Millions of homeowners can receive up to $14,000 in rebates and tax credits to make energy-efficient home upgrades under the new Inflation Reduction Act (IRA).
These upgrades range from heat pumps to new electrical appliances such as stoves and dryers.
Lauren Urbanek, deputy director of the clean buildings team at the nonprofit Natural Resources Defense League (NRDC), said these incentives could help the U.S. lower its fossil fuel emissions since 40% of carbon emissions come from buildings.
“This gives people some very concrete and generous incentives to do that,” she said. “This is the biggest federal investment in buildings ever.” The incentives come in the form of tax credits and direct cash rebates financed by taxpayer dollars.
There are two rebate programs: the HOMES Rebate Program and the High-Efficiency Electric Home Rebate Act (HEEHRA).
The HOMES Rebate Program provides $4.3 billion to states to help residents save energy in their homes. It covers retrofits that make a home more energy-efficient, such as solar panels, and rebates are based on the energy savings their upgraded home will achieve.
Under the Inflation Reduction Act, the HOMES rebate should be available to homeowners who have completed whole-house, energy-saving upgrades before September 30, 2031.
HEEHRA provides rebates to low- and middle-income households to install electric appliances such as heat pumps and electric clothes dryers. These rebates are capped at $14,000, and families cannot receive two rebates for the same upgrade.
For example, if a household claims a HOMES rebate for a heat pump, they are ineligible for a heat pump rebate through HEEHRA.
NRDC’s Urbanek said, “We’re probably still a number of months for the programs to be live,” adding that the HOMES program will be operated by states which are likely now developing the implementation methods.
Rebates are usually applied after consumers purchase items, while tax credits are received when consumers file their taxes. Point-of-sale rebates are not yet available to consumers, but stores should have details later this year, according to Clean Technica.
Urbanek added that consumers should begin lining contractors up for projects when the rebates and credits become available. She advised “educating yourself about the types of equipment and what might be necessary for your own house” because it “can give people an idea of how to act as soon as this is available.”
As previously reported in The Dallas Express, the U.S. Senate passed the long-debated IRA on August 7.
The party-line vote split the chamber 50-50 and required Vice President Kamala Harris to cast the tie-breaking vote to send the bill to the House of Representatives.
The bill carries $740 billion of expenditures, which Senators Chuck Schumer (D-NY) and Joe Manchin (D-WV) claimed would “be fully paid for by closing tax loopholes on wealthy individuals and corporations.”
However, the Congressional Joint Committee on Taxation suggested that taxes would increase by $16.7 billion for those making less than $200,000 in 2023.
Additionally, an independent study based on the Penn Wharton Budget Model found the bill would likely cause “an increase in inflation for the first few years,” as previously reported in The Dallas Express.