The Inflation Reduction Act (IRA) is a “free electric bank account with your name on it.” It’s packed with rebates and tax credits that will help Americans buy everything from electric vehicles to solar and electric appliances to heat pumps. Check out this easy-to-use IRA savings calculator from Rewiring America that tells you what you’ll get and when.
Rewiring America is a nonprofit electrification organization whose “goal is to make electrification simple, measurable and inevitable.” We just upgraded to a 200 amp service panel last week and had rooftop solar and Tesla Powerwalls installed this week, so this savings calculator has been a valuable tool for us. I just double-confirmed in a matter of seconds (it’s my personality; I can’t help it) that we can claim a 30% solar tax credit, a 30% battery storage installation tax credit, and a 30% tax credit that capped at a maximum of $600 to upgrade our new electrical panel.
We purchased a US-made 2023 Volkswagen ID.4 late last year and Rewiring America’s calculator confirmed that our car qualified for the full $7,500 tax credit.
In my electrification journey, I have found that I need to do my own research and advocate as electricians, heat pump installers and car dealers are still learning how the new tax credits and rebates work. Most of the time I fill them out. (Then I’ll share with you what I learned – this Is after all, my job. And I will do that once my solar and storage project is fully online.)
The people who help us electrify want I want to know about the IRA discounts and tax credits and would like to help me in return. Everyone we’ve worked with is actively doing their part on climate change and they appreciate it when I share the information I find with them.
Discounts under the Inflation Reduction Act
On July 27 of this year, the U.S. Department of Energy (DOE) issued guidance for states, territories, and the District of Columbia to apply for their share of $8.5 billion in electrification and energy efficiency rebates from the IRA. This financing will save consumers a lot of money on home improvements and utility bills.
Rebates include home electrification and appliance rebates that serve as immediate point-of-sale rebates to low- and moderate-income households on qualifying electrical purchases.
There are also those Home Efficiency Discounts Program that rewards modeled energy savings of at least 20% or measured energy savings of at least 15%. So if you save a certain amount of energy and have receipts, you will receive a refund. There is no income cap, but at least half of the program’s funds go to low-income households.
We’ll have to wait a while for rebates to become available – Department of Energy Deputy Secretary David Turk said in August that the Energy Department expects “these rebates will be available to consumers in some states as early as the end of this year.” On an ongoing basis continued in 2024.”
Rewiring America has a disclaimer about government rollouts on its Inflation Reduction Act Savings Calculator page:
Rebates may be implemented differently in each state, so we cannot guarantee final amounts, eligibility, or timing.
(Like Florida – Gov. Ron DeSantis rejected $377 million in funding that would eliminate rebates for things like wiring, weatherproofing and electric stoves. Sorry, Floridians.)
The “Smith Family”
With tax credits now available, it’s worth familiarizing yourself with the IRA savings calculator. Here’s how it works: Enter your zip code, homeowner status (renters also qualify), household income, tax filing status, and household size into the IRA Savings Calculator and click “Calculate!”
It then displays your personalized incentives and separates tax credits from upfront discounts (e.g. rebates).
I created the “Smith Family” as a case study: a family of five, homeowners, household income of $120,000, head of household filing taxes, zip code 19352 (that’s Pennsylvania).
The calculator says the Smiths will be eligible for refunds in 2024 and will be immediately eligible for $15,600 in tax credits, meaning the Smiths can claim those tax credits on their 2023 taxes if they install a solar system before the end of the year on the roof or buy an electric vehicle the year. They have an estimated energy savings of $1,500 per year, the latter based on Pennsylvania energy costs.
Rebates – what Rewiring America calls “upfront rebates” – are based on a percentage of the area median income, and the Smith’s area median income is $114,400 because they live in the 19352 zip code. (You can use this Fannie Mae Regional Median Income search tool to find your area’s average income.)
So that means they are entitled to some good discounts. For example, as a middle-income household, here’s what you would get for an induction cooker:
For low-income households (below 80% of the regional median income), electrification rebates cover 100% of the cost of your electric/induction stove up to $840. For middle-income households (between 80% and 150% of the regional median income), electrification rebates cover 50% of the cost of your electric/induction stove up to $840.
Rewiring America also offers an easy-to-follow online IRA guide called “Go electric!” (Now).” You can access it here.
Read more: Here’s how the new U.S. tax credits and rebates for clean energy home upgrades work
Correction: An earlier sentence read: “Governor Ron DeSantis rejected $377 in funds.” We have corrected it to read: “Governor Ron DeSantis rejected $377 million in funds.” We apologize for the typo.
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Source : electrek.co