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Inflation Reduction Act Introduces New Opportunities for Insulation

Inflation Reduction Act Introduces New Opportunities for Insulation

2023 is the year for saving big on home renovations.

With the help of The Inflation Reduction Act that was signed into law in August of 2022, homeowners will be receiving a helping hand for making environmentally friendly upgrades. One of the main focuses of this bill is centered on energy efficiency and improving local communities. Homeowners will have support when making efforts to encourage eco-friendly products and services. Catch up on clean energy production with these upcoming changes.

Changes to Home Upgrade Savings: A Summary

Many homeowners are already familiar with the Nonbusiness Energy Property Credit that ended in 2021. This allowed homeowners to receive tax credits for certain purchases. Within the new act, the Energy Efficient Home Improvement Credit will have a similar role, but with new and improved initiatives. This updated part will provide the opportunity to reduce your tax bill as you make energy-efficient upgrades on appliances and throughout your home.

The act also contains The HOMES (Home Owner Managing Energy Savings) Rebate Program. This area is designed to provide cash back in an effort to reduce overall energy use in a building. Through qualified home improvements, such as insulation upgrades, your household can earn money back based on how much you’re projected to save. These predictions need to be based on a DOE-approved energy audit.

Finally, one of the other initiatives that affect home improvements is the High-Efficiency Electric Home Rebate Program within the HOMES program. This section helps low- and middle-income families while encouraging households to make environmentally friendly choices. Rebates will be offered for certain purchases that quality as energy-efficient renovations and appliances.

How Much Can You Save With The Inflation Reduction Act?

Your return on investment opportunities for energy efficiency upgrades within your home has just been increased by the new Inflation Reduction Act. As such, you can improve temperature regulation and indoor air quality, and reduce energy waste by making insulation and air sealing upgrades as qualifying purchases. There are several ways you can help reduce expenses for these renovations and updates.

One of the first ways you can save this year is through the Energy Efficient Home Improvement Credit. Energy-saving installations like insulation, new windows, or doors, you can claim up to 30% of the cost starting in 2023. Within the Nonbusiness Energy Property Credit, which was the previous credit system, households had a $500 lifetime limit. Within the Energy Efficient Home Improvement credit, the limit has been raised to a $1,200 annual limit with various annual limit changes for qualifying improvements.

The High-Efficiency Electric Home Rebate Program is the second potential opportunity to earn money back on purchases. As we mentioned in the summary above, this part of the Inflation Reduction Act helps low- to middle-income households. To qualify for this rebate program, households need an annual income that is less than 150% of the area’s median income. Insulation, air sealing, and ventilation upgrades specifically can qualify for up to $1,600 in rebates for purchases. While there are a few limitations and additional qualifications, you can check if you meet the requirements before planning a major home improvement project with your local experts.

For many states, there are a number of opportunities already available to reduce home improvement costs and encourage energy efficiency. Koala insulation of Northwest Jacksonville partners with the local electric company, JEA. For JEA electric customers who have less than 5 inches of insulation, they will receive $.20 per square foot with a maximum of $200.00.  The cost comes directly off the invoice and our team files for the rebate for our customers.

How Insulation Can Save You Money Outside Of Credits and Tax Returns

Did you know that insulation can be found throughout your home? The material isn’t just in your attic - you can find insulation in your walls, under the floors, and even in between ceiling joists. Poorly installed or maintained insulation and air sealing can lead to a very uncomfortable home. Unfortunately, it can also have a serious impact on your monthly costs and spending!

These materials significantly contribute to thermal regulation and climate control in a building. While insulation reduces the rate of heat transfer, air sealing reduces air leaks. Both help to keep in heat or conditioned air and reduce uncomfortable drafts or cold spots. In addition to comfort, it also takes the stress off of your HVAC system so the unit isn’t continuously running to make up for irregular temperatures. If you’re seeing a rise in heating and cooling bills or maintenance fees, you need to schedule an evaluation to check out your insulation and air sealing.

On top of the new Inflation Reduction Act and your area's energy efficiency rebate programs, updated insulation and air sealing provide a quality return on investment throughout the year. With a temperature-regulated home, you waste less energy by reducing unwanted heat loss and gain during uncomfortable temperatures. With less heat transfer and fewer air leaks, your regular heating and cooling bills are reduced thanks to better climate control. Your HVAC system no longer needs to run constantly to match the desired temperature on the thermostat, which also reduces regular maintenance fees.

Can Energy Efficiency Save You More This Year?

Many people start off the new year with resolutions that impact their health, habits, and savings. Focusing on improving your home and environment is a great way to tackle all three of these goals! Updating your insulation doesn’t need to be a difficult, expensive task. With help from your local experts at Koala Insulation of Northwest Jacksonville, you can learn more about the rebate opportunities from the government and your local opportunities.

On top of finding you better savings, our team of industry professionals is also here to help you make cost-effective and environmentally friendly decisions. We provide free evaluations so you and your household can target areas that have poor coverage or deteriorated material. From there, we can help you break down a game plan that takes into account your schedule and budget. For more information on how to take full advantage of the Inflation Reduction Act’s benefits, contact Koala Insulation of Northwest Jacksonville today and schedule a free evaluation.