While its name may lead you to believe that the Inflation Reduction Act (IRA) would only be aimed at reducing gas prices and grocery bills, you might be surprised to learn that the IRA can also help you reduce your future energy use (and associated costs) by upgrading your home! With $370 billion dedicated to helping homeowners improve their home’s energy efficiency, here’s how you can take advantage of the savings from the IRA here in Virginia.
Why the Inflation Reduction Act Reduces Home Upgrade Costs
Why is it that home upgrades like insulation services, air sealing, HVAC improvements, and more are included in the Inflation Reduction Act rebates and incentives? Because upgrading the efficiency of homes across the country is better for the environment, and for the pocketbooks of homeowners. These upgrades, when widely adopted, can reduce the strain on the electrical grid, and greatly reduce our carbon footprint and greenhouse emissions. These incentives and rebates will be rolled out on both the federal and state levels.
Federal Inflation Reduction Act Tax Credits for Home Improvements
On the federal level of the IRA, you can take 30% of the cost from approved energy efficiency upgrades, and subtract it from what you owe in federal taxes. The following upgrades qualify for the 25C energy efficiency tax credit in 2023:
- Energy-efficient furnaces, boilers, and central AC
- Heat pumps and heat pump water heaters
- Insulation and air sealing
- Energy audits
- Electrical panel upgrades
- Energy-efficient exterior windows and doors
There are annual limits to the energy efficiency tax credit, and the limits vary by service.
Inflation Reduction Act Rebates in Virginia
On the state level, there are two different programs homeowners can take advantage of, depending on income qualifications. But keep in mind, there will be savings available to any homeowner looking to upgrade the efficiency of their home!
The HOMES Inflation Reduction Act rebates are yet to be implemented and will be done on a state-by-state basis. We do not yet know how the HOMES (Homeowner Managed Energy Savings) rebate program will be managed in Virginia, but we do know it will apply to the following:
- $4,000 towards home energy efficiency retrofits with modeled energy savings of 35% or more
- $2,000 towards home energy efficiency retrofits with modeled energy savings of 20-34% modeled energy savings
Eligible services can include insulation, air sealing, heat pump/HVAC upgrades, and more. Additional rebates up to $8,000 are available, depending on income qualification.
High-Efficiency Electric Home Rebate Program
For those that meet income qualifications, the High-Efficiency Electric Home Rebate program provides upgrade-specific rebates:
- Electric stoves/induction cooktops: $840
- Heat pump HVAC or mini split system: $8,000
- Insulation, air sealing, and ventilation: $1,600
- Electric wiring: $2,500
- Electrical panel upgrades: $4,000
- Heat pump water heater: $1,750
- Heat pump clothes dryer: $840
Take Advantage of Inflation Reduction Act Savings with Worley’s Home Services
Is your heating and cooling system on its last leg? Are energy bills starting to pile up? Are you looking for the right opportunity to improve the comfort and efficiency of your home? Worley’s Home Services can help with our comprehensive whole-home solutions and find the right rebates to save you money on your energy efficient home upgrades.