WEST HOUSTON Blog

Can The Inflation Reduction Act Increase Insulation Savings in Houston

When the Inflation Reduction Act was passed by the Senate and signed into law in August of 2022, the number of benefits for home renovation projects grew. Now is the time to take advantage of energy efficiency upgrades to improve the comfort and safety of your home. While you'll have the opportunity to earn money back directly from programs within the bill, support is also being provided to local initiatives and opportunities. Learn more with Koala Insulation of West Houston's breakdown of new and updated home improvement benefits. 

3 Changes For Property Owners Summarized

• The Energy Efficient Home Improvement Credit: The Nonbusiness Energy Property Credit has received an update after ending in 2021. While this program has been providing tax credits to homeowners since 2005, its new rendition in the form of the Energy Home Improvement Credit has improved and extended initiatives. You’ll be able to reduce your tax bill when making energy-efficient upgrades to your home and appliances. 

• The HOMES (Home Owner Managing Energy Savings) Rebate Program: 

This rebate program is designed to encourage reduced energy usage by providing cashback. With certain home improvements, such as insulation upgrades, your household can earn money back based on projected savings from a DOE-approved energy audit. 

• High-Efficiency Electric Home Rebate Program: Under the HOMES rebate program, this section is aimed toward helping low- and middle-income families. Once qualified in your area, you can receive certain rebates on energy-efficient renovations and appliances at an adjusted rate. 

Saving With The Inflation Reduction Act

Making improvements to your home that support your energy efficiency and building envelope has a number of benefits for your home. Updating areas like your insulation and air sealing can help cut your regular energy costs while improving your comfort and safety. With the help of programs in the Inflation Reduction Act, you have even more opportunities to save money by improving your environment.

Your household can start by maximizing your benefits through the Energy Efficient Home Improvement Credit. When you purchase energy-efficient installations (insulation, windows, air sealing, etc.), 30% of the cost can be claimed to start in 2023. The previous credit system, the Nonbusiness Energy Property Credit, had a $500 lifetime limit. This update increases the credit to $1,200 and changes to an annual limit. Certain major purchases will have annual limit changes and your local home improvement team can help you navigate these advantages.

Another great way to improve your home's energy efficiency is with the support of the HOMES Rebate Program. Through DOE-approved energy audits, you can earn money back based on three results: the amount of energy saved, the modeled savings, and your household income. There are 3 rebate amounts you can earn from. You’ll receive the lesser of either 50% of the project cost or the following:

• Measured Energy Savings <15%: up to $2,000 for a 20% reduction of energy use
• Modeled Energy Savings 20%-35% : $2,000 
• Modeled Energy Savings >35% : $4,000

The High-Efficiency Electric Home Rebate Program is another potential savings opportunity, designed to help low- and middle-income families make environmentally friendly 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 renovations and appliances. Adjusted rebate amounts will provide assistance to these households when making home renovations that reduce energy waste.

Many of these rebates and funding will be funneled through state programs, providing even more opportunities to overlap with other programs and applications. This helps to increase individual energy efficiency rebate programs depending on your area’s initiatives. Many of these funds will remain available through 2031 or longer in certain cases, so you can work with local industry professionals to create an energy-efficiency plan that helps you maximize your benefits.

Understanding Insulation Upgrades

For insulation, air sealing, and ventilation, specifically, your household can get up to $1,600 in rebates for your purchases in many cases. Insulation and air sealing are installed throughout your home in order to maintain temperature regulation and improve climate control. While you may be familiar with the material in your attic, there are spaces all throughout a building that need to be regularly updated and maintained. Crucial spots include in between ceiling joists, under the floor, within the walls, and throughout crawl spaces and the basement.

Unregulated heat transfer and air leaks can create drafts, cold spots, and irregular temperatures while hiking up your monthly bills. In order to maintain a comfortable temperature, your HVAC unit needs to kick on more often. While this increases energy waste and, in turn, your energy bills, this extra use can also lead to frequent maintenance. With better material, you can significantly improve your home’s functionality while saving more throughout the year. 

With the help of the Inflation Reduction Act and your area's energy efficiency rebate programs, you can help improve the return on investment from these upgrades. Lower your energy usage and decrease the risk of overworking your unit by supporting your building envelope system. You'll be able to cut your heating and cooling bills while also creating a more comfortable environment for your household.

Learn More About The Inflation Reduction Act Benefits In Texas

Home renovations and improvements can look costly, especially if you’re just looking at average estimates on the internet. However, there are a number of programs, opportunities, and services that are available to improve your experience and reduce the strain on your budget. With the Inflation Reduction Act, there are now even more ways to save by earning money back on qualifying purchases. 

Koala Insulation of West Houston also provides free evaluation to help reduce the cost for you and your household. We provide details on the current condition of your home’s insulation and air sealing so you can make informed decisions on quality changes and updates. We can also help you navigate the necessary steps to getting the most out of rebates from your local programs in addition to the Inflation Reduction Act. Contact our team of experts at Koala Insulation of West Houston to schedule a free evaluation and learn more about how you can improve your environment while cutting costs.