Thanks to tax credits established through the recently-passed Inflation Reduction Act, you could be eligible for home energy and electric vehicle (EV) incentives. Homeowners should pay attention as there are many incentives under this new climate law that could add up to significant savings for the average American. The act is designed to help reduce the nation’s soaring inflation rate and make it easier for Americans to make their homes more energy efficient.
“ The Act could spark a lot of market dynamics that will lower the cost and improve the quality of homeowners’ clean-energy investments,” said Andy Frank, founder of Sealed, a home-efficiency company. “That creates a positive feedback loop.”
The nonprofit Rewiring America has released a quick and easy online calculator that tells you if you qualify for home and EV discounts and tax credits. The tool uses input information such as ZIP code, types of fuel used, joint household income, household size, homeowner status, and whether you file taxes as an individual, jointly, or as head of a household to determine which incentives fit your profile.
The organization reports that an American household with a middle-class income could immediately save more than $10,000 upfront on discounts and nearly $5,000 on tax credits. A single American making $65,000 a year could get tax credits as high as $7,500 on a new EV alone.
The calculator lists each item and your eligible discount. They apply to new and used EVs, solar roof panels, geothermal heating installation, heat pump water heaters, electric kitchen appliances, HVAC systems, electric wiring, washers and dryers, and basic home weatherization. The tool also provides details on how much to spend and how to apply. Most items are eligible for a 30% tax credit.
A household’s income means different incentives and credits. Rebates for people with lower incomes could cover the total cost of installation and equipment of new household electric systems such as HVAC and electric wiring. Most incentives are capped at a household income of $150,000 for joint tax filers. Although citizens in higher income tax brackets may not qualify for many incentives, they can still take full advantage of the clean energy and efficiency tax credits and the home energy reduction rebate program.
The Inflation Reduction Act is designed to help the U.S. move closer to its year 2050 net-zero emissions goal. With more than 40% of American emissions coming from individual homes, making changes where it counts is vital to the goal’s success.
“ The United States can’t meet its decarbonization goals unless we electrify the 1 billion machines across our 121 million households across the country,” said Ari Matusiak, CEO of Rewiring America. “Transforming the market so that we rewire America’s households is a big task that needs to be catalyzed.”