Janet Cook
This may be a good year for some energy efficiency upgrade home remodeling! The Inflation Reduction Act has created energy efficiency rebates for those with moderate or lower income, and tax credits for those above median incomes for all kinds of home upgrades. For those whose income is 80% or less than the area median income (AMI), the rebates will cover 100% of the total cost for material and labor of qualifying projects. Households with income over 80% of the area median income (up to 150% of AMI) can use the rebates to cover 50% of the equipment and installation costs.
Beginning in January of 2023, households bringing in more than 150% of the AMI instead of qualifying for point-of-sale rebates, Energy Efficient Home Improvement Federal Tax Credits can be used. This credit will be worth 30% of the total eligible projects up to $1,200 per year (or $2,000 per year for heat pump water heaters and heat pump space heaters). Currently, projects may be spread out to claim the tax credit in multiple years. Solar panel tax credit has been raised to 30% for the next 10 years, up from 26% previously.
Energy Efficiency Annual Tax Credits:
$150 Home Energy Audit
$250 One Exterior Door
$500 Two or more Exterior Doors
$600 Exterior Windows and Skylights
$600 Central Air Conditioner
$600 Electrical Panels and Related Equipment
$600 Natural Gas, Propane, Oil Water Heaters and Furnaces
$840 Electric Heat Pump Clothes Dryer, Induction Stove or All-Electric Stove
$1,750 Heat Pump Electric Water Heaters
$2,000 Heat Pump Space Heaters
$2,000 Biomass Stoves and Boilers
30% Tax Credit for Solar Panels, Home Wind Turbines, Home Battery Storage System (Pairs with Solar Panels)
There is a new program called HOMES (Home Owner Managing Energy Savings) for states to provide rebates—up to $8,000 for low-to-moderate-income households and $4,000 for everyone else—based on how much total energy savings has been achieved from a retrofit. This can be applied for other energy-saving products that are not specifically listed in the federal program, such as hydronic water radiant in-floor heat system, insulation, air sealing ventilation, and the like. There could be state or local incentives still available for upgrading efficiency in appliances and improving the building envelope (insulation, windows, and exterior doors) as well. It may be best to consult a tax expert to find out all you are eligible for.
Happy Home Remodeling!
Janet Cook, Certified Health Coach and Aging in Place Specialist, President of Cook Remodeling (celebrating their 44th year), invites you to check out their website for photos and more ideas.