Electrification Rebates: A New Way to Save Money and Reduce Your Carbon Footprint
If you’ve been thinking about changing out your old furnace for a more energy-efficient electric model, you may have access to some great incentives soon. The Inflation Reduction Act includes initiatives to promote clean energy solutions in the home through rebates and tax credits, some of which are substantial. The IRA Electrification Rebates Program is included in this act to help low- and moderate-income households save money on their energy bills and reduce their carbon footprint. It provides rebates to households that install qualified energy-efficient appliances and equipment.
Program Highlights:
Covers 100 percent of electrification project costs (up to $14,000) for low-income households (who earn less than 80 percent of their Area Median Income) and 50 percent of costs for moderate-income households (who earn between 80 and 150 percent of their Area Median Income).
Covers installation and labor costs as well as purchase costs.
Extends up-front discounts to multifamily buildings in which 50 percent of residents are low- and moderate- income.
Incentivizes contractors to perform electrification projects in LMI communities with contractor rebates up to $500 per project.
The IRA Electrification Rebates are administered by the U.S. Department of Energy (DOE). The DOE has not yet released all of the details about the program, but it is expected to begin accepting applications in late 2023.
Examples of the types of appliances and equipment that are eligible for rebates under the program:
Qualified upgrade Maximum rebate
Insulation, air sealing and ventilation $1,600
Breaker box $4,000
Electric wiring $2,500
Energy Star electric heat pump clothes dryer $840
Energy Star electric heat pump $8,000
Energy Star electric heat pump water heater $1,750
Energy Star electric stove, cooktop, range or oven $840
In addition to the financial benefits, there are also environmental benefits to electrifying your home. Electric appliances and equipment are more efficient than their gas-powered counterparts, which means that they use less energy and produce fewer emissions. This can help to reduce air pollution and greenhouse gas emissions, which can have a positive impact on the environment.
The Inflation Reduction Act also includes GREEN incentives for all households. Some of these include:
A tax credit to cover 30% of the costs of installing rooftop solar.
Claim up to $1,200 in tax credit each year for adding insulation or installing efficient windows and doors, with a special credit of as much as $2,000 for electric heat pumps that provide super-efficient heating and cooling.
Claim a tax credit for 30% of the costs of buying and installing a heat pump, up to $2,000 including support for any electric system upgrades needed to make the home heat-pump-ready.
For new electric vehicles, qualified households can receive a tax credit of up to $7,500.
If you are considering making energy-efficient upgrades to your home, these program’s can help you to make the switch with less cost to you. If you live in Fort Collins city limits, you can take advantage of the City’s Epic program. Receive a home energy assessment with recommendations on energy efficient upgrades and guidance with local rebates.
If you’re thinking of purchasing or selling residential property in northern Colorado, give me a call. I would love to assist you.
Kelly Renz, Associate Broker
970.820.0750 | Kelly@GreyRockRealty.com
