Thanks to the Inflation Reduction Act, a new law I helped get signed into law last year, families are eligible for hundreds of dollars a year in energy savings. The Inflation Reduction Act also includes direct savings for households to make crucial, cost-saving energy efficiency improvements to their home.

To get the most out of these savings, households can take advantage of various tax credits and rebates to help make their homes more efficient, power their homes with clean energy, and lower the cost of purchasing electric and hybrid cars.

The Inflation Reduction Act makes household savings available to our constituents, including:

  • Up to 30 percent (generally capped at $1,200 per year) in tax credits for energy efficient home improvements, including heat pumps;
  • Rebates for residential efficiency retrofits, electrification projects including heat pumps, cooktops, and other appliances—as well as associated electrical upgrades;
  • Up to 30 percent in tax credits for rooftop solar, batteries, geothermal heat pumps, and other property; and
  • Up to $7,500 in tax credits for new clean vehicles, and up to $4,000 for used clean vehicles, depending on taxpayer income and other factors.

Low Income Home Energy Assistance Program (LIHEAP)

The Low Income Home Energy Assistance Program (LIHEAP) provides assistance to eligible low-income households with the goal of managing and meeting their immediate home heating and/or cooling needs.

Find the 2023 LIHEAP income eligibility requirements HERE.

Apply directly for LIHEAP benefits HERE.

Find more information and your local LIHEAP provider HERE.

Tax Credits for Residental Energy Efficiency Improvements

As a result of the Inflation Reduction Act, homeowners will have access to expanded tax credits for energy efficiency improvements, including certain onsite installation costs.

Learn more by visiting the Department of Energy's Savings Hub:

Homeowners can receive up to 30 percent back through tax credits for making energy efficiency improvements to their home – generally up to a maximum of $1,200 per year but potentially up to $3,200 if improvements include heat pumps, heat pump water heaters, or biomass stoves.

Find out more about what is eligible, and additional limits, below:

   What is Eligible? Maximum Credit for
Property Per Year 
 Windows, Doors, Skylights, and Insulation
Windows & Skylights  Energy Star Most Efficient
$600 across all windows and skylights
Doors Energy Star
$250 per door, $500 across all doors
Insulation  Most recent International Energy Conservation Code
as of two years prior
No property-specific limit 

HVAC Systems and Water Heaters
 Heat pump water heaters Consortium for Energy Efficiency (CEE)
highest tier below Advanced Tier

$2,000 total across heat pump water heaters, heat pumps, and biomass stoves. $1,200 annual limit does not apply
Heat pumps CEE highest tier below advanced tier
see above
 Biomass stoves or
hot water boilers
Thermal efficiency rating of at least 75 percent
see above
 Central air conditioners CEE highest tier below Advanced Tier  $600 per AC unit 
 Natural gas, propane, oil
water heaters
CEE highest tier below Advanced Tier  $600 per water heater 
 Natural gas, propane, or
oil furnaces or hot water
 CEE highest tier below Advanced Tier

Oil furnaces and hot water boilers can also
qualify if they meet 2021 Energy Star and
are rated by manufacturer for use with at least
20 percent biofuel blends
 $600 per furnace/boiler

Electric Panel (panelboard, sub-panelboard, branch circuit, or feeders)  Have a load capacity of at least 200 amps and are installed in connection with and enable the
installation/use of any other types of property
described under the earlier headings
$600 per property 
Home energy audits   Must be conducted by a certified home energy
$150 total 

Tax Credits for Residental Energy Property

Individuals can receive a tax credit of 30 percent of the cost of property for rooftop solar and other residential clean energy systems installed on their homes.

Eligible property includes:

  • Small wind
  • Residential solar and solar water heaters
  • Geothermal heat pumps
  • Battery storage
  • Fuel cells

Eligible expenditures include certain onsite installation costs. Solar expenditures include products such as solar shingles. For more information, see this IRS Q&A.

If an individual does not have sufficient tax liability to use up the entire credit amount during the year they install the property, they may carryforward any remaining credit to future tax years.

Additionally, individuals may see reduced pricing from community solar or solar leasing options, where the commercial entity takes the business credit for the property, rather than the individual.

Learn more by visiting the Department of Energy's Savings

Tax Credits for Electric Vehicles and EV Charging

New EVs: Individuals can receive up to a $7,500 tax credit to offset their current year tax liability for the purchase of an electric vehicle or plug-in hybrid vehicle, if the vehicle was assembled in North America.

Restrictions on the price of the car, your personal income, and the content of the car apply. Click HERE to find out which vehicles qualify and how to receive the tax credit.

Used EVs: Individuals can receive a tax credit of up to $4,000 for certain used electric vehicles and plug-in hybrids purchased through a dealership. The vehicle must be at least two years old, have a battery capacity of at least 7kW hours, and be sold by a participating dealer. Click HERE to learn more.

What about EV charging equipment? Individuals who live in a low-income census tract or do not live in an urban area are eligible for a 30 percent tax credit on the cost of charging or refueling equipment, up to a $1,000 credit.

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