Improve Home Efficiency with Inflation Reduction Act Rebates

The new legislation expected to be signed into law provides $9 billion in total home-energy rebates. Perhaps the most notable provision is the $4.28 billion High-Efficiency Electric Home Rebate Program that gives a rebate of up to $8000 for installing high-efficiency heat pumps and a rebate up to $1750 for installing a heat-pump water heater.

Homeowners can also apply for up to $840 to offset the cost of a heat-pump clothes dryer or a high-efficiency induction range. Obviously, many homes will need electrical upgrades to take advantage of the rebates and the Act offers up to a $4000 rebate toward electrical service and panel upgrades. There’s also money (up to $2500) for wiring upgrades for heating and cooling equipment and appliances, and for electrical-vehicle charging. Homeowners can also apply for up to $1600 for air-sealing and insulation improvements.

A bright spot for solar too

The legislation continues the current 30% tax credit for installing residential solar panels and extends the program until December 31, 2034. The tax credit decreases to 26% for PV panels put into service after December 31, 2032. Photovoltaic (PV) battery systems with at least three kilowatt-hours (kwh) of capacity also qualify for the tax credit.

The solar and home energy-efficiency ​​tax credits are in addition to the $7500 for new electric vehicle purchases and $4000 for lower- and middle-income families to purchase a used EV. The program will be run by individual states through September 30, 2031. The Inflation Reduction Act allows a maximum of $14,000 in total rebates. Household income cannot exceed 150% of the area median income.

Start planning updates

Fine Homebuilding regularly produces articles and videos to help builders and homeowners make energy-efficient updates to homes. Check out the articles below to start planning retrofits and upgrades and to utilize the cost reduction from the rebate program.

Heat Pumps & Water Heaters

• All About HVAC
• Understanding Heating and Cooling Equipment Terminology
• Choosing an Efficient Water Heater
• Heat-Pump Water Heaters
• High-Tech Heating and Cooling Systems
• Sized-Up Electric Heat Pump
• Webinar: Heat Pumps and Cold-Climate Applications–Designing for Comfort and Resiliency
• How to Choose the Right-Size Heating and Cooling System

Electrical Upgrades

• Planning an Electrical Remodel
• Understanding Service Panels
• Installing an Electrical Service
• Running New Wires Through Old Walls
• Electrical Retrofit–Working With Old Wires

Solar & Electric Vehicles

• The Steady Surge in Residential Solar
• Designing for Solar Panels
• Rules for Rooftop Solar
• Installing Rooftop PV
• Power Your Home With Bidirectional Charging

Air-Sealing and Insulation

• What is a Home Energy Audit?
• Straightforward Air-Sealing Strategies
• How to Set Up and Use a Blower Door
• A Guide to Choosing Insulation
• Six Proven Ways to Build Energy-Smart Walls

Fine Homebuilding Recommended Products

Fine Homebuilding receives a commission for items purchased through links on this site, including Amazon Associates and other affiliate advertising programs.

Foam Gun

We like using a professional foam-dispensing gun as opposed to straw cans because it allows you to easily control bead size and reuse the can.

Buy at Amazon

Utility Knife

This utility knife is well-made and comes in handy when cutting rigid foam insulation. You can extend the snap blade to cut through a 2-inch foam board.

Buy at Amazon

Staple Gun

Although powered staplers are very popular, you still need a manual stapler on the job site. This staple gun from DEWALT® is reliable and easy to fire, reducing fatigue over prolonged use.

Buy at Amazon