The Inflation Reduction Act (IRA) signed into law last month in Washington is a huge step forward in combating climate change and addressing our country’s energy usage. Given the act’s scope, the average homeowner’s benefits may not be so obvious. In this post, we’ll highlight the important stuff for anyone considering improving the efficiency and energy usage of their home.
It’s All About The Tax Credits
The IRA includes $370bn in new federal funding but the biggest impact is likely to come in the form of tax credits. For a homeowner, these credits can be applied to retrofits of the existing home and purchasing new, cleaner appliances. Some examples include :
- Consumers who invest in an energy-efficient heat pump water heater will be eligible for a rebate of up to $1,750. A heat pump water heater works like a refrigerator in reverse. It uses reliable technology to capture heat from the surrounding air and transfers it to the tank to make hot water. An ENERGY STAR certified heat pump water heater uses 70% less electricity to make the same hot water as a standard electric model.
- An upgraded breaker box (to help prepare for an all-electric home) may be eligible for a $4,000 rebate. There’s also a rebate of up to $2,500 for electrical wiring improvements.
- You can get a rebate of up to $840 for an electric stove, cooktop, range or oven. Researchers estimated stoves across the U.S. emit as much climate pollution as about 500,000 gas-powered cars. And as we’ve written about before, a gas-burning stove can seriously impact your indoor air quality.
- Another $840 rebate is available for heat pump dryers. This technology, widely adopted in Europe, uses about half as much electricity to dry clothes as a standard US dryer. Rather than releasing warm, humid air through a dryer vent to the exterior of the home as a conventional dryer does, a heat pump dryer sends it through an evaporator to remove the moisture without losing too much heat.
- Air Sourced Heat Pumps are an increasingly popular way to efficiently heat and cool your home using electricity. Under the IRA, households can qualify for a tax credit of up to $2,000 for the purchase of an electric heat pump. And for households with low incomes, the new law provides a rebate of up to $8,000 on installation.
- And finally, our favorite way to always save money – air sealing and insulation! The IRA provides a $1,600 rebate for weatherization projects including insulation, air sealing, and ventilation.
How much money you can get back will ultimately depend on a number of factors including income, location, whether you own your home, etc. And there are still a number of details that need to be worked out. That said, the below tools are helpful for understanding roughly what rebates you can get for certain improvements :
To find out which discounts, rebates and tax credits your household is eligible for, consult this online calculator.
Timing and availability do vary by state. To find out which programs and incentives have been rolled out in your area, CHECK HERE.
Another place to find rebates is this Energy Start Tool.
EnergyStar provides tons of information on energy efficient appliances here