Homeowners in the US are set to receive a substantial reward from the Federal Government as part of the much-touted $1.5 trillion Inflation Reduction Act.
The historic federal law, which went into effect by the US President earlier this year, has nearly $400 billion earmarked for various initiatives related to energy and climate change, with the aim of reducing greenhouse gas emissions. greenhouse to 40% below 2005 levels by the year 2030. Homeowners will need to play a key role in this regard, as evidenced by the renewed system of energy credits and discounts.
Although this property tax credit has existed since 2005, it expired in 2017 and has since been revived under the 2022 bill, with several modifications and expansions. If you have an energy-efficient home or would like to jump on the green bandwagon now, this guide will help you determine if you may qualify for the Reducing Inflation Act rebate.
Clean Energy Residential Credit
The previous Energy Efficient Home Property Credit has now been replaced by the Clean Energy Home Credit, with the scheme now extended beyond 2024, to 2034. With this, homeowners can purchase credits worth 30% of the cost of installing qualifying systems. of alternative energy, such as solar, wind, geothermal, biomass or fuel cells.
Under the revised bill, the regime withdrew support for biomass furnaces and water heaters, while extending new support to battery storage technologies.
The Energy Efficient Home Improvement Credit
The Non-Commercial Energy Property Credit has been revived and revamped for 2023 as the Energy Efficient Home Improvement Credit.
Under this new system, homeowners can receive tax credits worth 30% of the costs incurred for energy efficiency improvement costs, residential energy property expenses even if the applicant does not own the home, and the cost of the energy audit of the House.
The $500 lifetime limit on this scheme has now been lifted, rather than an annual limit of $1,200, and is restricted to certain property types only.
Property credit for alternative fuel refueling
With electric vehicles on the rise, the expensive facilities and infrastructure required to recharge at home have long been a problem. Homeowners can now receive a 30% discount on the cost of installing a qualifying property for alternative fuel vehicle charging, up to $1,000.
The bill further specifies that, starting in 2023, discounts only apply to bidirectional charging equipment, in which the battery can be used for energy storage and discharged back into the larger grid.
Discounts for High Efficiency Electric Homes
The crown jewel of the Reducing Inflation Act is the discounts offered to low- and moderate-income families as part of the High-Efficiency Electric Home Rebates.
With this, consumers can receive substantial, one-time discounts when purchasing energy-efficient appliances, ranging from $840 for stoves, hobs and ovens, to $8,000 for a heat pump for heating and cooling purposes.
Discounts cannot exceed 50% of the cost and the family's annual income must be less than 150% of the average household income in the area where they reside.
Final Words
There's a lot going on in the green energy space, and for homeowners with a conscious desire, now is the time to take action and work towards reducing your own carbon footprint.
With discounts, credits and subsidies as generous as these, we are likely to see a steady stream of innovations in energy efficiency and renewable energy, with the gloves officially being taken off in the fight against climate change.
