From MSCO Heating & Cooling – Information to Help Put Money in Your Pocket
In August 2022, Congress and the president took an important step to aid American families by establishing both the Energy Efficient Home Improvement Credit and the High Efficiency-Electric Home Rebate Program.
Both measures were part of the Inflation Reduction Act (IRA), a piece of legislation designed to provide economic relief and assistance to American homeowners. While their titles are a bit cumbersome, they offer substantial financial incentives to you, the homeowner, to make your home more energy efficient.
Some incentives are now available, while others will gradually become effective over the next 12-24 months.
What Does the Inflation Reduction Act Do?
Summarized briefly, the Inflation Reduction Act of 2022 puts money in your pocket by providing rebates for making clean energy and energy efficiency improvements in your homes.
While some details of both programs are still being worked out in Washington, here’s a brief summary of the ways you might save a lot of money through these two programs included in the Inflation Reduction Act.
High Efficiency-Electric Home Rebate Program
Under this part of the IRA, households with a total income that is 150% or less of their area’s median income (AMI), as well as low-income families whose total income is less than 80% of their AMI are eligible for the rebate program.
Households whose income is between 80-150% of their AMI are eligible for rebates up to 50% of the project costs, up to the caps listed below.
Households whose income is less than 80% of their AMI are eligible for rebates equal to 100% of the project costs, up to the listed caps.
Some of the rebates in the law include up to:
- $1,750 for a heat pump water heater
- $8,000 for an HVAC heat pump
- $2,500 for electric wiring
- $4,000 for an electric load center upgrade
Energy Efficient Home Tax Credit
In addition to the rebates, the IRA also revised and revamped the Efficiency Tax Credits established under earlier legislation.
Beginning in January 2023 and running through 2032, eligible households will be able to claim a tax credit of 30% of the cost of energy-efficiency projects up to $1,200 a year. Some of these include up to:
- $600 for the highest efficiency tier of central air conditioners, as well as other qualified gas, electric, or propane HVAC systems, and electrical upgrades that will enable the energy-efficient upgrade.
- $2,000 for electric heat pumps and heat pump water heaters. This tax credit for the installation of heat pumps or heat pump water heaters does not count towards the $1,200 annual limit.
Have Questions? Call MSCO Heating & Cooling for Answers
We understand that at first glance, all this information can be a bit confusing, and as we said, some additional details are still being worked out in Washington.
If you think you may qualify for either rebates or tax credits or both, or have any questions about these programs, call your friends at MSCO Heating & Cooling. We carry a large variety of energy efficient Trane, Bosch, and Honeywell HVAC products, and we’ll be glad to discuss these programs with you and determine if you qualify for either or both of them.
We want to do all we can to help you keep as many of your hard-earned dollars as possible. So please don’t delay, give us a call at MSCO Heating & Cooling today!