Government Grants for Free HVAC System Replacement

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The federal government does not provide grants to individuals. Still, the money does flow to state agencies and other entities that help families with their heating, ventilation, and air conditioning (HVAC) needs.

Three federal programs could result in the free replacement of furnaces, water heaters, and air conditioning units – if you know where to look and include the total cost of ownership in the equation.

  • The Department of Energy oversees the Weatherization Assistance Program (WAP), which improves homes’ efficiency, lowering electric and gas costs.
  • The US Department of Health and Human Services administers the Low Income Home Energy Assistance Program (LIHEAP) that helps families pay utility bills.
  • The Environmental Protection Agency runs the Energy Star (ES) program that offers rebates to purchase efficient HVAC equipment.

Free Furnace Programs

Most people will not qualify for a free furnace replacement if you focus on the purchase and installation charges alone because the criteria are strict due to limited resources. However, by extending your horizon to include the lifetime ownership costs, many more households could experience few – if any – out-of-pocket costs.

The people who stand to lower electric or gas cost the most fit these descriptions.

  • Live in cold-weather regions
  • Replacing antiquated oil heating systems
  • Upgrading from older energy-inefficient equipment
  • Switching from expensive electric to a cheaper gas
Table Of Contents

Payment Plans

Payment plans make the numbers work for families by matching the gas or electricity savings to the furnace investment. In theory, the amount you save in reduced heating costs could be more than the monthly payment (including interest charges and origination fees) – making the net expense below zero during every period.

The concept works as follows.

  • Borrow money to pay the upfront furnace costs (purchase & installation)
  • Begin saving money each month on reduced heating costs (gas or oil bills)
  • Repay the lender in monthly installments that could be smaller than energy savings

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Government Grants

Follow the money to see how the three federal government departments filter grant money to families to assist them with furnace replacement and operating expenses – perhaps zeroing out the lifetime ownership costs.

Low-Income Families

Free furnace programs for low-income families provide a great example of how the three government assistance programs might combine to offer this benefit – if you focus on lifetime ownership costs.

  1. WAP targets estimated energy savings help to low income families
    1. Certain Welfare recipients
      1. Supplemental Security Income (SSI)
      2. Aid to Families with Dependent Children
    2. Income falls below 200% of Federal Poverty Guidelines (FPG)
    3. State-determined preferences
      1. Senior citizens over the age of 60
      2. Households with disabled family members
      3. Single parents with children
  2. LIHEAP includes low-income criteria for direct, measurable support
    1. No more than 150% of FPG
    2. No less than 110% of FPG
    3. No more than 60% of state median income
  3. ES does not include earnings qualifications for rebates

Free Hot Water Heaters

The process for using government grants to fund free water heater provides a model to follow for all HVAC replacement systems. A small percentage of low-income families might get a new unit gratis, while rebates and lower utility costs balance the equation for more people.

Once again, payment plans spread over the life of your water heater make the arrangement work. Even middle-class families can upgrade their systems without any out-of-pocket costs – courtesy of gas or electricity savings and rebates.

DOE Rules

The Department of Energy (DOE) provides precise rules for when a state agency or contractor can install a new water heater at no charge to the consumer. Similar guidelines probably exist for the other HVAC systems covered in this article, which you can use as an assistance road map.

The DOE water heater replacement guidelines under the WAP program consider these factors.

  1. Projected Energy Savings
    1. Consumption levels based on the number of users
      1. Showers and baths
      2. Laundry washing machines
      3. Dishwashers
    2. Regional climate and fuel prices
    3. Losses from placement in unheated spaces
    4. Older units with low-efficiency ratings
  2. Health and Safety Hazard Issues
    1. Irreparable water leaks
    2. Missing parts no longer available
    3. Un-flushable corrosion and sediment

Keep in mind that low-income families that meet these rules can make money on the deal. Not only does the government pay for a new water heater, but they also get direct help with the remaining utility costs via LIHEAP.


Searching for free water heaters at classified advertising websites such as Craigslist or Facebook marketplace entails a reverse of the logic used with government grant programs. Yes, many people are thrilled to get rid of an old system cluttering up their basement or garage and will price it at $0 to entice you to haul it away.

Provided that the zero-cost water heater doesn’t leak or need repair, you could score a reliable new system without reaching into your pocket. However, older units use more gas or electricity, which could cost more money over time – especially for large families with extra bathing and washing needs.

Free Air Conditioners

Government grants that translate into free air conditioners follow a similar thought process as other HVAC replacement systems. You start with any investment for the updated unit and then subtract rebates, energy savings, and electricity bill subsidies.

Once again, financing programs provide the magic to even out the cash flow for a new air conditioner. People living in hotter regions or areas with high electricity costs fare best – unless you have a disability or valid medical reason.  


People with disabilities who receive other government benefits can often qualify for a free air conditioning unit with usage baked into the equation. SSDI and SSI recipients frequently meet the eligibility rules for all three grant programs. The inclusion increases the odds that the math solves to a number below zero.

  1. WAP energy savings target SSI recipients and households with disabled family members
  2. LIHEAP help with electric bills focuses on low-income families, and SSDI benefits fall below federal poverty guidelines
  3. ES rebates apply equally to abled and disabled purchasers of high-efficiency equipment updates

Medical Reasons

People with asthma, allergies, and other respiratory illnesses can try medical reasons to score a free air conditioner from their health insurance. Of course, your doctor would have to prescribe A/C for your plan to classify the unit as durable medical equipment and approve a claim.

However, do not hold your breath. Medicare publishes a list of durable medical equipment that it covers to assist with breathing, and air conditioning is conspicuously absent.

  • Continuous Positive Airway Pressure (CPAP) devices
  • Nebulizers & nebulizer medications
  • Oxygen equipment & accessories


Senior citizens over the age of sixty-five could have three or more ways to obtain a free air conditioner. The elderly are especially vulnerable to excessive heat, so finding low-cost ways to keep cool is critical when you live on a fixed income.

  1. The government encourages Medicare Advantage plans to embrace non-traditional benefits that enhance healthy living for seniors, such as pest control, and you guessed it: air conditioning!
  2. The New York City Get Cool initiative provides free air conditioners to low-income seniors who pre-qualify based on their enrollment in City benefits programs.
  3. Seniors living on retirement savings frequently meet the three government programs’ income and resource criteria: WAP, LIHEAP, and Energy Star.