Democrats passed the big climate bill, the Inflation Reduction Act (IRA), by a 51-50 vote in the US Senate on Sunday. President Joe Biden, who is expected to be passed by the House of Representatives this week, said he would sign it as soon as it was on his desk. Here’s how an IRA can help homeowners achieve energy efficiency and cut their energy bills.
IRAs include rebates and tax credits for homeowners who replace oil or gas-fired stoves, boilers, water heaters, and stoves with high-efficiency appliances.
Electrification nonprofit Rewiring America wrote in its Aug. 5 briefing “IRA Benefits for Vulnerable Communities”:
A home with a high-efficiency electric heat pump for space heating and cooling, heat pump water heaters, an electric car, and solar panels could save $1,800 a year today.
These savings will be reflected in lower monthly electricity bills, less bill volatility, and reduced disproportionate energy burdens in disadvantaged communities. It is important to note that these savings add up to such a large amount that if a household spends on appliances saved on their energy bill, these savings increase to over $30,000 in 10 years and $140,000 in 25 years.
The $4.28 billion IRA Efficient Electric Home Rebate Program will provide up to $8,000 in upfront rebates to install a heat pump that can heat and cool a home. It also offers discounts of up to $1,750 on heat pump water heaters. (Editor’s note: We just installed an air-fueled heat pump water heater in our home. Running costs are only $108 a year.)
There are also discounts of up to $840 to offset the cost of a heat pump dryer or electric stove, including induction.
If a home needs to upgrade an electrical panel to support a new device, rebates of up to $4,000 are available to do so. There are also discounts up to $2,500 on wire upgrades.
Save up to $1,600 on one of the most cost effective and fastest ways to make your home more energy efficient – insulating and sealing.
The IRA provides tax credits of up to $2,000 to ineligible homeowners who install heat pumps and up to $1,200 per year for installing induction hobs or new energy-efficient windows and doors.
Homeowners can receive up to $14,000 in total in rebate. To be eligible, a household’s income cannot exceed 150% of the area’s median income as calculated by the Department of Housing and Urban Development. (Here’s a handy regional Fannie Mae median income finder tool to see what your cap is.) Judging by the bill itself, the rebates and tax credits go into effect after December 31, 2022.
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Michelle Lewis is a writer and editor for Electrek and an editor for DroneDJ, 9to5Mac and 9to5Google. She lives at the White River Crossing in Vermont. She previously worked for Fast Company, The Guardian, News Deeply, Time and more. Send Michelle a message on Twitter or Michelle@9to5mac.com. Check out her personal blog.