Rebates for Home Improvements

Winter’s high heating bills will soon be here, but did you know you can get money back for making your home more energy efficient? New legislation passed this summer will give homeowners significant rebates and tax credits for energy-efficient home improvements. We’ll discuss that today on MoneyWise. This is all part of the massive Inflation Reduction Act passed in August, which was largely an environmental spending bill. As part of that law, the government provides billions of dollars for homeowners who make improvements that save energy. The rebates and tax credits cover a range of improvements, from installing new electric appliances to beefing up your home’s insulation in the attic and crawl spaces. By making all of the improvements listed in the legislation, you could receive up to $14,000 in rebates and tax credits, and up to a 30% rebate on the cost of installing solar panels. If you’ve been thinking about making any improvements to lower your energy costs, this is a big incentive. Here are some examples: POTENTIAL ENERGY SAVINGS If your natural gas furnace is getting old, you could replace it with an electric heat pump and get a big rebate. Of course, heat pumps are more suitable in the South. The farther north you go, the less efficient they become. So they’re not for everybody. If you need a new water heater, and the old one uses natural gas, you can get a rebate for swapping it out for an electric heater. Of course, you’ll probably save money by installing any new appliance. That’s simply because newer models tend to be more energy-efficient. A new energy-friendly water heater alone could save you hundreds of dollars a year. You can also save a bundle by weatherstripping and beefing up the insulation in your home, but now, you may be able to get a rebate for it. We wouldn’t advise going out of the way to make these improvements, but again, if you've been thinking about doing one or more of them (and budgeting for them), it’s a great opportunity to save some money. INCOME-BASED BENEFITS Depending on your income, the legislation allows for up to $8,000 back for installing a heat pump, $1,750 for something called a heat pump water heater, nearly $850 for installing a new electric range and a heat pump clothes dryer. If you’re thinking that adding all of these new appliances might put a severe strain on an older home’s electric panel and wiring, you’re right. You can almost hear breakers clicking off all across America. So the bill will give you up to $4,000 for upgrading your electrical panel and $2,500 for new wiring. But rewiring a house will surely cost a lot more than that. You can also get up to $1,600 back for sealing and insulating your ductwork. If you make between 80-150% of the median income in your area, you can get back 50% of the cost of these improvements up to the $14,000 limit. If your income is below 80% of your area’s median income, you can get back the full cost of the improvements. Federal tax credits for installing residential solar panels have been in place for years, but the legislation boosts them from 26% of the cost to 30% and extends them until 2032. Tax credits for other energy-efficient improvements include $600 for new windows, $500 for doors and $2,000 for heat pumps. It would be a good idea to consult a tax professional before making any expensive energy-reducing improvements to your home. You want to make sure you’re eligible for credits, and if so, how much. Rebates are a different story. That part of the legislation will be handled by states, so the details on how to apply for them will vary. You should check out your state’s website for more information, or contact your local electric utility. One last word about this legislation, regardless of how you might feel about it, reducing energy costs by making your home more fuel-efficient is good stewardship. And even without rebates and tax credits, most of these improvements will pay for themselves in lower utility bills over the long run. On today’s program, Rob also answers listener questions: ● How does debt settlement affect your credit? ● Is title lock insurance worthwhile? ● When do you have to start taking a required minimum distribution? ● How do you prioritize, giving, saving, and investing? RESOURCES MENTIONED: ● Xx Remember, you can call in to ask your questions most days at (800) 525-7000 or email them to [email protected]. Also, visit our website at MoneyWise.org where you can connect with a MoneyWise Coach, join the MoneyWise Community, and even download the free MoneyWise app. To support this ministry financially, visit: https://www.oneplace.com/donate/1085/29