Good news for homeowners wanting to make their home energy useage more sustainable! In 2022, the U.S. Congress passed a new law called the High-Efficiency Electric Home Rebate Act, which offers incentives to encourage homeowners to make their houses more efficient with electric appliances and heat pumps. The goal is to help low and middle-income Americans lower their carbon footprint and replace appliances with sustainable alternatives.
Later this year, the U.S. Department of Energy is expected to publish guidelines on how states should implement this program, so it’s still in the works. But you can start planning now to take advantage of some of these incentives. Rebates will apply at time of purchase for appliances, after state energy offices develop their own plan for administering benefits to eligible residents. While you’re waiting, why not plan out the sustainable future of your homestead?
Benefits of the high-efficiency electric home rebate act
The HEEHRA program offers up to $14,000 per household point-of-purchase rebate for replacing fossil fuel burning home appliances, including oil boilers or gas clothes dryers, with more efficient electrical units. Think furnaces, gas stoves and the like.
Rebates are available to both homeowners and renters, which is a super important inclusion.
To qualify, you must be a low or moderate-income household.
Find out if you’re eligible for an energy tax rebate
Here’s how to figure out if you are eligible to participate in the High-Efficiency Electric Home Rebate Act.
Low-income households are defined as earning less than 80% of the median family income in their area.
Moderate-income households earn 80% to 150% of their area’s median income for families.
So, qualifying for the HEEHRA program depends on where you live and how your income compares to other households in your city.
This may sound a bit confusing, so the U.S. Department of Housing and Urban Development created an online tool to help you determine which income category you fall into.
So just how much will this add up to? Nonprofit Rewiring America estimates that low and moderate-income households can expect to see rebate programs that cover 100% and 50% respectively of the following upgrades:
- Heat pump installation for heating-and-cooling system (up to $8,000)
- Heat pump water heater (up to $1,750)
- Heat pump clothes dryer (up to $840)
- Electric or induction stove (up to $840)
- Upgraded electrical wiring (up to $2,500)
- Upgraded electrical panel (up to $4,000)
- Home insulation, ventilation and sealing (up to $1,600)
Additional benefits of the HEEHRA Program
HEEHRA’s upfront rebates can be paired with extra federal energy efficiency and electrification tax credits. And some of them already became available on January 1, 2023. The down side to this is that low-income households might not owe enough in taxes to qualify for these credits, so they will go more to moderate-income households.
As usual with tax incentive programs, it’s not an instant coupon, so some families might not be able to afford to pay for electric appliances up front and wait for the tax credits. If you want to apply for this program, make sure to use the online calculator before you buy appliances.
Will your home benefit from electrical appliances?
Generally the answer is yes, your home would benefit from electrical appliances. They are usually much more efficient than appliances they replace, because these older units are both gas-powered and much less efficient than current models. But, it’s still a good idea to make sure that your new electrical appliances are both more efficient and affordable, as going electric can get pricey.
You can hire professionals to pinpoint weaknesses in your home’s energy efficiency and suggest improved insulation or the right size electrical appliance for your needs. Or, do it yourself with the U.S. Department of Energy guide for inspecting and fixing energy leaks.
Utility companies also sometimes offer energy assessments to help you make a plan. These audits can even be virtual over video chat. In-person auditors use infrared cameras to measure insulation and leaky areas, and they can perform “blower door” tests to see how much air is coming and going from your home.
Other energy efficiency programs for homeowners
There are several other new laws that aim to help homeowners participate in turning the country sustainable over the next decade. The Inflation Reduction Act and the Biden administration’s $1 trillion infrastructure law include new funding for the Department of Energy’s Weatherization Assistance Program, which helps low-income households make energy-efficiency upgrades.
The Inflation Reduction Act offers tax credits for upgrades triggered by electrification projects. It’s not yet decided whether households that install new electric appliances now will receive HEEHRA rebates retroactively, which also offer assistance for panels and wiring. It might be wise in this case to wait until the official guidance is formalized to decide on replacing certain equipment.
Many communities and utility companies are now offering financing for electrification upgrades, so be sure to ask around, including with the company selling and installing your appliance. Electrification can still cost several thousand to tens of thousands of dollars, and you want every discount and benefit you can find to make the upgrade pay for itself sooner than later.
Is your home ready for electric appliances?
One final consideration: can your home electrical panel handle all electric appliances? While electric appliances are more efficient, they often require more electricity to offset the gas used by former appliances. Many older homes have electrical panels that are 100 amps, which might need to be upgraded to 200 amps to go all electric. Hire an electrician to consult on the cost of making sure your home is ready for your electric upgrades. Make sure to tell the electrician everything you’re planning, so you can upgrade your home electrical system to support future upgrades as well, such as house batteries and EV chargers.
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