Reap the benefits of energy efficiency tax credit when your upgrade your home

As we become more aware of our environmental impact, American homeowners have begun looking for ways to make their homes more energy efficient. And while energy-efficient upgrades are often more expensive than their less efficient counterparts, recent legislation like the Inflation Reduction Act of 2022 has sought to make these upgrades more accessible to encourage homeowners and businesses to reduce their carbon footprint. Below, we'll explore the various tax rebates available for energy-efficient home modifications, the benefits of making these upgrades, and how you can take advantage of these incentives.

What are Energy Efficiency Tax Credits?

First off: Energy Efficiency Tax Credits are a type of incentive offered to homeowners who make energy-saving improvements to their homes. These tax credits are available for several upgrades, such as energy-efficient windows, insulation, heating and cooling system upgrades, and solar panel installations. The specifics of what is offered and for what differ greatly based on location and income. To find out if you qualify for any of the credits or rebates listed below, consult your local tax advisor for a specific understanding of the rebates and credits you may be eligible for.

What is the Inflation Reduction Act, and How is it Related?

In August of 2022, the Biden administration signed a bill called the "Inflation Reduction Act" (or IRA) into law. This landmark piece of legislation was passed to lay a framework that would allow for a nationwide boost in clean energy usage, help to reduce healthcare costs, and increase tax revenue over the next decade. One of the bill's main goals was to address climate change, and while the new law primarily set out to help businesses adopt more eco-friendly measures, incentives were put in place for ordinary Americans to go green too. These incentives have mostly been presented in the form of tax credits and rebates, which allow homeowners to make improvements and modifications to their homes for less, so long as they adhere to specific energy efficiency standards.

What Home Rebates Are Available?

While this list is by no means comprehensive, these are a couple of the more notable credits and rebates available in 2023. For more information, check with additional resources such as this comprehensive write-up at Solar.com or the FAQ on these credit types at IRS.gov.

The High-Efficiency Electric Home Rebate

One of the more notable homeowner incentives included in the IRA was the "High-Efficiency Electric Home Rebate," a consumer rebate for low and moderate-income households that provides greater accessibility to energy-efficient appliances and modifications by reducing the costs necessary to purchase them. Depending on your household income, this rebate could cover from 50% to 100% of your project's cost (up to $14,000) and includes the installation of new heat pumps, upgrades like insulation, as well as rewiring. The goal of this rebate, like many of these incentives, is to reduce household carbon emissions, but the added benefit is that many of these upgrades can help American homeowners save money on their monthly energy bills and create healthier indoor environments.

The Energy-Efficient Home Improvement Credit

Another popular program is the Energy-Efficient Home Improvement Credit (or EEHIC). The EEHIC allows homeowners to claim 30% of the total costs associated with all eligible home improvement projects made during the year. There are limitations, however, as the credit is capped at a certain amount per project and has a total annual cap of $1200, but the credit has no income requirements, meaning anyone taking steps to remodel more efficiently can feel the benefits of doing so.

Where Do I Start?

An excellent place to begin is with a "home energy audit," or assessment that can help you to determine how efficiently (or inefficiently) your home is expending energy. This audit will examine everything from air leaks to the quality of your insulation and is made to find all of your home's energy-related shortfalls.

While handy types can make these assessments themselves, finding a professional who can do the audit for you is often recommended. Many energy providers will do these audits for free, and their inspectors often will discover things you wouldn't think to look for. Regardless of how you do it, having an audit is a great first step in figuring out where you stand. Once you know where your home is losing energy, you can start making improvements and sift through the list of available rebates and credits more effectively based on your need.

Do I Need to Upgrade My Home?

The short answer? No – so long as your home and its appliances are functional, none of these upgrades are necessary. The aim of these tax credits and incentives is not just to reduce carbon emissions but to lower the energy costs you pay out over time. Data suggests somewhere between 10-20% of what the average American pays in energy bills annually is wasted due to air leaks and outdated appliances. Energy efficiency modifications cost money up front but are often considered to save significantly in the long run.

Conclusion

Because of recent legislation and general awareness of our environmental impact, more tax credits and rebate programs are available to help you upgrade your home with more energy-efficient standards than ever before. From heat pumps to insulation rebates, there are plenty of options, so why wait? Audit your home and determine the upgrades you need to make your home more energy efficient today!

If you're looking for new windows, look no further than Window World. We are an ENERGY STAR partner, which means we are actively committed to developing intelligent solutions that improve people's lives and our planet's health. And because a number of our window and door packages are ENERGY STAR-certified, our packages can reduce your energy bills and qualify you for the energy-efficient home improvement credits mentioned above.

For more information, drop by your local Window World store and find out more about how these products can transform the home you love. It all starts with a free consultation and quote. Find the Window World store near you today.