If you’re a homeowner looking to invest in renewable energy and efficient appliances, the Inflation Reduction Act (IRA) of 2022 offers some great discounts. According to Rewiring America, a household could save up to $1,800 per year on energy bills by upgrading to a modern electric heat pump, using a heat pump for water heating, adding rooftop solar panels, and converting to an electric vehicle. Using more renewable energy and upgrading home energy efficiency ate the keys to reaping these incentives. We’ll take a closer look at what exactly homeowners can do to take advantage of the IRA below.
Invest in Solar Energy Solutions
For homeowners who have been considering investing in solar energy, there is no better time than now to do so. The Inflation Reduction Act (IRA) of 2022 offers a 30% federal tax credit for solar photovoltaic (PV) systems, with no maximum limit on the credit amount. The credit can be applied to both existing homes and new construction, and it’s available for both purchase and lease of PV systems. There’s also a 10% tax credit for solar water heaters, which is capped at $300.
Consider Upgrading to an Electric Vehicle
For electric vehicles, the IRA provides a $7,500 tax credit that phases out after an automaker sells 200,000 EVs. That means if you’re in the market for a Tesla Model 3 or Chevrolet Bolt EV, you could get up to $7,500 off the sticker price. The IRA also includes a provision that allows homeowners to deduct 100% of the costs of installing EV charging stations from their taxes.
Increase Your Home’s Energy Efficiency
It’s not just about solar energy and electric vehicles—the IRA also rewards homeowners who work to make their homes more energy efficient in general. Energy-efficiency measures in the IRA include a $2,000 tax credit for ENERGY STAR certified homes, a $500 tax credit for advanced main air circulating fans, and a $150 tax credit for natural gas, propane, or oil furnaces or boilers. If your home doesn’t qualify for the ENERGY STAR tax credit, don’t fret! Try some of our suggestions below to make your home more energy efficient:
- Educate yourself about energy efficiency and which improvements will offer the best return on investment
- Install insulation, weatherstripping, and energy-efficient windows to reduce heat loss in your home
- Invest in a new roof, and consider “cool” reflective roofing materials if they’re available in your area
- Use energy-efficient appliances and light bulbs to save money on your utilities
- Be thoughtful about temperature control in your home, and use a programmable thermostat if possible
- Invest in renewable energy sources such as solar panels and batteries for backup power storage
The Inflation Reduction Act of 2022 is estimated to save American households billions of dollars on their energy bills and help spur the transition to a clean energy economy. If you’re thinking of making some home improvements that will save you money in the long run, now is a great time to do it.