Biden’s Inflation Act offers up to $14,000 for home renovations. Here’s how to qualify.

President Biden’s Cut Inflation Act Attacks climate change by helping Americans reduce their carbon footprint. A key part of this push is offering up to $14,000 in rebates and tax credits for people to make their homes more energy efficient.

These benefits can be used to reduce the cost of home renovations, from installing heat pumps to purchasing new electrical appliances like stoves and clothes dryers. About 40% of carbon emissions come from buildings, so such incentives could help the United States reach its goal of reducing fossil fuel emissions, said Lauren Urbanek, senior energy policy attorney at the Natural Resources Defense League. non-profit.

“It gives people very concrete and generous incentives to do so, both in the form of tax credits and direct cash rebates,” Urbanek told CBS MoneyWatch. “This is the largest federal investment ever made in buildings, at least one specified for climate change.”

Here’s what you need to know about incentives.

What discounts can I get?

There are two separate reimbursement programs, according to the NRDC.

  • The HOMES Rebate Program: This provides more than $4 billion to states to help residents make their entire homes more energy efficient. The program offers rebates based on the energy savings achieved by their renovated home. For example, homeowners who make changes that reduce their energy consumption by at least 35% can get up to $4,000 in rebates. This amount is doubled for low- and middle-income households, who can get up to $8,000 in rebates.
  • High Efficiency Electric Home Rebate Act (HEEHRA): This offers discounts to low- and middle-income families to electrify their homes, for example by installing heat pumps or electric clothes dryers. The rebate per household is capped at $14,000 and households cannot receive two rebates for the same upgrade. For example, if they claim a HOMES rebate program for a heat pump, they cannot get a rebate through HEEHRA either.

What types of upgrades are covered?

The HOMES rebate program would cover upgrades, from solar panels to new windows, that help your home become more energy efficient.

By law, the HOMES rebate should be available for energy-efficient whole-house renovations that begin after the Inflation Reduction Act comes into effect on August 16, 2022 and end before September 30, 2031 However, because the program is not up and running, details on how to claim the rebates retroactively are not yet known.

The HEEHRA program designates discounts for specific device purchases and other upgrades. One of the most attractive rebates is a provision offering up to $8,000 for heat pumps which, despite their name, provide both cooling and heating.

When it comes to energy consumption, these devices are often better alternatives to space heaters because they use electricity rather than gas or oil to heat a home. Compared to electric resistance heating like baseboard heaters, they can reduce electricity consumption by about 50%, according at the Department of Energy.

Variant from $4,000 to over $7,000 each, heat pumps can cost a pretty penny. Both rebate programs can help offset some or even all of the cost of these devices for many consumers.

Here are the discount caps for other upgrades made through the HEEHRA program:

  • $1,750 for a heat pump water heater
  • $8,000 for a heat pump for space heating and cooling
  • $840 for electric ranges, cooktops, ranges, ovens and heat pump electric dryers
  • $4,000 for an upgrade to the electric charging service center
  • $1,600 for insulation, airtightness and ventilation
  • $2,500 for electrical wiring

There is a $14,000 cap on the dollar amount of rebates offered under the program. For example, low-income homeowners can get up to 100% of electrification projects covered – up to a cap of $14,000 in rebates – while middle-income consumers can get up to 50% of their costs covered by rebates (also up to this $14,000 cap).

To qualify for the HEEHRA, you will need to earn 150% or less of the area median income, as determined by the Department of Housing and Urban Development.

However, it is unclear whether the HEEHRA discounts will be retroactive given that they will be implemented as point-of-sale discounts. The Inflation Reduction Act notes that the funds will be available until September 30, 2031.

What types of tax credits can I get?

Tax credits are different from refunds because consumers receive them when they file their tax returns. Discounts, on the other hand, are often applied when someone purchases an item. HEEHRA rebates should be available at the point of sale, such as when a consumer purchases a heat pump from a home supply store.

The Reducing Inflation Act extends a tax credit for homeowners’ energy efficiency, called the Energy Efficient Home Improvement Credit. This covers up to 30% of the cost of energy upgrades, with a cap of $1,200 per year.


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This tax credit was previously available to homeowners, but it was a lifetime credit, meaning you could only claim it once. But the IRA makes the credit an annual incentive, meaning homeowners could claim the credit for upgrading windows one year and buying a heat pump the next.

How do I register for these programs?

You can’t claim refunds or tax credits yet, Urbanek noted.

“We probably still have several months left for the programs to be live,” she said, adding that the HOMES reimbursement program will be managed by the states, which are likely working to implement their plans now.

Similarly, point-of-sale discounts are not yet available to consumers, but stores should have details later this year. according to the trade publication Clean Technica.

Programs may have different rules on

What should I do now to prepare?

According to experts, owners can now take two steps to prepare. First, schedule a home energy audit, which usually costs around $400 and can offer advice on how to make your home more efficient. according home counselor.

Second, start talking with contractors to align them with projects when the rebates and tax credit become available, Urbanek noted.

“Learning about the types of equipment and what might be needed for your own home can give people an idea of ​​how to act when it’s available,” she said.

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