Lowering Costs for Energy-Efficient Home Upgrades
Home Efficiency Rebates are designed for homeowners who are implementing comprehensive measures to lower their energy consumption. Those who achieve a reduction of 20% or more in their home energy use may qualify for savings of up to $8,000, contingent upon household income and the extent of energy reduction.
According to The Appalachian Voice, Internal Revenue Service. In order to qualify, the residence must be an existing home in the United States. Properties used solely for business do not qualify.
General contractor John Kidda of ReNew Home, Inc., helps homeowners with energy audits, which pinpoint the areas in a home using or leaking the most energy. Energy audits can be eligible for up to $150 worth of tax credit on a $500 audit.
The biggest energy user is heating and cooling, according to Kidda, with water heating and plug loads trailing behind.
Kidda was eligible for a tax credit after purchasing a heat pump for his home in North Carolina. He describes the process as easy. His accountant just requested documentation to make sure the heat pump met efficiency standards.
Kidda spent approximately $3,000 on his heat pump and was credited around $900 on his tax returns.
Credits are available from the Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit. They can be used the year improvements are made. For improvements made in or before 2022, applicants should use IRS form 5695.
Additionally, the Inflation Reduction Act of 2022 allotted $8.8 billion for home energy rebates. Eligible homeowners can receive cash back on their energy-efficient home improvements. Every U.S state and tribe that wants to participate must apply for and be approved for funding through the Department of Energy, and then they can roll out their own programs. The DOE estimates these rebates will contribute to $1 billion saved annually on electric bills and will support over 50,000 jobs.