Home Systems & Energy Guides

Lifespans and the replace signal

ENERGY STAR's replacement guidance puts the threshold at 10 years for a heat pump or air conditioner and 15 years for a furnace or boiler — past that age, it's worth getting a contractor's opinion even if the unit is still running. Certified ENERGY STAR equipment can cut heating and cooling costs by up to 20% versus what it replaces, which is part of why the math often favors replacing an aging-but-functional unit rather than repairing it indefinitely.

Water heaters follow the same logic with a faster payback in one specific case: ENERGY STAR estimates that a certified heat pump water heater saves a household of four about $600 a year against a standard electric unit, enough to recover its higher upfront cost in roughly three years — a repair-vs-replace decision that pays for itself faster than most system upgrades on this page.

The 2023 efficiency floor: SEER2

Since January 1, 2023, the Department of Energy has required new residential central air conditioners and heat pumps to clear regional minimum efficiency standards under the SEER2 test metric: 13.4 SEER2 in the northern climate region, and 14.3 SEER2 in the southeast and southwest regions for smaller systems. That's a floor on what any new system sold today can be, regardless of what you're replacing — a useful number to know before a contractor quotes you a unit rated below it.

What federal credits still apply in 2026

The two credits that used to cushion these upgrades both ended for 2026: the Energy Efficient Home Improvement Credit (§25C) — which covered heat pumps, insulation, and windows — and the Residential Clean Energy Credit (§25D), the 30% solar credit, are both unavailable for property placed in service after December 31, 2025. The EV charger credit under §30C runs slightly longer, ending for property placed in service after June 30, 2026, per the IRS's own guidance on the One Big Beautiful Bill's changes — a closing window rather than a closed one, for now.

With that cushion gone for most upgrades, the ENERGY STAR age thresholds and the SEER2 efficiency floor carry more weight in the repair-or-replace call than they used to — there's no tax credit left to tip a marginal decision toward replacing early. Price your own system with the HVAC installation calculator, furnace and AC replacement calculator, water heater replacement calculator, or check what's left of the solar credit with the federal solar tax credit calculator below.