receive the maximum tax credit in 2023 and beyond, select a high-efficiency, Variable Speed mini-split heat pump or central air conditioner that exceeds the new SEER requirements. Combined with proper installation and maintenance, this will minimize energy usage and provide comfortable heating and cooling for years to come.

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