What is the Inflation Reduction Act (IRA) and how can it benefit me and my family?
The IRA was passed in 2022 and is the largest investment in clean energy and climate action in American history, providing tax credits and rebates for goods and services that reduce emissions, including home electrification, energy efficiency upgrades, and new clean energy systems.
At our recent customer appreciation event in August, we gave a brief presentation on the IRA and handed out some printed materials. In case you missed it, or if you’d like to learn more, keep reading! And please check out the printed materials attached to the end of this post.
30% Solar Investment Tax Credit Extended 10 years!
One of the most important things the IRA did was increase and extend the solar Investment Tax Credit from 26% to 30% until December 31, 2032. Under the new name ‘Clean Energy Tax Credit‘, this 30% uncapped federal tax credit allows homeowners and businesses to deduct 30% of the cost of renewable energy systems from their federal taxes, including solar, battery storage, wind, and geothermal. Electrical panel upgrades also qualify (capped at $600), if done in conjunction with a renewable energy system installation.
Electric Vehicle (EV) and EV Charger Incentives
There are some new and exciting changes coming to the Electric Vehicle (EV) Tax Credit! Starting in 2024, the tax credit can be transferred to the dealership and function as a point-of-sale rebate. This means that instead of waiting to get the money back through tax returns, the discount would come straight off the cost of the vehicle, which will greatly improve the affordability and accessibility of switching to an EV. There are some price and income limits, but you could receive a $7,500 credit for a new EV and up to $4,000 for a used EV. To see which vehicles qualify for the credit, check www.fueleconomy.gov. Additionally, there is a new tax credit of up to $1,000 for EV chargers, and Baseline can install one of these at your home or business!
Energy Efficiency Upgrades
The new Energy Efficient Home Improvement Tax Credit gives back up to 30% of the cost of qualifying home efficiency and electrification upgrades, including heat pumps, efficient appliances, and weatherization. If you want to do a whole home energy audit first to see which improvements would be most beneficial to you, please contact our local partner Energy Check! There is a federal tax credit of up to $150 for energy audits, and Baseline customers get an additional discount of up to 50% from Energy Check.
HEEHRA & HOMES Programs – Coming Soon!
Along with the tax credits mentioned above, there are two rebate programs to electrify homes and increase energy efficiency—the High-Efficiency Electric Home Rebate Act (HEEHRA) and the Home Owner Managing Energy Savings Program (HOMES).
HEEHRA helps low-to-moderate income (LMI) households electrify their homes through upfront discounts on qualifying purchases such as heat pumps, electric appliances, weatherization, and electrical wiring updates. Equipment and installation are covered at 100% for low-income households and 50% for moderate-income, with a $14,000 maximum rebate per household. This rebate program will be a game changer for people who want to make these home improvements but can’t afford the upfront investment.
HOMES provides rebates for these upgrades based on modeled or measured energy savings. There are no income limits, but the rebates are doubled for LMI households. If the home project will reduce the energy use by 20-35%, non-LMI homeowners can receive up to $4,000 or 50% of the project’s cost and LMI homeowners can receive up to $8,000 or 80%.
Please note that these two rebate programs are currently being determined on a state-level basis, and should be finalized here in Virginia by 2024. We will update this blog post when that happens, but feel free to check www.energy.virginia.gov in the meantime!
Can Baseline help with any of these things?
Indeed! Solar and battery installations are our bread and butter, but we also install EV chargers, and we upgrade electrical panels, too!
We’re so happy to help spread the word about these new tax credits and rebates. There’s a whole lotta funding available through the IRA, and because of this, there’s never been a better time to make these improvements and upgrades to your home. Doing these projects now is not only good for your wallet, it is also an investment in your community, and in the environment as a whole.
For more detailed information, please make sure to check out the IRA Savings Calculator and home electrification guide that our friends at Rewiring America created. We’ve also attached a few of our own resources below, including a Homeowner’s Guide to the IRA, and a table that helps you see in one place all of the savings discussed in this article. Please free to download and distribute these forms!
Ready to hear what solar could do for your home and electrical bill? Please give us a call at 540-552-1511, or fill out the contact form below, to speak with someone today!