The Inflation Reduction Act (IRA), which was passed in 2022, is landmark legislation that aims to curb inflation and fight climate change through an array of strategies, including investing in electrification, reducing energy demand, and promoting domestic clean energy production. Expected to boost the U.S. economy, strengthen American energy security, and reduce greenhouse gas emissions by 40% by 2030, the IRA is a huge step in the right direction to a clean energy future. It also will help you save money.
For Idahoans, the IRA means cash-back rebates and tax credits for dozens of investments including solar power, batteries, large appliances, electric vehicles, and charging stations. It also includes new opportunities for small businesses, agriculture, and research. The legislation will also impact the daily lives of Idahoans. From your garage to your kitchen to your bathroom, the IRA can save you money in nearly every room of your house. You don’t have to own your home to benefit – renters or people living in a multifamily building can qualify too.
From smaller, low-tech upgrades to big purchases, the IRA will reward people who make all types of climate-friendly renovations to their homes.
The Energy Efficient Home Improvement (Tax) Credit is getting a renewal and big upgrade, allowing consumers to save more money when making energy saving renovations to their homes. You can get money back for many renovations, including adding insulation, installing energy-efficient windows, and for upgrading your current appliances. The amount you get back depends on how much energy you’ve saved, how you prove those energy savings, and your household income. So the more energy you save, the more cash you get!
For low and moderate-income households, the savings can be as much as $14,000 per year, with point-of-sale discounts and up to 80 percent of project costs covered. If you quality and reduce your energy usage by 35 percent, you can save up to $8,000. These tax breaks not only help incentivize efficiency upgrades, but also put them within financial reach of most Idahoans, meaning everyone has the opportunity to have an energy efficient home run by clean electricity.
Let’s break down how you can take advantage of this funding and start saving money in every room of your home! Many of these discounts will be available at the point-of-sale in the coming months.
Kitchen: A recent Stanford study revealed gas stoves leak about as much climate pollution as 500,000 gas-powered cars. The IRA provides a rebate of up to $840 for a new electric or induction stove and fully electric oven.
Laundry Room: A new heat pump dryer recycles and dehumidifies the hot air created while drying your clothes, making it very efficient! Consumers can enjoy a rebate of up to $840.
Utility Room: Your new energy efficient heat pump water heater could be eligible for as much as $1,750 cash-back. Breaker box upgrade rebates are up to $4,000. Low and moderate income households are prioritized for these savings.
AC and Heating: Natural gas prices have been extremely volatile over the past few years. The IRA solves this problem by supporting a grid-wide move to cheaper, cleaner sources of electricity while reducing the cost to consumers. An electric heat pump not only uses less energy than conventional AC and heating but gets both jobs done! Available tax credits go as high as $8,000.
Insulation: Low and moderate income families are now eligible for a rebate of up to $1,600 for improving their home insulation and sealing energy leaks.
Electric Vehicles, chargers, equipment, and garage remodel: In 2022, the Idaho State Office of Energy and Minerals completed plans to build out EV charging stations across the state, putting “range anxiety” in the rearview mirror. The IRA gives even more incentives to make your next car purchase an EV. Used plug-in hybrid and all-electric cars have a tax credit of up to $4,000 and new EVs’ credit is as much as $7,500. You will likely want to install a vehicle charger at home; for that there is a 30% rebate of up to $1,000. For a sample comparison of which EV could be right for you, click here.
Renewable energy and battery installation: Although more and more people are installing rooftop solar, for many, the investment is still too expensive. The IRA aims to change that. The Residential Clean Energy (Tax) Credit gives a credit of up to 30% for installing solar, wind, or geothermal energy for electricity or heating, and for battery storage. This includes labor, fees for permits, inspection, and development. There are also no income or location restrictions and no cap on total cost. Unused tax credits can also roll over to the next year.
Rural development: Through USDA Rural Development’s Rural Utilities Service and Rural Business-Cooperative Service, Idaho’s 25,000 farms are eligible for support when they implement climate-smart agricultural practices, conservation, and stewardship that creates healthy nutrient-dense soils.
For more figures on tax credits for home builders and remodelers, click here. To find out just how much money you could save with the Inflation Reduction Act, use this savings calculator. If you’d like to have an energy audit done on your home before making some of these investments, the IRA also offers a tax credit for that. All Idaho State and local grants, loans, and rebates can be found on the DSIRE webpage.
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