The Biggest Home Improvement Rebates for 2023
For larger home upgrades that use less power, the Inflation Reduction Act includes substantial rebates for energy-efficient home upgrades. These rebates can be a valuable opportunity for homeowners to save money and reduce their utility bills. There are two federal programs available: HOMES and HEEHRA, both of which have specific eligibility criteria and offer various rebates. According to energy.gov, “These home energy rebate programs will help American households save money on energy bills, upgrade to clean energy equipment and improve energy efficiency, and reduce indoor and outdoor air pollution.”
HOMES Rebates:
The HOMES rebate program provides financial incentives for homeowners who have made energy-efficient renovations to their homes since August 16, 2022, or plan to do so before 2031. If your upgrades have resulted in a 35% or more reduction in energy usage, you could qualify for a rebate of $4,000. Low or middle-income households may be eligible for double the rebate amount. Covered upgrades that contribute to energy reduction include solar panels, insulation, heating systems, water treatment, appliances, windows, and lighting.
HEEHRA Rebates:
The HEEHRA rebate program focuses on the electrification of home appliances. It offers reimbursements to middle and low-income households for upgrades to major systems and appliances, with a maximum rebate amount of $14,000. For instance, you can receive a discount of $840 for replacing gas-burning stoves and ovens with electric burners, or an $8,000 discount for installing an electric heat pump. Additional discounts through HEEHRA include $1,750 off an electric heat pump water heater, $4,000 off an electric service center load upgrade, $2,500 off the price of electric wiring, and $1,600 off insulation, air sealing, and ventilation. It's important to note that HEEHRA rebates are applied as point-of-sale discounts and do not offer retroactive payments like the HOMES rebates.
HEEHRA Coverage for Upgrades:
If you plan to upgrade your HVAC system to use a heat pump, the HEEHRA rebate could potentially cover the entire project cost. Heat pumps typically range from $2,500 to $10,000, meaning you could receive a free upgrade under this program. Additionally, if you choose to install a heat-pump hot-water heater, you may qualify for a rebate of up to $1,750, as these installations usually cost between $1,500 and $3,000. However, keep in mind that if you don't have existing ductwork for a forced air system, your renovation costs could increase by up to $30,000.
Combining Renovations for HOMES Rebates:
Under the HOMES act, you can receive reimbursement of up to $8,000 for energy usage improvements, including insulation upgrades that result in a 35% energy reduction. However, to trigger the rebate, you'll need to replace your windows as well, achieving an additional 16-24% energy usage reduction. The cost of these renovations can vary based on the size and age of your home, so it's advisable to consult with a professional to assess the potential savings versus installation costs.
Important Considerations:
When planning your renovations, keep the following points in mind:
Rebates cannot be combined, so if you wish to claim both HOMES and HEEHRA rebates, it's best to separate your projects and allocate separate budgets accordingly.
The rebates are applicable only to the replacement of older, less-efficient, or gas- or oil-burning systems. For example, if you want to replace your old electric range with a new electric cooktop as part of a kitchen renovation, it will not be covered unless the previous range was an inefficient electric model.
The complete details of the rebate programs and the qualification process are still being finalized. Stay updated by signing up for updates from energy.gov.
By being aware of these considerations and taking advantage of the available rebates, homeowners can significantly reduce their expenses while making energy-efficient upgrades to their homes.
