In 2022, the Inflation Reduction Act was pushed forward by Congress and signed into law, becoming what's considered the biggest climate-focused investment by the U.S. government in history. Now, millions of Americans can benefit from the legislation.
Energy-efficient upgrades like solar panels, heat pumps, electric vehicle purchases, home insulation, and other efficiency and weatherizing improvements can massively reduce energy bills on their own, creating even more savings in the long term.
However, many have been reluctant to make these changes, as upfront costs can be steep. Enter the IRA, which has tax incentives and rebates that make it easier for people to make these home improvements — which are also eco-friendly.
Take heat pumps, for example. These generally electric, dual heating and cooling systems use only a third of the energy or less than other HVAC units account for, per the U.S. Department of Energy.
With initial purchase and installation costs of up to about $8,000 per some estimates (or more by others), they haven't been obtainable investments for many until the IRA, which provides a federal 30%-of-cost and up-to-$2,000 tax credit for all qualifying heat pump purchases.
Certain qualifying American households can save up to $14,000 through the Home Electrification and Appliance Rebates program. It's basically free money to remodel your home at a fraction of the cost while cutting the costs of energy bills.
Beyond financial benefits, these modifications also help cool our warming planet by reducing pollution from the use of dirty energy sources, which produce heat-trapping, toxic gases. In short, electrifying your home, vehicle, and appliances is a win for everybody.
If you don't know where to start, Rewiring America has free tools to navigate which tax incentives or rebates are available in your area. It can even help you find trusted contractors to make the installation process easier.
"We installed a heat pump last year and were able to claim $2,000 on our taxes for 2023," one person shared with The Cool Down. "We talked to our installer to make sure that the model he chose would qualify and then saved all the invoices and were able to submit and get the credit without much trouble!"
"We installed mini-splits which take the place of our old boiler and window AC units," another wrote about an upgrade to a particular variety of heat pumps. "The tax credits helped a lot."
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