Planning to renovate your home? Waiting a few months to begin your project might save you thousands of dollars.
The Inflation Reduction Act, a federal law passed in 2022, includes both rebates and that can help defray the cost of some “green” projects. Many of the tax credits are available now, but the rebates will not kick in for a few more months. So, waiting to start projects that qualify for the rebates could save you cash.
The rebates could save homeowners “hundreds of dollars for single items such as an electric cooktop or dryer to $8,000 for a heat pump or cutting home energy use by 35% or more,” according to The Wall Street Journal.
The precise moment these rebates will kick in is unknown because they will be administered at the state level. In coming weeks and months, individual states will begin to roll out details based on guidelines issued by the U.S. Department of Energy in July, the Journal reports.
Your income level may determine whether you are eligible for rebates, and how big your rebate will be. According to the Department of Energy:
“For households with a total annual income below 80% of the area median income (AMI), rebates can cover a higher percentage of the total project costs.”
In terms of home-efficiency projects, the Department of Energy mentions eligible renovations as those that result in at least 20% or at least 35% predicted energy savings.
Home electrification and appliance rebates are more narrowly targeted to low- or moderate-income households. These rebates also are available to those who own multifamily homes serving low- or moderate-income households.
The Department of Energy defines low- or moderate-income households as those “where an individual or family has a total annual income less than 150% of the median income of the area in which the individual or family resides.” For example, if the median income in your area is $70,000, you might qualify for an electrification or appliance rebate if your total annual income is less than $105,000 (150% of $70,000).
Some of the home electrification projects mentioned on the department’s website, and the associated rebate value, include:
- Energy Star electric heat pump water heater — up to $1,750
- Energy Star electric heat pump for space heating & cooling — up to $8,000
- Energy Star electric heat pump clothes dryer — up to $840
- Energy Star electric stove, cooktop, range, or oven — up to $840
- Electric load service center — up to $4,000
- Electric wiring — up to $2,500
- Insulation, air sealing, and ventilation — up to $1,600
If you already have started a home efficiency project — or if you plan to do so before the rebates become official — do not expect to be able to cash in at a later date. According to the Department of Energy:
“The Inflation Reduction Act authorizes states to provide rebates for Home Efficiency Rebates begun on or after enactment of the law on August 16, 2022. Given the requirement that states must establish programs that ensure compliance with the law (e.g., eligibility of household, technology, program reporting), it will be difficult to offer rebates for projects completed before program requirements are fully defined and programs are operational.”
Meanwhile, the Inflation Reduction Act “does not authorize States to offer Home Electrification and Appliance Rebates retroactively,” the department says
You can learn more about the rebates — and how much money you can save — on the Department of Energy’s “Home Energy Rebates Frequently Asked Questions” page