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How Much Can You Save with New Energy Efficiency & Solar Incentives?
October 4, 2022
The Inflation Reduction Act (IRA) was recently signed into law, which is great news for California homeowners interested in energy efficiency upgrades like heat pump or solar panel installation. The massive healthcare, tax, and climate law allocates more than $300 billion to tax credits and incentives for energy efficiency home improvements and renewable energy projects.
Keep reading to learn more about the IRA tax credits and how they can help you save on your next home upgrade.
30% Tax Credit for Solar Panels and Batteries
Homeowners who install solar panels and/or solar batteries can qualify for a tax credit worth 30% of their total installation costs, thanks to the Inflation Reduction Act. The Inflation Reduction Act increased and expanded the existing solar Investment Tax Credit (ITC) to make it easier and more affordable for homeowners to install solar energy systems. The 30% solar tax credit will be available until 2032. After that, it will be placed on a drop-down schedule until it is eliminated for residential solar installations in 2035.
Brower Mechanical is the best solar company near you to help you take advantage of the solar tax credit in 2022 and beyond!
30% Geothermal Tax Credit
The Investment Tax Credit is commonly referred to as the federal solar tax credit, but it’s not just for solar panels! Geothermal heat pumps are also eligible for the 30% tax credit from 2022 until 2032. Geothermal heating systems allow you to tap into a free and virtually limitless source of renewable energy, so you can heat and cool your home without spending a fortune on energy costs. The ongoing energy savings combined with the 30% tax credit for geothermal in 2022 make geothermal heat pumps a smart investment with a high return.
30% Tax Credit for Energy Efficient Home Improvements
Eligible energy-efficient home improvement projects can qualify for a 30% tax credit starting in 2023. There is a cap of $600 per measure, with a $1,200 annual limit. There are, however, some exceptions (noted below).
Home improvements eligible for the energy efficiency tax credit include:
Heat pump installation ($2,000 credit)
Heat pump water heater installation ($2,000 credit)
High-efficiency furnaces, boilers, and central air conditioners
Energy audits ($150 credit)
Whether you’re looking for a heat pump tax credit in 2022 or you want to save money weatherizing your home, Brower Mechanical can help. We offer a full range of energy efficiency and renewable energy services to help you improve your home.
Up to $14,000 in Energy Efficiency Rebates
The Inflation Reduction Act created two new rebate programs for energy efficient home upgrades. Unlike the IRA tax incentives, rebates will be offered at the point of sale, which means homeowners can save money upfront. However, these rebates cannot be combined with other federal grants or incentives.
In order to issue rebates to consumers, individual states must apply for federal grants. Because of this, most rebates won’t be available to California residents until the second half of 2023 or later.
High-Efficiency Electric Home Rebate Program
Low and moderate-income households can receive rebates for a variety of electrical system upgrades, weatherization measures, and appliances. The maximum rebate amount per household is $14,000.
HOMES (Home Owner Managing Energy Savings) Rebate Program
The HOMES rebate program incentivizes upgrades that reduce home energy consumption. Homeowners can receive a $4,000 rebate for home energy efficiency retrofits with modeled energy savings of 35% or more, or $2,000 for 20%-34% energy savings.
Start Your Home Upgrade with Brower Mechanical and Save
Brower Mechanical is here to help you navigate all the new tax credits and rebates so you can maximize your savings while upgrading your home’s energy efficiency. Our expert, friendly team is always ready to help California homeowners save money and energy, and we can help you decide which upgrades make the most sense for your home. Whether you’re looking for a heat pump company or a solar installer near you in the Sacramento area, Brower Mechanical is the go-to expert for all your energy efficiency needs.