How to get ‘free’ money to help you transition to cleaner energy
With the new year, homeowners now have access to money made available by the U.S. government to transition fossil-fuel-burning appliances into cleaner energy sources.
Cynics say there’s no such thing as a free lunch, but there is some free money available for homeowners to transition from fossil fuels to cleaner energy sources.
As part of the “Inflation Reduction Act,” which Congress passed last year, households are being offered thousands of dollars of incentives to switch from fossil-fuel burning heaters and stoves to cleaner technology, with over a half-dozen tax credits that began on Jan. 1.
Later in 2023, lower-income households will be eligible to receive upfront discounts on some of the appliances, without having to wait until the end of the year to receive a tax credit.
Homeowners can use an online tool from Rewiring America, a nonprofit that advocates for electrification, to get a sense of whether they could qualify for the upfront discount.
The home improvement offers are in addition to available credits of up to $7,500 for buying an electric vehicle.
Under the new bill, the tax credit for a heat pump is 30% of the cost, up to $2,000. Heat pumps, which run on electricity and move heat, rather than generating it, are more efficient than traditional gas or electrical heater.
For those who want to generate their own clean energy, rooftop solar panels are eligible for a tax credit of up to 30% of the cost of installation. The Inflation Reduction Act also includes a tax credit for homeowners to upgrade their electricity panels and to install battery storage.
While most of the tax credits can benefit homeowners, renters can subscribe to a community solar project, which will allow them to share lower energy costs, and other benefits of “ownership” in tandem with other renters who have a financial stake in the project.
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