How the Inflation Reduction Act Allows for Energy-Efficient Upgrades

The cost of living and groceries isn’t the only thing increasing; so is the price of many energy-efficient appliances. In response, many homeowners just go through the motions with the same outdated appliances, continuously spending money on repairs. Now, for many U.S. homeowners, that’s about to change.

The Inflation Reduction Act of 2022 is a multifaceted piece of legislation that aims to make some home improvements affordable. In this blog post, homeowners can learn more about this law and how it allows for new, affordable, energy-efficient upgrades, including heating and cooling systems.

The Inflation Reduction Act is Multiple Things in One

Per the U.S. Senate, the Inflation Reduction Act intends to invest nearly $370 billion in healthcare, environmental, and financial endeavors. The legislation hopes to:

• Reduce carbon emissions by 40 percent by 2030
• Fight Inflation
• Make prescriptions more affordable for seniors on Medicare
• Tax large corporations

One crucial part of the act for homeowners is the tax credits and rebates offered on new energy-efficient home improvements, including air conditioners, heaters, and heat pumps. It also won’t impose new taxes on households making less than $400,000 annually. The benefits someone qualifies for can depend on where they live, how much they make, and how many people live in their household.

What Qualifies for the Inflation Reduction Act’s Benefits?

The Inflation Reduction Act is aimed at low-income and middle-income families. Consumer Reports notes that if a household earns more than 150 percent of its area median income, it won’t qualify for tax credits and rebates for new appliance installation.

Here’s what to know about what HVAC systems qualify:

• Homeowners can get up to $2,000 in tax credits for installing energy-efficient heat pumps and up to $600 for gas furnaces and air conditioners.
• These upgrades must take place starting in 2023. For instance, a homeowner can’t get a tax credit on a new heat pump they installed at the end of 2022.

EnergyStar produces many energy-efficient appliances that qualify for tax credits and rebates under the Inflation Reduction Act. Take its air-source heat pump, for instance. These appliances qualify for 30% of the project cost up to $2,000 in federal tax credits. Installation must occur between January 1, 2023, and December 31, 2032.

Benefits of Upgrading

The Inflation Reduction Act makes it much more affordable for homeowners to make energy-efficient home improvements, but the benefits don’t stop there. The energy efficiency requirements for heating and cooling systems to qualify for the tax credits and rebates lead to additional benefits.

With the Inflation Reduction Act, not only can homeowners take advantage of tax credits and rebates, but they can also look forward to saving money on energy bills. That's because they'll benefit from significantly improved efficiency with a new energy-efficient HVAC system or heat pump. The latest technologies also allow for superior temperature control and improved air quality, making the home even more comfortable.

About Great Day Plumbing & Air

Great Day Plumbing & Air is the local and trusted plumbing, AC, and heating experts serving Wilmington, NC, and the surrounding areas. They provide upfront pricing, same-day services, and a beneficial maintenance plan. Call them today for AC, heater, or heat pump installation in Wilmington, NC.

Contact Information:

Great Day Plumbing & Air

14685 HWY 17
Hampstead, NC 28443
United States

Matt Hord
(910) 941-0080
https://www.callgreatday.com/