The Escalation Depletion Act of 2022, passed by the U.S. Congress this year and signed by President Biden, aims to reduce costs and carbon emission rates and increase investment in sustainable energy assets. The key aspect of this law is that it aims to make the opportunity to make their home greener more affordable for homeowners through tax breaks and credits.

These incentives are designed to help individuals offset the costs of increasing energy-efficient home renovations and clean energy systems, which could save consumers thousands and support sustainability efforts. The law is a step in the right direction to address climate change and move to new and more environmentally friendly ways of living and using energy in the United States.

Modernization loans now offer greater benefits for energy efficiency

One of them is the Energy Efficient Home Improvements Credit, which was previously included in the Non-Corporate Energy Property Credit section under the Inflation Reduction Act. This credit is equal to 30% of the expenditure on qualified energy efficiency improvements such as home insulation, energy efficient windows and doors, efficient heating/cooling clothing, etc.

There is also the Home Energy Audit Credit, where the homeowner receives a list of recommendations on how to make their home more efficient. There are major credits for specific items for each year and their value is: $600 for exterior windows and skylights, $2000 for heat pumps and water heaters, and $150 for energy audits.

It was extended until the end of 2032. This gives homeowners enough time to make the necessary improvements to increase the energy efficiency of their homes.

The extension of clean energy loans offers new opportunities for homeowners

The residential program was called the Residential Energy Efficient Property Credit. It was also extended through 2034 and expanded upon by new legislation such as the Residential Clean Energy Credit. This program allows homeowners to claim a tax credit of up to 30% of the total system cost for installing solar, wind, geothermal, biomass or fuel cell systems to generate electricity and provide hot water or heat to homes.

At the start 2023, Battery storage technology also deserves recognition with at least 3 kilowatt hours of electricity. The share remains at 30% if the installation takes place between 2022 and 2032, but drops to 26% in 2033 and 22% in 2034. This long-term extension gives the upstart security when committing to clean energy systems for the residents of their homes.

Two rebate programs offer up to $10,500 for energy upgrades

Also of particular note are two rebates designed to help people continue to live energy efficiently in their homes, especially those on low incomes, in addition to other financial benefits enshrined in the Inflation Reduction Act. The HOMES rebate program is designed to encourage homeowners to make changes that minimize energy use.

Citizens who own their own home can receive up to $8,000 in tax credits that depend on the energy performance certificate rate and their income. The rebates for high-efficiency electrical household appliances offer rebates to low- and middle-income families to make it easier for them to purchase efficient electrical household appliances.

If you upgrade an electric stove, heat pump, water heater, or heat pump for space heating or cooling, you can apply for a refund. You can receive a maximum of $10,500 per household.

New energy rebates: Wisconsin leads the way, other states will follow

Finally, the tax credits and rebates provided by the Inflation Reduction Act offer homeowners the opportunity to make valuable energy and efficiency improvements to their homes while saving money. Wisconsin is the first state to implement the Home Energy Rebate program, offering eligible individuals up to $10,000.

Nine other states are developing similar laws to those in Kentucky, California, New York and Washington. They also have a positive impact on individual homeowners, as residents save on utility bills and see their property values ​​increase as a result of improvements. These programs are also consistent with energy goals to address and reduce carbon emissions in the long term.

As these green programs are implemented nationwide, Homeowners are strongly encouraged to consider whether they qualify for and can benefit from these significant financial incentives to make their homes greener and more energy efficient.