Rebates and incentives make clean energy and energy efficiency home improvements more affordable for California homeowners. There are a number of state and local incentives available in California, and California homeowners also qualify for federal incentives through the Inflation Reduction Act of 2022 (IRA).
Inflation Reduction Act Tax Credits
There are two tax credits available through the Inflation Reduction Act: the solar tax credit and the energy efficiency home improvement tax credit.
The Inflation Reduction Act Solar Tax Credit
Installing a home solar system is one of the best ways to reduce your carbon footprint and save money on your energy bills. If you’re thinking about going solar, the Inflation Reduction Act solar panel tax credit can make your installation more affordable.
The credit is worth 30% of your total solar installation costs—if you spend $15,000 on your solar installation, you can reduce your federal tax liability by $4,500! It will be available from 2022 until 2032 and covers all types of solar installations, including rooftop solar, off-grid solar, and solar battery storage.
The Inflation Reduction Act Energy Efficiency Tax Credit
Starting in 2023, homeowners will be able to claim a 30% tax credit (with annual limits that vary by service) on qualifying energy efficiency home improvements, including:
- Heat pumps and mini splits
- Heat pump water heaters
- Energy audits
- Energy efficient windows and doors
- Insulation and air sealing
- Electrical panel upgrades
- Energy efficient HVAC upgrades
Upgrades like these save energy, which reduces fossil fuel consumption and saves you money. Making energy efficient home improvements can also help you prepare for a home solar installation—the less energy you use, the fewer solar panels your home will need.
Inflation Reduction Act Rebates
The Inflation Reduction Act created two new rebate programs: the High-Efficiency Electric Home Rebate Program and the HOMES (Home Owner Managing Energy Savings) Rebate Program. Both offer thousands of dollars in rebates for a wide range of home electrification and energy-saving upgrades. To qualify for HOMES rebates, your project must include modeled energy-savings of at least 20%, while the High-Efficiency Electric Home Rebate Program is only available to low and moderate-income households.
These rebates are not yet available—the Department of Energy expects to deliver funding to individual states by the spring of 2023. Once California receives its funding, the CA Department of Energy will be responsible for managing and distributing funds. We will continue to provide updates as more information becomes available about IRA rebates.
California Utility Incentives for Energy Efficiency Upgrades
Many California utility companies, including SMUD, PG&E, and SCE, offer rebates and incentives for certain energy efficiency upgrades. Depending on your utility, you could qualify for heat pump rebates, energy efficient appliance rebates, thermostat rebates, heating and cooling rebates, solar battery rebates, and more.
To qualify for most utility rebates, including SMUD rebates, your project must be completed by a qualified contractor. So how can you find a local company who not only specializes in green home services but can help you navigate the many available incentives?
Use the Clean Energy Connection to Find a Contractor
The Clean Energy Connection makes it easy to find a qualifying contractor that can help you maximize your rebates, tax credits, and other incentives! Our free online directory connects homeowners with vetted, experienced, and highly rated clean energy contractors in California. It’s easy to use and can be filtered by location, services, incentives, and more so you can find the right contractor to help electrify your home and make it better for the environment. Just visit the directory and refine your search based on the services and incentives you’re interested in. You’ll be directed to a list of local contractors that can help you qualify. It’s that simple!
Save on clean energy upgrades with tax credits and incentives.