How much the Inflation Reduction Act’s clean energy incentives will save homeowners on upgrades

ronstik // Shutterstock As the weather gets colder and homeowners turn on the heat, conserving energy and cutting utility costs is top of mind for many people. But while retrofitting your home with the most energy-efficient appliances may seem like an expensive investment, a new program from the Biden administration will curb the cost for many homeowners who decide to take the plunge. The Inflation Reduction Act, passed in August 2022, offers rebates and tax incentives for homeowners who upgrade their homes to reduce carbon emissions. Homes generate about 20% of greenhouse gas emissions in the United States, though that figure varies by state. The High-Efficiency Electric Home Rebate Act (HEEHRA) is the first federal program implemented to combat climate change, which will lower home energy costs, create healthier indoor air quality, and reduce carbon emissions. “State and local and utilities have offered rebates, and yes, they absolutely work,” said Ben Evans, Federal Legislative Director at the U.S. Green Building Council, whose group lobbied for many of the policies included in the bill. “The problem is they’re sporadic. This is in place for 10 years; this is a long-term policy that’s going to change the market.” The voluntary HEEHRA program will cover 100% of electrification project costs up to $14,000 for low-income households and 50% of costs for moderate-income households, including purchase and installation expenses. In the long run, these retrofits could save Americans $37 billion a year on energy bills, according to an analysis from the clean-energy nonprofit Rocky Mountain Institute. Besides reducing carbon emissions and increasing savings, better health is another benefit of clean energy upgrades. Sealing homes can reduce the presence of disease-carrying pests like rats and cockroaches, while converting appliances from gas to electric will reduce nitrogen dioxide emissions. “Burning of the flame generates fine particles like an automobile engine does,” said David Turcotte, a research professor at the University of Massachusetts Lowell who specializes in sustainable housing. “That can worsen respiratory conditions.” Angi calculated how much homeowners can save by implementing home upgrades outlined in the Inflation Reduction Act. Savings were determined by comparing the maximum rebate and the typical cost of each upgrade per Angi’s cost data. This analysis does not account for future savings homeowners may attain on their energy bills. Read on to learn more about how much the Inflation Reduction Act’s clean energy incentives could save homeowners on sustainable upgrades. Electrical wiring Canva – Maximum rebate: $2,500 — Typical project cost: $4,000-$8,000 — Average savings: 31%-63% One of the most expensive upgrades on the list is rewiring a home. Old or faulty wiring can cause electrical fires, so it’s worth looking behind the walls for potential issues, especially if a home is on the older side. Many old homes are also not equipped to handle the modern demands of our connected lives. The amount of electricity people–and even energy-efficient appliances–consume today need robust wiring systems. Homeowners who upgrade their electrical wiring in 2023 can claim a $600 tax credit under the Energy Efficient Home Improvement Credit. Weatherization: Insulation, air sealing, and ventilation