Since it was signed into law in 2022, the Inflation Reduction Act (IRA) has been pushing the United States toward a cleaner and more secure energy future. But most homeowners have yet to take full advantage of the incentives available to them.
The Energy Efficient Home Improvement Credit, a key component of the Inflation Reduction Act, offers incredible savings for insulation, air sealing, heat pumps, heat pump water heaters, and more—all of which will reduce your energy usage and, potentially, save you money on your bills. If you haven’t claimed the credit yet, you could be leaving thousands of dollars on the table!
Energy Efficiency Is Central to Saving Energy & Reducing Carbon Emissions
The United States has an ambitious goal to achieve net-zero emissions by 2050 at the latest. Many actions will play a role in achieving this goal, and improving the efficiency of the built environment is one of the most important.
According to the National Renewable Energy Laboratories, buildings are responsible for 40% of all energy consumption in the United States and 35% of the nation’s carbon emissions. To cut those numbers, we need to ensure high energy efficiency standards are met in new construction projects, and we also need to make improvements to existing houses and buildings.
Huge Savings on Key Energy Efficiency Improvements
One of the easiest and most affordable ways to improve energy efficiency in an existing home or building is to upgrade its insulation and air sealing. Insulation and air sealing are high-impact upgrades that help reduce energy loss and reduce the need for heating and air conditioning.
Heating and cooling system upgrades are also key. Combustion heating systems, like furnaces, boilers, and gas water heaters, contribute to greenhouse gas emissions and don’t have a place in our all-electric future. Electric heat pump HVAC systems and heat pump water heaters are cleaner, more efficient, and better for the environment.
The new home improvement tax credit reduces the cost of these essential upgrades so more homeowners can improve their home’s, save energy, and contribute to a more sustainable future.
- Insulation & Air Sealing - Eligible for a 30% tax credit, up to $1,200
- Heat Pump HVAC Systems - Eligible for a 30% tax credit, up to $2,000
- Heat Pump Water Heaters - Eligible for a 30% tax credit, up to $2,000
Additional home improvements, including exterior doors, windows, and energy audits, are also eligible for the Inflation Reduction Act tax credit, and credit limits vary by service. You can claim an annual credit of $1,200 a year on qualified energy efficiency improvements and an additional $2,000 a year for qualified heat pump systems. There’s no lifetime limit to the credit and you can claim it multiple years in a row!
Find a Clean Energy Contractor Near You in California
A qualified clean energy contractor will make your home performance or electrification upgrade much easier and help you navigate the incentives landscape so you can maximize your tax credit. You can find a reputable contractor in your area with the Clean Energy Connection. We’re a non-profit that connects California homeowners with carefully vetted clean energy contractors. Our free online directory is the best place to search for insulation companies, heat pump installers, and more. You can filter by service, location, languages spoken, and more to find the perfect contractor for your home upgrade.