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Community and Q&A

Rebates and Credits on Heat Pumps, Solar, and Electric

shedworkshop | Posted in Energy Efficiency and Durability on

For the Americans on here, with the Inflation Reduction Act passing in the Senate and poised to pass in the House, how are you planning to take advantage of the rebates?

High Efficiency Electric Home Rebate Act

Available for residential houses up to 150% Median Income per

– Heat pumps up to $8,000
– Heat pump water heater up to $1,750
– Electric stove up to $850
– Electric clothes dryer up to $840
– Upgraded breaker box up to $4,000
– Upgraded electric wiring up to $2,500
– Insulation ,venting, sealing up to $1,600

Energy Efficient Home Improvement credit

Available to anyone.

– 30% tax deduction for insulation and breaker box upgrades up to $600 per measure
– 30% tax deduction for heat pump water heater or heating/cooling up to $2000

Residential Clean Energy credit

Available to anyone.

– 30% tax deduction for solar panels, installation, and battery storage systems

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  1. steve41 | | #1

    It looks like our delays/procrastination may work out. We have signed on to buy community solar farm shares for a 2023 install. Our roof orientation is not the most favorable for solar so CSF makes the most sense for us. I was expecting a 22% tax credit for 2023, but the bump to 30% will be a nice savings.

    We also have a heat pump install planned for late 2022, so I need to sort through the timing / retroactivity of the new Act. The $8K potential credit is huge and could help us to fund other energy efficiency pursuits.

    Also, potentially on the docket for us within the next 1-3 years: an induction stove and heat pump dryer. There are other credits that I'll explore as well, but need to understand the requirements first.

    I believe there are some combined maximum credit thresholds though I don't have a handle on the details. Maybe someone that does could elaborate. A nice excel matrix would be handy.

  2. mtsolar | | #2

    Has anyone seen the language that explains the heat pump requirements for Inflation Reduction Act tax credits? Hoping it will include air-to-water heat pumps that do not have SEER or HSPF ratings but otherwise are equally efficient at heating and cooling as mini-splits?

    1. rayt_817 | | #3

      I believe they are just amending the current law (IRC 25c) to allow for a higher credit.

  3. mtsolar | | #4

    Thanks for that link! Relevant text for heat pumps is shown below and it seems quite outdated and a bit vague. So it will interesting to see if we can get any more info.

    an electric heat pump which achieves the highest efficiency tier established by the Consortium for Energy Efficiency, as in effect on January 1, 2009,

  4. user-7586775 | | #5

    Does anyone know if the 150% income limit includes deductions like adjusted gross income (AGI)? or is it gross income?

    1. shedworkshop | | #6

      For the new electric vehicle credit (I forgot to mention it in my post), modified adjusted gross income, or MAGI, must be below $150,000 for single and $300,000 for joint returns. For the used credit, MAGI must be below $75,000 for single and $150,000 for joint returns.

      Unfortunately, all I see is "50 percent of the cost of the qualified electrification project for a household the annual income of which is not less than 80 percent and not greater than 150 percent of the area median income" in the text for the High Efficiency Electric Home Rebate program.

  5. utah_matt | | #7

    Anyone figure out if the rebates are replacing existing equipment or building a new home? The foundation is being dug out this week. I might be able to work through the timing on purchases of inductive stove, heat pump, water heater, etc to get all those rebates.

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