What if you could get paid to save money?
It's not too good to be true. Homeowners can do just that with the Inflation Reduction Act.
The scoop
The IRA was passed in part with the goal of transitioning Americans away from dirty, polluting energy sources like gas, oil, and coal and toward clean, renewable energy sources like solar, thermal, and electric.
There are multiple ways to earn money back under the IRA, including replacing appliances and energy systems as well as switching to an electric vehicle.
One specific way to save is by replacing your home's water heater with a highly efficient heat pump water heater. For the 2024 tax year, the IRA will cover up to 30% of the project's cost up to $2,000 in tax credits, per the Department of Energy.
Also, rebates of up to $1,750 for making this upgrade, supported by the federal act, may be available at certain household income levels and in certain states — or could be soon as these rebate programs continue to roll out.
And the heat pump replacement is just one of many that could rake in the incentives. Upgrading to a modern breaker box could get you up to $600 in federal tax credit money (not to mention any possible rebates); leveling up to an electric vehicle could get you up to $7,500 in incentives.
The rewards are even higher for low and moderate-income families, so it's worth checking what you qualify for to make sure you don't miss out. Electrification nonprofit Rewiring America has a free savings calculator that helps you easily assess your potential earnings.
How it's working
The best part about the IRA isn't just the initial payout; it's the fact that these upgrades continue to save you money over time.
For example, since a heat pump is significantly more efficient than a traditional HVAC system, you'll save about $1,000 a year on average in utility bills. Similarly, upgrading to an EV means lower car maintenance costs, better fuel economy, and no paying for gas.
Not only are these replacements better for your bank account, but they're also better for your health. Many dirty-energy-powered appliances and vehicles have been linked with increased indoor air pollution and exposure to toxins and carcinogens. Upgrading to a cleaner alternative means that you and your family will be safer and healthier at home.
There's also the matter of environmental health. By eliminating reliance on pollution-spewing outdated appliances, energy sources, and vehicles, you're taking a large step towards establishing a cooler and more sustainable future.
Considering the multitude of benefits, don't wait — check out Rewiring America's cost-savings calculator now.
What people are saying
Another exciting development is that many other states are rolling out additional incentives, so you could earn even more for these projects. For example, homeowners in Denver who upgrade to a heat pump (for heating and cooling, but also possibly for water heating) are often eligible for rebates from the city, the local utility, or the state, per Forbes.
"What's really important to remember, here, however, is that all of the above rebates may be stacked with the IRA tax credit to provide further savings for homeowners," Forbes quoted energy expert DR Richardson.
The Department of Energy described the IRA as a "historic investment," saying that it will enable Americans to "deploy the next generation of technologies required to complete the clean energy transition."
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