The Inflation Reduction Act (IRA) is simplifying Americans’ clean energy transition with rebates on home energy on appliances such as electric ranges, heat pumps, and heat pump water heaters. With at least $4.5 billion in these rebates, homebuyers and renters can save money while decreasing their carbon footprint by as much as thousands of dollars.
What Is the Home Energy Rebate Program?
Home Energy Rebate is a program at the national level that aims to get individuals to switch from gas-guzzling home devices to more energy-efficient electric devices. The states administer them separately and offer them as long as funds last or through September 30, 2031, whichever is sooner. Some of them have already begun signing up, though others will begin later. You can track your state on the Department of Energy’s rebate portal.
Two Home Energy Rebate Types
Two large rebate programs exist under the IRA:
Home Electrification and Appliance Rebates (HEAR)
These include Energy Star-rated appliances and installation, with an emphasis on low- and moderate-income families. The rebates are received at the point of sale, so you would not have to wait to get your reimbursement.
Who is eligible?
- Families with incomes of up to 150% of the area median income.
- Low-income families (less than 80% of median income) may be eligible for 100% of the cost.
- Moderate-income families (80% to 150% of median income) may be eligible for up to 50% of the cost.
What is covered?
- Up to $840 for an electric or induction range, oven, or heat pump dryer.
- Up to $1,750 for a heat pump water heater.
- Up to $8,000 for a heat pump for heating and cooling.
- Up to $4,000 for a high-capacity electric load service center.
- Up to $14,000 total per residence.
Landlords and multi-family developers can also be eligible if 50% or more of the tenants are low- or moderate-income.
Home Efficiency Rebates (HER)
This program provides rebates for energy-saving home improvements that save at least 20% on energy use. In contrast to HEAR, HER places no income limit on the household, but lower-income households receive more rebate money.
Eligible improvements include:
- Window replacement
- Replacing Heating, Ventilation, and Air Conditioning systems
- Improving insulation
- Electrical panel replacement
- The highest rebate under this program is $8,000.
How and When to Apply
Your own state will run its own rebate program. New York and others already have online applications available, while others will allow you to shop through approved contractors or retailers. If your state has not yet begun the program, however, there are still things you can do in advance. You might browse Energy Star appliances and even save receipts with an eye toward potential retroactive payment.
Can not Wait for Rebates? Other Financial Options
Are you not qualified for the home energy rebate program, or do you need to upgrade now? Other incentives are available:
- Energy Efficient Home Improvement Tax Credit (25C): This allows homeowners to deduct up to 30% of energy efficiency improvement costs each year through 2032. Details on IRS website.
- State and Utility Rebates: Many states and utility companies offer additional rebates, which can be combined with federal programs. Check DSIRE for local offers.
What to Buy When It Is Time
If you are planning to upgrade, here are some of the best Energy Star-certified options:
Heat Pump Water Heaters
Heat pump water heaters have the potential to save water heating expenses by up to 75%. Most states are phasing out traditional water heaters and installing heat pump water heaters since they are very efficient and eco-friendly.
The systems work by extracting heat from the surrounding air and transferring it to the water, making them much more efficient than traditional electric or gas water heaters.
Check out Energy Star’s list of certified products to see which is the best fit for your home. Utility companies offer most rebates to offset the initial cost as well.
Electric and Induction Cooktops
Induction stoves use the most energy efficiently, harnessing 85% of the heat produced to cook food as opposed to a meager 32% by gas stoves. Gas stoves emit harmful pollutants such as methane and benzene, which can be harmful to indoor air quality.
Induction cooking uses electromagnetic energy to directly heat cookware, resulting in fast heating, accurate temperature control, and reduced risk of burns. Replace, replace with an Energy Star-certified induction range for optimal efficiency and safety. Induction cooking is burn-risk-free and eliminates the open flame from the kitchen.
Heat Pumps for Heating and Cooling
Heat pumps heat and cool, so they are one of the least costly home improvements. The Department of Energy has information about how to select the proper heat pump for your location.
Conclusion
Even if IRA rebates extend until 2031, money might be spent more quickly. Should you want an upgrade, get prepared in advance by reviewing your suitability, understanding what appliances exist, and seeing if your house’s electricity system will allow you to upgrade with newer efficiency-friendly elements.
By taking advantage of the home energy rebate program, you can save on your energy bill, reduce your carbon footprint, and have your home feel cozier – all for costing you less!