President Biden’s Inflation Reduction Act is offering up to $14,000 in rebates and tax credits for people to make their homes more energy-efficient.
There are two programs specified in the Act which have not been implemented yet.
- The HOMES Rebate Program: This provides more than $4 billion to states to help residents make their entire home more energy-efficient. The program will provide rebates based on the energy savings their upgraded home will achieve. This could be anywhere from $2,000 to $8,000 depending on your income classification.
- High-Efficiency Electric Home Rebate Act (HEEHRA): This provides rebates for low- and middle-income families to electrify their homes, such as by installing heat pumps or electric appliances.
The per household rebate is capped at $14,000 total between the two programs meaning if you use one of the rebate programs and you receive $14,000 total you cannot participate in the other program.
The HOMES rebate period lasts until September 30, 2031.
The HEEHRA program designates rebates for specific appliance purchases and other upgrades and up to $8,000 for energy-efficient heat pumps which rely on electricity over gas or heating oil and can reduce electricity use by 50% according to the U.S. Department of Energy.
Here are the caps on rebates for other upgrades made via the HEEHRA program:
- $1,750 for a heat pump water heater
- $8,000 for a heat pump for space heating and cooling
- $840 for electric stoves, cooktops, ranges, ovens and electric heat pump clothes dryers
- $4,000 for an electric load service center upgrade
- $1,600 for insulation, air sealing and ventilation
- $2,500 for electric wiring
To qualify for HEEHRA, households must make 150% or less of the area median income as determined by the U.S. Department of Housing and Urban Development.
The HEEHRA rebates are slated to be available at the point-of-sale.
The Inflation Reduction Act also expands a homeowner efficiency tax credit, called the Energy Efficient Home Improvement Credit. This covers up to 30% of the cost of energy upgrades, with a cap of $1,200 per year.
This is an annual incentive, whereas previous programs offered a one-time deal per household or consumer.
None of these programs are live yet because the funding mechanisms are not yet in place. They will most likely be implemented in the first quarter of next year.