Consumer Rebates and Tax Credits created under the Inflation Reduction Act
In August of 2022, the Federal Inflation Reduction Act (IRA) was signed into law, authorizing tax credits and rebate programs designed to help households across the country save money and energy.
Lowering Energy Costs for Households Through Rebates
The IRA created two new residential rebate programs. The Home Energy Performance-Based, Whole-House Rebates (HOMES) Program will provide rebates for whole-house energy savings retrofits. The High-Efficiency Electric Home Rebate (HEEHRA) Program will provide point-of-sale consumer discounts on the purchase of high-efficiency electric home appliances.
According to the U.S. Department of Energy (US DOE) the HOMES & HEEHRA rebates are expected to be available in early 2024. The US DOE is currently conducting stakeholder outreach and offering listening sessions to gather input into the design of the programs. Virginia Energy is awaiting further guidance from US DOE on these rebate programs . You can find more information and sign up for email updates on these websites: the White House Clean Energy page and the US DOE Home Energy Rebate Program page.
Lowering Energy Costs for Households Through IRS Tax Credits
The IRA expanded or extended several energy-related tax credits that are effective as of January 1, 2023. These programs will be managed through the Internal Revenue Service (IRS). Please check with your tax advisor for further details:
Residential Clean Energy Credit (including Solar)
- Provides a 30% tax credit for the purchase of residential clean energy equipment, including rooftop solar, wind, geothermal and battery storage with capacity of at least three kWh.
Energy Efficient Home Improvement Credit
- Provides a tax credit for energy-efficiency improvements of residential homes.
- The base credit amount is 30% of total costs with limits on each type of improvement.
- The total annual credit is capped at $1,200, with a separate annual $2,000 limit for heat pumps.
New Energy Efficient Home Credit
- Tax credit for homebuilders.
- The credit is $2,500 for new homes meeting Energy Star standards and $5,000 for certified zero-energy ready homes. For multifamily units, base amounts are $500 per unit for Energy Star and $1,000 per unit for zero-energy ready.
Clean Vehicle Credit (Electric Vehicles)
- Provides a maximum $7,500 tax credit for consumers purchasing new qualifying clean vehicles, including battery electric, plug-in hybrid or fuel cell electric vehicles.
Previously-Owned Clean Vehicles Credit
- Vehicle and battery must meet standards including in manufacturing and sourcing
- Provides a maximum $4,000 tax credit to support used vehicle buyers who choose to go electric.