Burnselk, I think the key to your confusion is that the amount of tax you pay after you do your taxes is some fixed number regardless of how much your withholdings are during the year. In other words, there are more than a few ways to come out "even" with the fed after doing your taxes such that you pay nothing and get no refund. 1) During the year, $10000 was witheld from your paychecks and after you do your taxes, it shows you owe $10000 in taxes. Net = 0. You owe nothing and they owe you no refund. 2) During the year, $1000 was witheld and after you do your taxes, it shows you owe $1000 in taxes. Net = 0. You owe nothing and they owe you no refund. In 1) above, the $1500 tax credit would get you a $1500 refund because $1500 is credited against the $10000 in taxes you have to pay resulting in a net of $8500. Since $10000 was witheld, the fed now owes you a $1500 refund. In 2) above, the $1500 tax credit would only get you a $1000 refund because $1500 is credited against the $1000 in taxes you have to pay resulting in a net of -$500. BUT since it is a non-refundable credit, the fed won't let you keep that extra $500 so the taxes you owe are $0 and not a credit of $500. Since $1000 was witheld, the fed now owes you a $1000 refund. Hope this makes sense... an example of a refundable credit is the Earned Income Credit. In that case, in scenario 2 above... you would get to keep the -$500 from the credit and your refund would be $1500. But this is NOT the case with the energy credit. Hope this clears things up a bit...

What concerns me is them quoting very large backup heat furnaces. I'd be surprised if you needed over 100k backup heat. Was a load calc performed? Lennox or Trane either way you would get a good system if installed properly and sized properly. I sure hope Trane would make some changes. 2-stage would be beneficial for humidity control, but not necessary by any means. What coil was quoted for the Lennox setup? If using a Lennox CX34-49C coil, the G60UHV-60C-110 furnace would make the system qualify. If they use an Aspen coil they don't have to oversize the furnace.

Thanks for the quick response, tigerdunes -- I've learned a lot from what you've written in previous posts here in the heating and air forum. One of the sales reps thought our unit was probably builder's grade, as well. That fits with the overall approach that the builder took with our home -- any corner that he could cut, he did cut. If you don't mind, I have a few follow up questions: 1. I understand the basics of what makes the variable speed air handler different from the single speed, but I don't have a good grasp of what the advantages are. I assume that it boosts efficiency, but will that boost translate into enough savings to justify the added cost of $500 or so? 2. Are you a proponent of extended labor warranties on a system like the XR15? For example, I can save $650 if I go with a 2-year warranty over the 10-year. Since we're likely to be in the house for 3-5 years, I'm leaning toward saving the money. 3. I've seen a lot of recommendations for the Trane XL15i. In your mind, would it be worth an extra $500 over the XR15? 4. Finally, the dealer who quoted the Lennox system also sells Trane, but he steered me to Lennox. I wondered if they have a better profit margin on Lennox, but he presented it as more bang for the buck (Trane's more expensive because of advertising, etc.). You clearly prefer Trane, but what are your thoughts on the XP system? Thanks!

Wow, you gentlemen respond very quickly. Thanks for that. And apparently, I'm not at my sharpest in the middle of the night. That power rate was incorrect. I only provided the fuel charge. Adding all the pieces together comes to $0.11579 (.0782 summer rate, .00144 transmission rate, and .03615 fuel charge). As for the other questions/comments: * I did worry about the lineset diameter and confirmed for the length, turns, and elevation change online for the Lennox. It won't even have a 1% drop in efficiency. The Bryant salesman with 17 years experience told me the lineset works. All the contractors told me the lineset works for a 2 ton but not a 3 ton. Additionally, replacing the lineset adds roughly $1,000 to each bid. * Only one of the contractors specified a 3 ton unit and there expected the unit to always run in the low speed except during extreme circumstances. * The Bryant does come with the Evolution controller t-stat. * Demand defrost - I couldn't find any mention of this for the Lennox online, so I will pose the question to the contractor. I did find this text on the Bryan installation instructions -> "The control board accumulates compressor run time. As theaccumulated run time approaches the selected defrost interval time, the control board monitors the coil temperature sensor for a defrost demand. If a defrost demand exists, a defrost cycle will be initiated at the end of the selected time interval. A defrost demand exists when the coil temperature is at or below 32_F (0_C) for 4 minutes during the interval." * I will ask about the staged heat strips. Austin generally only has 24 hours or less below freezing and maybe two months where heating is used. * Tigerdunes - what do you mean when you say the prices are "very frisky"? * We certainly are having more and more hot summers. It struck me that at least a couple of the contractors were eager for the business as they were ready to do the work within a day or two. How over priced do you think these prices are for premium equipment? I am leaning toward the Lennox due to the 10 year warranty for labor and the Internet enabled thermostat that allows me to adjust it from my iPhone when I realize we are out of the house for a while. Additionally, the salesman was more pleasant to my wife and helpful to me without the constant adjustments in what he is selling me. Thanks again for all the advice. It is invaluable in making sure I get my money's worth. Regards, Trevor in Austin