CENTRAL CONNECTICUT Blog

Save On Your Insulation Service With Federal Incentives

If you're considering a future home energy upgrade, such as insulation, federal tax credits and rebates are now available to CT homeowners. Starting in 2023, homeowners can make energy-efficient upgrades to their home and take advantage of federal tax rebates through the Inflation Reduction Act. The Federal Inflation Reduction Act offers an incentive program that includes rebate opportunities for homeowners. The great news for CT homeowners is this rebate is in addition to the Energize CT rebate program.

This Federal rebate includes incentives on the cost of insulation and air sealing for your attic, basement, walls, etc. This is a huge piece of legislation that takes time to read and digest. Here are answers to some of the most common Inflation Reduction Act questions that customers are asking:

Where can I access high-level information about the Inflation Reduction Act? Our website is a great place to start your search! Our Incentives page has the most basic information about the Federal rebate and incentives. The three biggest incentives are:

• The 25C federal tax credit, a 30% tax credit with a $1,200 annual cap for insulation and air sealing materials. This is the most common rebate that most customers are taking advantage of.

• New Homeowner Managing Energy Savings – a rebate program that offers rebates based on modeled energy savings—as much as $4,000, and up to $8,000 for low and moderate income (LMI) households.

• HEEHR (High-Efficiency Electric Home Rebate) program, for Low to Moderate Income (LMI) households only. This covers a variety of appliance upgrades and energy-efficiency services with a max rebate of $1,600 for insulation, air sealing, and ventilation specifically. 

Does the tax credit for insulation and air sealing cover both materials and labor costs? No, the 30% federal tax credit only applies to insulation and air sealing materials, not installation costs. We work with our customers to provide them with an itemized receipt separating materials and labor costs in anticipation of tax filing.

Can tax credits be used over multiple years? If the work is separate, a customer can claim up to $1,200 each year for insulation and air sealing materials. But if the amount of the tax credit exceeds the customer’s federal tax liability for that year, they cannot roll over any remaining balance to the following year. Talk with your tax specialist about this opportunity.

When will rebates be available? Funding for rebate programs will be allocated to each state’s energy office, and individual states will be responsible for implementing their own programs. Industry insiders currently estimate that states will begin to release more information this summer, and depending on the state, rebates will likely start to become available to consumers in Q4 of 2023 or early 2024. 

At Koala Insulation of Central CT, we’re here to help you save on all your insulation needs. Give us a call to schedule your free insulation evaluation or visit our website to access our web form.