Status of IRA incentives

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The Inflation Reduction Act of 2022 takes a significant step to address climate change by lowering the costs for consumers to implement clean energy measures.  Many of the current benefits are in the form of income tax credits – that means that you need to owe taxes to access them and also need to have cash or loans to front the payments until you get reimbursed at tax time.  But rebates targeted to lower-income households without tax liabilities are being developed.

There’s a new website available to guide you through the various incentives currently available: https://www.energy.gov/save You’ll see that the credits and rebates are rolling out over time.  And you may want to complete your energy upgrades over several years as there is a maximum tax credit of $2000 for heat pump projects and $1200 for other improvements you can take each year.  In each case, the credit cannot exceed 30% of the total cost of the project. 

Rebates (in addition to the tax credits) for Energy Efficiency will become available in 2024.  Rebate levels have not yet been determined and there may be income eligibility requirements.  If you’re contemplating installing heat pumps, there’s an additional incentive you can access through the NYS Clean Heat program.  

Available now are federal and state tax credits for solar projects.  What’s different about IRA tax credits for solar, battery storage or geothermal heating is that you can carry forward unused tax credits to the next year – up to a total of 30% of the cost to purchase and install.

All these incentives can get complicated.  Not all installers participate in all incentive programs, be sure to ask.  Our Energy Advisors can help you figure out the right questions.  More information is available at Rewiring America.