- The Tax Authorities remind homeowners about energy efficiency credits
- Homeowners are eligible for rebates on solar panels, heat pumps and more
- The benefits are part of last year’s Inflation Reduction Act, which passed in 2022
Homeowners looking to give their properties an eco-friendly makeover can save thousands of dollars thanks to a host of government tax breaks.
The Internal Revenue Service (IRS) is reminding taxpayers that they can qualify for thousands of dollars in green upgrades, including installing a heat pump, solar panels and insulation systems.
The benefits are part of the Inflation Reduction Act passed in 2022, which offered a $9 billion rebate package aimed at encouraging Americans to increase their home efficiency.
Owners can save 30 percent on the cost of installing solar panels on their roof, while motorists can take advantage of a $7,500 tax credit on select electric car models.
The Internal Revenue Service (IRS) is reminding taxpayers that they can qualify for thousands of dollars in green upgrades, including installing a heat pump, solar panels and insulation systems
They can also claim a 30 percent tax credit on a heat pump – up to $2,000 per year. A heat pump can replace an old air conditioning unit or a gas heater because it can function as both.
Similarly, investing in insulation or more efficient windows and doors receives a 30 percent tax credit, up to a maximum of $1,200.
And taxpayers can even qualify for a credit worth up to $150 if they only commit to a $500 energy audit.
IRS guidelines require the audit to identify the largest energy efficiency improvements, including a specific estimate of energy and cost savings for each improvement.
Renters may even be able to claim some credits, as can second-home owners, although landlords won’t qualify for the break.
Many of these projects come with high initial costs, but experts emphasize that they are a valuable long-term investment.
According to Kraig Edelman, CEO of Illinois electric utility Edelman, homeowners typically pay about $20,000 to install a six-kilowatt system for a home.
However, the 30 percent Federal Solar Investment Tax Credit (ITC) reduces the average upfront price to $14,000. Some states also offer their own solar tax credits.
Architect Pam Hutter, who leads Hutter ArchitectsIt is estimated that solar panels can save the average household approximately $1,200 in electricity bills annually. It means it takes an owner about twelve years to break even on the initial installation costs.
Hutter told DailyMail.com: “I have overseen numerous projects focusing on sustainability and energy efficiency.
‘An example was a house where we installed solar panels, improved the insulation and installed a ground source heat pump. It led to a 60 percent reduction in the home’s annual energy bill.’
The White House has long been committed to eco-friendly home upgrades, but until now many of these products have remained far too expensive for the average consumer.
The benefits are part of the Inflation Reduction Act passed in 2022, which offered a $9 billion rebate package aimed at encouraging Americans to increase their home efficiency. In the photo: President Biden will be presented with an electric Chevrolet Silverado pickup in 2022
Owners are also eligible for a 30 percent tax credit on a solar panel system, but the upfront costs remain expensive for the average consumer
Research from the Department of Energy and Lawrence Berkeley National Laboratory found that only 14 percent of U.S. residential solar households had an annual income of less than $50,000 in 2021.
Similar accusations have been made against electric vehicles that cost an average of $55,242, Kelley Blue Book say. By comparison, the average cost of a gas-powered vehicle was $44,989 in April.
While these vehicles are cheaper to operate in the long run, experts warned that it could take up to a decade for the initial investment to break even.