The American Recovery and Reinvestment Act tax credit for HVAC products applies to high-efficiency equipment. The equipment should help homeowners save money on utility bills, especially on older systems that have been operating at significantly lower efficiency levels. One option for HVAC equipment that can also help homeowners save money is dual-fuel or hybrid systems. These systems are made up of an electric heat pump used in conjunction with a gas or oil furnace. If homeowners choose one or both parts of the system that meet the stimulus standards, they could qualify for the tax credit. 

HVAC contractor Michael Tucker of Tuckers Air Conditioning & Heating, in Gaithersburg, Md., says that it allows homeowners more options when fuel prices increase. “Hybrids give you options down the road to choose what fuel you want to consume based on which utility costs less,” he says. 

These dual-fuel systems work best in areas where year-round temperatures are 32 degrees Fahrenheit and above -- generally in the southern and western climates of the U.S. The heat pump is stage one and typically provides both heat and air conditioning when outside temperatures are 32 to 38 degrees Fahrenheit and above. The gas or oil furnace is second stage, and is used in temperatures below 32 degrees. 

“The heat pump provides top performance above 35 to 38 degrees," says Larry Stewart of Precision Air Conditioning & Heating, in Memphis, Tenn. "When you drop below that you start losing ground, then going into defrost cycles, your BTU output is less because it's colder outside. When you hit zero degrees outside, you get little out of a straight heat pump.” He says that boilers or furnaces take awhile to heat up or cool down a house, whereas a heat pump provides quick heating or cooling when needed. 

“If gas is really expensive, homeowners can let the heat pump work down to 30 or 20 degrees and then run the gas furnace from there,” Tucker says. 

Both Tucker and Precision COO Kathe Stewart say that hybrids were recommended in the early 1970s and early 1980s when the cost of gas was high and electricity was stable. “It’s coming back because of rising fuel costs,” Tucker says.

Kathe says that these dual-fuel systems can provide significant year-round savings. She cites the example of a client who recently replaced an A/C condenser with a heat pump but kept his gas boiler. With the new configuration, in March 2009, as compared with March 2008, his gas bill decreased by $127 and his electricity bill increased by $34, for a net savings of $93.