The challenge facing heat pumps is the higher upfront costs relative to either a traditional heater or an air conditioner unit. While the Inflation Reduction Act does help with providing tax credits to reduce the higher upfront costs, adoption of this technology still depends on each individual household’s ability to access financing and understand the system’s lifetime operational savings.
Maximize the Inflation Reduction Act’s energy efficiency retrofit incentives
In addition to tax credits, the Inflation Reduction Act also contains income-based and performance-based rebates to further reduce the barriers of homeowners implementing energy efficiency retrofits, including purchasing a heat pump.
The High Efficiency Electric Home Rebate Act (HEEHRA) is an income-based incentive program. It offers low-income and medium-income households up to $14,000 per year in point-of-sale rebates on electrification projects, including $8,000 for heat pumps. “Point-of-sale” means the rebate amount is automatically deducted at the time of sale. Unlike tax credits, there is no need to submit any paperwork to receive the incentive.
The Home Owner Managing Energy Savings (HOMES) Rebate Program is a performance-based incentive program. It provides cash back for homeowners who can show quantifiable energy savings due to energy saving retrofits – the greater the savings, the greater the cash back. Homes with greater than 20% energy savings are eligible for a maximum rebate of $2,000, while those with greater than 35% energy savings are eligible for a maximum rebate of $4,000. Low-income households are eligible for double that amount.
Solarize your roof and electrify your commute
Corporations and government entities can leverage the renewable electricity tax credit, and as a consumer, you can too. For all renewable energy systems that you install, you can get 30% off the total cost through tax credits (including hardware and installation and permitting fees). And, unlike energy efficiency upgrades, there is no cap on how much you spend. Eligible technologies include systems like rooftop or ground-mounted solar PV, residential wind, or geothermal that produce electricity or heating, as well as energy storage (usually batteries paired with on-site generation).
You can also access a tax credit to swap out your gasoline car for an electric vehicle (EV). For eligible taxpayers, the Inflation Reduction Act extended the tax credit for buying and installing an EV charger (capped at 30%), as well as the tax credit for purchasing an EV (capped at $7,500 for new vehicles and $4,000 for used vehicles), but dependent on an EV MSRP eligibility limit or a taxpayer annual income eligibility limit. Starting in 2024, you may be able to claim a point-of-sale discount by transferring your tax credit directly to the dealership. Download our summary document to view a list of select EV-related incentives and their eligibility requirements.
We win when we all work together
At Enel North America, we believe that we win when we all work together. We have a dedicated public policy team that is actively tracking and advocating for clean energy technologies. And we have a mission to educate and raise awareness for our employees, partners, and community members – so that they too can make the most of the available decarbonization benefits.
To the organizations and businesses that we work with, we hope that you can pass on this information to support your employees and residents’ personal decarbonization efforts.
Reach out to us today to discuss the clean energy opportunities available to you and your organization – and how our integrated suite of on-site and off-site energy solutions can meet your organization’s specific energy requirements and sustainability goals.