How Does The Inflation Reduction Act Impact Your Insulation Savings

How Does The Inflation Reduction Act Impact Your Insulation Savings?

If you’ve been thinking about making a few home renovations this year, now is the best time to improve the energy efficiency of your house. The Inflation Reduction Act was passed by the Senate on August 7 and signed into law on August 16. This bill is going to affect homeowners in a lot of ways, with one of the main focuses being centered on addressing climate change. This includes making efforts to encourage eco-friendly products and services while also helping clean energy production.

So, what does this mean for you and your household?

If you’re familiar with the Nonbusiness Energy Property Credit that ended in 2021, you may already be aware of the tax credits homeowners can claim on certain purchases. The Energy Efficient Home Improvement Credit within the Inflation Reduction Act is going to have a similar role with new and improved initiatives. Essentially, you’ll be able to reduce your tax bill when you make energy-efficient upgrades to your home and appliances.

Additionally, the bill introduces the High-Efficiency Electric Home Rebate Program. In an effort to encourage households to make environmentally friendly choices, rebates will be offered to low- and middle-income families for certain purchases. If your total annual income is less than 150% of the median income in your area, you’ll qualify for rebates on energy-efficient electric appliances.

At a Glance

Energy Efficient Home Energy Improvement Credit

The new Inflation Reduction Act has just increased your return on investment opportunities for energy efficiency upgrades throughout the house. This includes making insulation and air sealing upgrades that can improve your temperature regulation, indoor air quality, and energy waste. There are two possible ways to reduce your expenses when tax time rolls around.

Starts

2023

Credit Claim

30% of the project cost

Annual Limit

$1,200

The Importance of Updated Insulation for General Savings

The first is with the Energy Efficient Home Improvement Credit. When you purchase upgrades on energy-saving installations like insulation, windows, doors, and other building changes, you can claim 30% of the cost starting in 2023. The previous credit system (the Nonbusiness Energy Property Credit) had a $500 lifetime limit; this has been replaced by a $1,200 annual limit with various annual limit changes for certain types of qualifying improvements.

The second potential opportunity is through the High-Efficiency Electric Home Rebate Program. As stated earlier, you’ll currently need to qualify as a low- to middle-income household with an annual income of less than 150% of your area’s median income. For insulation, air sealing, and ventilation, specifically, your household can get up to $1,600 in rebates for your purchases. There are a few limits and additional qualifications, so make sure you meet the requirements before setting out on a major home improvement project.

This bill includes a number of other opportunities for rebates and funding due to several overlapping programs and broad applications. Many of these will be funneled through state programs, which could increase individual energy efficiency rebate programs, depending on your government initiatives. If you’re still looking for the best way to renovate your home, don’t worry – most of these funds will remain available through 2031 or longer in some cases.

We Can Help You Save Money with Inflation Reduction Act!

At Koala Insulation of Michiana, and EnergyStar Partner, we’re dedicated to helping improve our community by providing our neighbors with the best possible service. This means keeping you and your household informed on new ways to improve your savings and comfort throughout the year. On top of the new Inflation Rate Act, our team of insulation professionals provides FREE evaluations so you have a better understanding of your current insulation and air sealing before making any decisions.

Our evaluations are detailed inspections of your building, from the floor to the roof! You’ll have a detailed breakdown of the insulation, air sealing, and building envelope to help you target pain points while also making note of areas that will need upgrades in the near future. With the help of our industry experts, you and your household can make informed decisions with the additional education and information we provide to help you find the best solution for your home’s unique needs.