Inflation Reduction Act 2022: Benefits For Homeowners
This is the second post in a 3-part blog series breaking down what you need to know about the Inflation Reduction Act (IRA). In today’s post, we’ll discuss the new and renewed incentives with the IRA. Read our previous post about Electric Vehicle Credits!
Home solar power systems just got way cheaper
If you liked the sound of the 26% Federal Solar Tax Credit, you’re going to love the 30% Federal Solar Tax Credit! Beginning retroactively from the start of 2022, the IRA is reinstating the old 30% rate, for what is now known as the Clean Energy Credit, until the end of 2032. This 30% rate means a $20,000 solar panel system gets a federal tax credit of $6,000, instead of $5,200 under the previous 26% rate. To give you an idea of how much this is likely to save you, Energy Sage estimates Minnesota’s average residential solar panel installations range from $14,662 to $19,838. In 2033, the tax credit will go back to 26% again and in 2034 it will drop again to 22% before expiring at the end of the year.
Home energy systems still qualify without solar
Not only was the Clean Energy Credit extended, but you can also now claim it on renewable energy systems like storage! Before the IRA was passed, energy storage systems only fell within the federal tax credit if they were attached to some kind of solar power system. Now, you can get a stand-alone energy storage system and still qualify for the credit. So, even if you’re not quite ready to go full solar, you can still score a tax credit for 30% of the costs to install a battery over 3 kWh before the end of 2032. As well being a great (and probably quieter!) alternative to an emergency generator, this makes you less reliant on the grid – particularly during a record heat wave when all of Minnesota decides to turn on their AC at once! Want to find out more? At Cedar Creek Energy we know all about batteries and have some great partners specializing in energy storage systems we’d love to introduce you to! We can also talk you through the potential savings of energy storage and solar energy combined, post-IRA!
More incentives for Energy Efficient Homes
The Energy Efficient Home Improvement credit is back, and it’s more powerful than ever! The IRA reinstates this credit until the end of 2032 and increases the maximum tax credit amount to 30% of the cost of all qualifying energy efficiency improvements. There are also rebate programs that will pay you cash to make your home more energy efficient:
1. The High-Efficiency Electric Home Rebate Program
This program encourages people to upgrade old household appliances for more energy efficient ones, covering a maximum of $14,000. Many of the applicable appliances like heat pumps are usually cheaper to run. Electric appliances like these can also be fully powered by renewable energy – yet another reason to go solar!
2. The Homeowner Managing Energy Savings (HOMES) rebate program
This program pays homeowners who cut their home energy use through efficiency retrofits, such as insulation or air sealing. You can claim up to 50% of the cost of those projects, with a dollar cap.
All this is a lot to digest, right? Do you still have questions about how much money you can save by going solar now the IRA has become law? If so, get in touch with Cedar Creek Energy today and we’d be happy to talk you through the options and savings available now the IRA has been passed!