How the new climate law could help you save money
Have you heard that the recent Inflation Reduction Act (IRA) includes help for climate-friendly choices at home? If so, you may wonder which tax credits, rebates, and discounts you can qualify for. This new climate law has many incentives for homeowners and property owners, but the specifics can be a challenge to navigate.
The IRA offers tax credits and rebates to consumers who buy clean vehicles and appliances or take other steps to reduce their carbon footprint. The incentives in the IRA will put non-fossil fuel alternatives within reach of more people. The savings for eligible clean energy projects will depend on energy reduction and household income level.
The law offers financial incentives for:
- Insulation and air-sealing
- Weatherized windows and doors
- Energy-efficient electric appliances
- Electric vehicles and charging equipment
- Heat pump heating systems
- Heat pump water heaters
- Rooftop Solar
Incentives can come in the form of tax credits, rebates, or discounts at the time of purchase. Some incentives are available now, and others will become available in 2023.
Here are some tax credits you can use in 2022:
- Adding insulation, energy-efficient windows, and doors: the current tax credit (10% of up to $200-500) credit is in place through 2022.
- Heat pumps: the current tax credit (10% up to $300) is in place through 2022.
- Electric vehicles: the current EV tax credit ($7,500, with a per-manufacturer unit cap of 200,000) is in place through 2022. The IRA’s final assembly requirement affects the tax credit in 2022.
- Electric vehicle chargers: the IRA extends the EV charger tax credit (30% up to $1,000) through 2022.
- Rooftop solar: the IRA’s tax credit (30%, uncapped) is retroactive to 2022.
Rewiring America has released an online calculator that tells you which incentives you qualify for. The calculator points to the home and vehicle discounts, rebates, and tax credits that will be available through the IRA.
The White House also launched a “Clean Energy for All” website to guide rebates and tax credits offered by the new law.
Now that the Inflation Reduction Act is law, will it transform your home? Vermont’s climate goals in the Vermont Climate Action Plan reflect many of the same priorities as these clean energy provisions in the IRA.
Need more convincing? In addition to lowering your energy costs:
- weatherization projects make your home more comfortable and resilient.
- going electric will cut your carbon footprint (the three biggest contributors to your emissions are your car, home heating, and water heating).
- heat pumps heating systems, heat pump water heaters, and heat pump clothes dryers continue to benefit the environment into the future as the grid becomes cleaner.
- some consumers qualify for more than $14,000 in financial incentives.
Further guidelines, including a timeline for these rebates, will be determined as programs develop. Efficiency Vermont rebates and these federal incentives will help Vermonters of all income levels gain access to clean energy.