Last year, more than 45,000 families in Tennessee saved a total of $63.9 million in federal tax credits by improving the energy efficiency of their homes or installing clean energy sources such as solar power.

The tax credits were funded by the Inflation Reduction Act of 2022. According to Internal Revenue Service (IRS) data for 2023 tax returns filed and processed by May 23 of this year, more than 3.4 million households nationwide received tax credits totaling $8.4 billion.

This is part of a series of initiatives in the federal Inflation Control Act designed to help American households save on energy costs and reduce their carbon emissions. Other programs, including a multibillion-dollar residential energy rebate program, have yet to be rolled out in most parts of the country.

These initiatives come at a time when record-breaking heat is driving up Americans’ electricity bills. In Tennessee and neighboring states, the estimated cost of cooling homes during the summer months rose from $695 per household in 2023 to an estimated $774 this year, according to a report released in June by the National Energy Assistance Directors Association and the Center for Energy Poverty and Climate.

The tax credits came in two forms.

Nationally, taxpayers have claimed over $6 billion in residential clean energy tax credits for investments in solar power generation, solar water heating, and battery storage. The residential clean energy tax credit is available to primary occupants of a home who install new clean energy equipment between 2022 and 2032, including solar power panels, wind turbines, solar water heaters, geothermal heat pumps, and fuel cell or battery storage technology.

Taxpayers claimed another $2 billion for energy-efficient home improvements, including insulation, windows and doors, heat pumps and efficient air conditioning. According to the IRS, taxpayers may be eligible for energy efficiency tax credits if they make certain improvements to their homes (primary residences only) between January 1, 2023, and January 1, 2033.

About 9,700 Tennessee taxpayers received nearly $30.3 million in clean energy tax credits—an average of $3,110 per family. Another $33.7 million in energy efficiency improvement tax credits were awarded on 37,320 tax returns—an average of $902 per return.