Inflation Reduction Act (IRA): What It Means for Homeowners and Insulation

Signed into law in August 2022, the Inflation Reduction Act (IRA) is the most significant climate legislation in U.S. history. This sweeping act offers a wide range of incentives to help homeowners reduce their energy usage, cut costs, and invest in energy-efficient upgrades—including home insulation. If you’re looking to improve your home’s comfort and lower your utility bills, understanding how the IRA affects insulation improvements can help you save money while making your home more energy-efficient.

At Koala Insulation of Georgetown, we help homeowners in Central Texas take full advantage of these new rebates and tax credits. Here’s everything you need to know about how the IRA supports insulation upgrades and how you can benefit.

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What Is the Inflation Reduction Act?

The Inflation Reduction Act is a federal law aimed at reducing inflation, lowering prescription drug costs, and most notably, fighting climate change through clean energy investments. One of the key features of the IRA is its emphasis on energy efficiency upgrades for residential properties.

For homeowners, the IRA expands existing tax credits and introduces new rebate programs to make energy-efficient upgrades—like insulation—more affordable.

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Energy Efficiency Tax Credit (25C)

One of the most relevant IRA provisions for homeowners is the Energy Efficient Home Improvement Credit (Section 25C). This revamped credit allows you to claim up to 30% of the cost of certain energy-efficient improvements to your home, including insulation, air sealing, and ventilation systems.

Here’s what’s included:

• A 30% tax credit on insulation materials and installation costs
• A maximum of $1,200 per year in tax credits for eligible improvements
• Annual limits reset each year from 2023 through 2032
• Applicable to primary residences only (not new construction or rental properties)

This is great news for homeowners looking to upgrade their insulation. Whether you’re adding attic insulation, wall insulation, or crawl space insulation, you may be able to reduce your tax bill while enhancing your home’s energy performance.

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High-Efficiency Electric Home Rebate Program (HEEHR)

Another important provision under the IRA is the High-Efficiency Electric Home Rebate Program. While this program is primarily focused on electric appliances, it also offers rebates for insulation, air sealing, and ventilation upgrades—especially for low- to moderate-income households.

Eligibility highlights:

• Up to $1,600 in rebates for insulation and air sealing
• Income-based qualification (households must make less than 150% of the area median income)
• Can be combined with other federal tax credits and state incentives
• Rebates are point-of-sale, meaning they are applied as discounts at the time of purchase or installation

Texas is expected to roll out this program soon, and Koala Insulation of Georgetown is monitoring the local implementation to help our customers access available funds as they become available.

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Why Insulation Matters in Energy Efficiency

Insulation is one of the most cost-effective ways to reduce your home’s energy use. A properly insulated home helps regulate indoor temperatures, minimize heating and cooling costs, and reduce strain on HVAC systems. This means better year-round comfort and a smaller environmental footprint.

In Georgetown, where summers can be hot and winters chilly, upgrading your insulation is an investment that pays off in both energy savings and comfort. Whether you’re installing spray foam, fiberglass, cellulose, or a hybrid solution, better insulation translates into lower monthly bills and a more sustainable home.

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How Koala Insulation of Georgetown Can Help

We specialize in assessing your home’s current insulation, identifying gaps or inefficiencies, and recommending the most effective solutions based on your goals and budget. With the IRA now in effect, it’s the perfect time to insulate your home and take advantage of the federal incentives available.

Here’s how Koala Insulation of Georgetown can assist you:

• Evaluate your eligibility for IRA incentives
• Recommend eligible insulation products and installation practices
• Provide documentation needed to claim your tax credit
• Ensure all work meets federal and local energy efficiency standards

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Steps to Claim Your Insulation Tax Credit

If you’re planning to upgrade your insulation and want to claim the 25C tax credit, follow these simple steps:

1. Schedule an energy assessment with a trusted insulation provider like Koala Insulation of Georgetown.
2. Select eligible insulation materials and installation services.
3. Complete the project and save all receipts and documentation.
4. File IRS Form 5695 when you do your taxes for the year the project was completed.
5. Claim up to 30% of the cost, capped at $1,200 per year.

Be sure to consult with a tax advisor to ensure you qualify and are applying the credit correctly.

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Additional Ways to Save

In addition to the IRA incentives, there may be local rebates and utility-based programs in Georgetown and surrounding areas. Energy providers and municipalities sometimes offer rebates for energy efficiency upgrades, including insulation. Koala Insulation of Georgetown stays up-to-date on these opportunities to help you stack savings wherever possible.

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Final Thoughts

The Inflation Reduction Act is a game-changer for homeowners looking to make energy-efficient upgrades. With generous tax credits and rebate programs now available, there’s never been a better time to invest in quality insulation. You’ll not only save money on your energy bills—you’ll also reduce your home’s carbon footprint and increase indoor comfort.

Whether you’re considering attic insulation, wall insulation, or air sealing, the team at Koala Insulation of Georgetown is here to help every step of the way.

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Call Us Today for a Free Estimate

Ready to make your home more energy efficient and take advantage of Inflation Reduction Act benefits?

Call Koala Insulation of Georgetown at (737) 400-5955 or visit https://koalainsulation.com/georgetown to schedule your free insulation estimate today.

Let’s make your home more efficient, comfortable, and sustainable—while saving you money.