Tax Credits & Rebates
Passed in 2022, the Inflation Reduction Act provides significant tax credits and rebates for energy efficiency upgrades for your home and/or the purchase of a new or used electric vehicle.
Tax credits are claimed when you file your federal income tax return; tax credits are deducted, dollar for dollar, from the income taxes you owe. States will be administering the rebate programs created by the Inflation Reduction Act and are expected to begin rolling those out later in 2024. These later rebates will be largely directed to lower-income residents. Hopefully our experience in publicizing and promoting the current first phase of IRA benefits will help to streamline the second phase.
For more detail, download this PDF, which details the tax credits and rebates available to U.S. consumers in the Inflation Reduction Act. These programs can save you thousands per year depending on the project and are an excellent way to help make your home more energy efficient.
For more expensive items, especially those which greatly reduce your energy usage (e.g. heat pump heating & cooling, heat pump water heater), consider one of the low interest loans available to qualified Shaker residents.
In the end, there should be a program for everyone including income-qualified programs from the utilities and local organizations such as the Cleveland Housing Network (which administers the FirstEnergy Community Connections program). There may also be a combination of rebates and incentives, as the Dominion Energy program is offering through 2024, that could reduce costs by a third or more. As with any program that entails tax credits and income guidelines, familiarize yourself with the official websites (such as the White House’s Inflation Reduction Act Guidebook) and consult a tax professional if you have questions.
Benefits for Renters, Too
Many of the IRA tax credits available to home owners are also available to renters. Examples include a portable window-mounted heat pump, a heat pump water heater, stove top cooking, and Electric Vehicles. Click on Renters (at the top of this web page) and also download “Electrify Everything: Renter Checklist” for more information.
Projects That Qualify
Learn more about specific energy efficiency upgrades that qualify for tax credits and rebates in the Inflation Reduction Act by selecting a topic below. Where available, we have also included information about other local incentive programs, like rebates from utility companies. Remember that most rebates do not go into effect until individual states set up rules and infrastructure. Also remember that tax credits renew annually. And finally, be sure your contractor is registered with Shaker’s Building Department before beginning work.
An energy audit is a great first step when it comes to making energy efficiency upgrades to your home. That's because the audit will show you what improvements your home needs -- and what will get you the most bang for your buck so to speak.
The good news: Under the Inflation Reduction Act, you can claim up to $150 tax credit on your federal return for an energy audit. Click here to learn how to set up an energy audit and what to expect.
Reducing the amount of air that leaks in and out of your home is a cost-effective way to cut heating and cooling costs, improve durability, increase comfort, and create a healthier indoor environment. Caulking and weatherstripping are two simple and effective air-sealing techniques that offer quick returns on investment, often one year or less. Caulk is generally used for cracks and openings between stationary house components such as around door and window frames, and weatherstripping is used to seal components that move, such as doors and operable windows. Learn about air sealing at Energy.gov.
Inflation Reduction Act Incentives for Insulation & Air Sealing
If you add insulation or install eligible energy efficient windows or doors, you can:
- Claim a 30 percent federal tax credit (up to $1,200 maximum per year)
- Claim a HOME Rebate Program rebate (when available) of between $2,000 and $8,000 depending on your income.
What is a heat pump Dryer?
A heat pump dryer uses a refrigerant to move heat from the air inside the dryer to the outside air. This makes it more energy efficient than a traditional dryer, which uses heat coils to dry clothes.
Here's how it works:
- The dryer draws in cool air from the room.
- The air is heated by a refrigerant.
- The warm, moist air is then circulated through the drum, where it dries the clothes.
- The warm, moist air is then exhausted to the outside.
Heat pump dryers can save you up to 50 percent on your energy costs. They are also better for the environment because they produce less greenhouse gas emissions than traditional dryers.
Here are some of the benefits of using a heat pump dryer:
- Energy efficient: Heat pump dryers use up to 50% less energy than traditional dryers.
- Cost-saving: Heat pump dryers can save you money on your energy bills.
- Environmentally friendly: Heat pump dryers produce less greenhouse gas emissions than traditional dryers.
- Gentle on clothes: Heat pump dryers dry clothes at lower temperatures, which helps to protect them from damage.
- Quiet: Heat pump dryers are quieter than traditional dryers.
Electric heat pump clothes dryers are more efficient than conventional electric dryers and gas dryers, helping families save money on each load of laundry. The Inflation Reduction Act provides rebates that can cover up to 100 percent of the costs of purchasing and installing a new electric heat pump clothes dryer, depending on household eligibility.
Households can access a tax credit to cover up to 30 percent of the costs for certain efficiency improvements.
Families can claim up to $1,200 in credit each year for adding insulation or installing efficient windows and doors, with a special credit of as much as $2,000 for electric heat pumps that provide super-efficient heating and cooling.
All households can access rebates of up to $4,000, while low- income households could receive up to $8,000 for home efficiency.
Low- and moderate-income households can access rebates covering up to 100% of the costs of installing electric appliances like heat pump water heaters and clothes dryers.
What is a Heat pump water heater?
A heat pump water heater uses electricity to move heat from the surrounding air to heat water. It works like a refrigerator in reverse. The heat pump pulls heat from the air and uses it to heat water in a storage tank. This makes heat pump water heaters much more efficient than traditional electric water heaters, which use electricity to directly heat water.
Heat pump water heaters can save you up to 50% on your water heating costs. They are also better for the environment because they produce less greenhouse gas emissions than traditional electric water heaters.
Households can receive a tax credit to cover 30% of installation costs for rooftop solar. This credit applies to solar systems that are paired with battery storage as well as standalone battery storage installed without solar.
When filing your taxes submit Form 5695 through the IRS for a 30% federal tax credit for solar systems installed from the beginning of 2022 through 2032. The credit decreases to 26% in 2033 and 22% in 2034. Unless it's renewed, the credit expires in 2035.
Office of Energy Efficiency & Renewable Energy Learn more about how to install solar on your home and access other solarr resources.
A 3% interest rate reduction on loans for energy efficiency and renewable energy home upgrades, including solar systems.
A program where excess energy generated from your solar system is sold back to the utility company for credits on your next electricity bill. Check with your local utility company for net metering details.
Qualified Energy Property Tax Exemption Owners or lessees of renewable clean energy projects, like solar systems, may qualify for property tax exemptions. Qualified Energy Projects are exempt from taxation if the project meets exemption requirements.
Cuyahoga 2023 Solar Co-op - Join the Solar United Neighbors Cuyahoga Solar Co-op, learn about rooftop solar, add solar to your home, and give the gift of solar. For every home that goes solar through the co-op, we will contribute $300 to a Habitat for Humanity solar array.
Feel Good Benefits
- Be the Change: You are the one who can make a difference. You are the one who can create a more just and equitable world. You are the one who can build a better future for all.
- Home Value: Per Zillow, nationally, homes with solar-energy systems sold for 4.1% more on average than comparable homeswithout solar power. For the median-valued home, that translates to an additional $9,274
- Shaker Heights: Contrary to popular belief, it is not difficult to get solar approved by the Shaker Heights Building Department. We are here to help you make the transition to solar energy as easy as possible. Click here to learn more.
Check out your roof potential and potential savings with Project Sunroof by Google