2023 Inflation Reduction Act: Helping Utah Homeowners Save
As one of the top HVAC companies in Utah, Alta Air understands the importance of energy-efficient heating and cooling systems. We also recognize the financial challenges many homeowners face in reducing their energy bills. That’s why we’re excited to explain how the 2023 Inflation Reduction Act (IRA) can help Utah homeowners take advantage of AC and heat pump rebates, and tax credits for upgrading to energy-efficient heating and cooling systems.
What Is The 2023 Inflation Reduction Act?
Signed into law in August 2022, the $740 billion IRA is a comprehensive climate and healthcare legislation aimed at limiting inflation by reducing the deficit and addressing some of the United States’ most pressing issues. The bill includes clean energy tax credits and incentives that homeowners can benefit from when making green upgrades, such as energy-efficient windows, doors, water heaters, furnaces, and heating and cooling systems.
How Do Rebates/Tax Credits Open Doors For Homeowners?
The IRA’s primary objective is encouraging businesses to become more eco-friendly and take clean energy production seriously. However, there are benefits for individual Americans in the bill as well. Homeowners can reduce their tax bill through rebates, like heat pump and AC rebates, and tax credits for energy-efficient upgrades, subject to their own tax credit for up to 30% of the total cost. Here are some examples:
- Insulation: Tax credit cap set at $1,200
- Heat pumps: Tax credits can go up to $2,000
- New windows, water heaters, and natural gas furnaces: Cap of $600
Homeowners should start by consulting a professional for a home energy audit to determine their easiest potential upgrades with the greatest return on investment. While it may not be financially feasible to do all upgrades at once, almost all of the incentives will be around for another 10 years, making it more financially sensible to do them one at a time.
Benefits of Energy-Efficient Upgrades
The benefits of energy-efficient upgrades go beyond reducing energy bills. By transitioning to renewable energy and efficient homes, households can protect themselves against energy price spikes and hedge against inflation. International markets for oil and natural gas have seen severe volatility over the past year, causing the price of gasoline to spike to near-record levels. Switching to a heat pump alone could save a household from $500 to $1,000 per year in heating and cooling costs, on average.
Conclusion
The 2023 Inflation Reduction Act offers significant opportunities for Utah homeowners to save on heating and cooling costs by upgrading to energy-efficient systems. At Alta Air, we are committed to helping homeowners take advantage of these benefits by providing expert advice, professional installation services, and financing options. Contact us today to learn how we can help you reduce energy bills and protect your household against energy price spikes and inflation.
Take a look at the chart below for a more detailed breakdown of the tax credits and rebates available to you:
| Energy Efficiency Home Improvement Credit | High-Efficiency Electric Home Rebate Act (HEEHRA) | HOMES Rebate Program | |
|---|---|---|---|
| Qualifications | Must owe taxes and purchase qualifying energy-efficiency appliances to be eligible. | Must purchase qualifying energy-efficiency improvements to be eligible. You can receive a maximum of $14,000 in instant rebates. | Must cut your energy usage by at least 20% to be eligible. |
| Low-Income Households (Less than 80% of the area’s median income) |
Receive a maximum of $1,200 in tax credits, equaling approximately 30% of your energy-efficiency improvement costs up to :
|
Receive an instant rebate for 100% of project costs up to:
|
|
| Mid-Income Households (Between 80% & 150% of the area's median income) |
Receive a maximum of $1,200 in tax credits, equaling approximately 30% of your energy-efficiency improvement costs up to :
|
Receive an instant rebate for 50% of project costs, up to:
|
Receive an instant rebate of up to:
|
| High-Income Households (Over 150% of the area’s median income) |
Receive a maximum of $1,200 in tax credits, equaling approximately 30% of your energy-efficiency improvement costs up to :
|
Not eligible |
Receive an instant rebate of up to:
|
