CL-September 2024 - 21

ENERGY SENSE
An Upgrade
Courtesy of
Uncle Sam
Federal tax credits,
incentives and rebates for
home improvements
by Miranda Boutelle, Contributing Columnist
Q:
F
How do I use federal
tax credits and rebates
to upgrade my home?
irst, knowing the diff erence
between a tax credit and a rebate
is essential. A rebate is a payment
for purchasing or installing a qualifi ed
product or home improvement.
Depending on how the rebate
program is set up, it may be provided
at the time of purchase or applied for
and received aſt er installation.
A tax credit is a dollar-for-dollar
amount that taxpayers can report on
their tax documents to reduce the
amount of taxes owed. When you fi le
your tax documents, you apply for a
tax credit, so it typically takes longer
to reap the benefi ts than a rebate.
According to Energy Star, homeowners
can qualify for up to $3,200
annually in federal tax credits for energyeffi
ciency upgrades. Federal tax credits
are available for heating and cooling
system upgrades, including heat pumps,
furnaces, central air conditioners, boilers
and geothermal heat pumps. Tax credits
for Energy Star-rated heat pump water
heaters cover 30% of the project cost,
up to $2,000. You can also improve
your home's envelope - the portion
of the home that separates the inside
from the outside - with tax credits
for insulation, windows and skylights.
If an energy-effi ciency upgrade
co-opliving.com
Look for the Energy Star logo
on the energy guide to identify
which appliances are the most
effi cient options.
A:
You can improve your
home's envelope with tax
credits for insulation.
Tax credits and rebates can help bridge the aff ordability gap for
higher-effi ciency equipment for your home, allowing you to complete
energy-effi ciency upgrades that can lower your energy use and
save you money in years to come.
requires improving the electrical panel
in your home, there's a tax credit for that
too. You can receive 30% of the panel
upgrade cost, up to $600.
Th ese federal tax credits are available
through 2032. You must own the home
you're upgrading, and it must be your
primary residence. Federal tax credits
only apply to existing homes in the
U.S., not new construction.
Th e Infl ation Reduction Act of 2022
expanded available funding for many
home upgrades. Th e act allocated $8.8
million for home rebate programs to be
implemented at the state level, and this
funding is off ered in two diff erent programs.
Th e HOMES program allows up
to $8,000 per home for standard-income
households. Higher rebates are available
for low-to-moderate-income families.
Th e HEAR program off ers rebates of
up to $14,000 per home for qualifi ed,
effi cient electric equipment for low-to
moderate-income households.
Th ese programs are designed to
bolster existing programs and should
be available in late 2024 or early 2025.
Additional energy-effi ciency rebates
may also be available. According to
the American Council for an EnergyEffi
cient Economy, more than half of
U.S. states require energy-effi ciency
programs for
residents. Th ese
programs can
help people save
money on their
electric bills
and help states
meet climate
goals, reduce
system costs,
and improve the
electric grid.
I have had
the privilege
of working in
energy-effi ciency
rebate programs
for many years
and have seen
the benefi ts of
the benefi ts of
these programs
make upgrades
these programs
fi rsthand. Tax
credit and rebate
programs can
credit and rebate
make upgrades
more aff ordable - helping people save
of their homes.
*
Miranda Boutelle writes on energyeffi
ciency topics for the National Rural
Electric Cooperative Association.
September 2024 * Cooperative Living * 21
more aff ordable - helping people save
money and improve the overall comfort
PHOTO COURTESY BONNEVILLE POWER ADMINISTRATION
http://www.co-opliving.com
CL-September 2024

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