What if we told you that the federal government set up an $8,000 savings account just for you to improve your home and lower your energy bills?
Though Uncle Sam didn't literally do this, he may as well have.
In 2022, Congress passed the Inflation Reduction Act, aka the IRA, its largest-ever action to fight the overheating of our planet. Included in the IRA are a ton of tax credits and rebates for homeowners to go green and save some cash on their energy bills at the same time, which can actually go well beyond $8,000 in total depending on how many different areas someone were to take advantage of, many of which can be applied for here.
For home efficiency alone, the IRA makes $8,000 available through the Home Efficiency Rebates program. And then through the Home Electrification and Appliance Rebates program, American households can save as much as an additional $14,000 in tax credits and rebates (some upfront), with another $8,000 of that $14,000 allocated to a rebate for installing a modern dual-use heat pump for space heating and cooling, which may not be available for redemption yet in all areas.
Other examples through the IRA include getting a rebate of up to $1,600 to weatherize your home with improved insulation, which would certainly reduce your monthly energy bill. And if you wanted to install an efficient induction stove instead of the gas ones that leak harmful pollution into your home, you could get a rebate of up to $840, too.
Bill McKibben, one of the nation's leading environmental journalists, has lauded the IRA for its efforts to eliminate the financial burdens of improving Americans' homes.
"In essence, the IRA creates an $8,000 bank account for every American household … if people figure out how to access it and use it," McKibben said during a press briefing.
And it can be a bit tricky to access and use it, to that point. Luckily, organizations like the nonprofit website Rewiring America are helping Americans access these "bank accounts." On its site, Rewiring America has an "IRA Savings Calculator" tool that shows you exactly how much you could save, along with instructions on how to redeem that money.
But the financial savings aren't the only reasons to make these home improvements now, as McKibben has eloquently explained.
"The good news is that these technologies are better than the ones that they replace. Your magnetic induction cooktop is better than the gas flame that you cook on, cheaper, and it doesn't give your kids asthma," he said. "The heat pump is an elegant replacement for the furnace and cheaper to use in the long run."
So if you want to do any home improvements or renovations, check to see if you can dip into your new "bank account." If you don't, you could be flushing money down the toilet, whether you're making upgrades or sticking with the energy-inefficient status quo.
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