The 2023 Inflation Reduction Act: Impact on Heat Pumps
At Power Pro Plumbing, we believe everyone deserves to live in a comfortable, energy-efficient home. That’s why we are thrilled to share the exciting news about the 2023 Inflation Reduction Act and its impact on heat pumps.
This new bill allows homeowners to reduce their energy bills and make their homes more eco-friendly. We want to help you take advantage of this fantastic opportunity which is why we have put together this informative guide to the 2023 Inflation Reduction Act.
So, if you’re ready to start saving money on your energy bills and make some home improvements, keep reading and take action today! Contact us today at (833) 611-3081 to speak with one of our experts.
Heat Pump Rebate: A Key Part of the IRA
The IRA is designed to encourage individuals and businesses to become more environmentally friendly by providing heat pump rebates, AC rebates, and tax credits for energy-efficient upgrades. One of the primary objectives of the bill is to reduce greenhouse gas emissions and slow down global warming. To this end, the IRA offers tax credits for a wide range of energy-efficient upgrades, including heat pumps.
Homeowners who upgrade their heating and cooling systems can be eligible for the energy-efficient home improvement credit. This credit covers the cost of installing windows, new doors, skylights, insulation, and heat pumps that more efficiently regulate a home’s temperature. The credit may also cover services required during the installation process, such as home energy audits, water heater installation, and upgrades to electrical systems.
Eligibility for the Residential Clean Energy Credit
Homeowners who install residential clean energy units, such as solar panels, small-scale wind turbines, geothermal heat pumps, home battery storage, and fuel cell energy systems, may be eligible for the residential clean energy credit. Each installation is subject to its own eligibility criteria and maximum credit limits. The excess credit can be carried forward into the next year if the credit is greater than the taxes a taxpayer owes in a given year.
Benefits of Switching to a Heat Pump
On average, switching to a heat pump can save a household $500 to $1,000 yearly in heating and cooling costs. The IRA recognizes the critical role that highly efficient, variable-capacity heat pumps play in reducing domestic greenhouse gas emissions and lowering energy costs for Americans. The IRA incentivizes homeowners to make the switch and reduce their energy bills by offering tax credits for installing heat pumps.
Planning Your Upgrades
Homeowners should begin by looking around their homes or consulting one of our professionals for a home energy audit to determine your easiest potential upgrades with the greatest return on investment. Each upgrade is subject to its own tax credit for up to 30% of the total cost, but each credit has a different limit on how much you’ll get back on your taxes. The cap for insulation is set at $1,200, while tax credits for heat pumps can go up to $2,000. New windows, water heaters, and natural gas furnaces all have a cap of $600.
Claiming Your Tax Credits
Tax credits reduce the amount of taxes you owe or can increase your tax refund. If you make upgrades and purchases for home energy upgrades in 2023, you can claim those credits when filing your 2023 tax return in 2024.
Contact Our Team Today
The 2023 Inflation Reduction Act provides opportunities for homeowners to upgrade their heating and cooling systems, save on energy costs, and reduce their carbon footprint. Whether through heat pump rebates, AC rebates, and tax credits for energy-efficient upgrades or the installation of residential clean energy units, the IRA can help homeowners positively impact the environment while saving money.
Power Pro Plumbing can help you make the most out of the 2023 Inflation Reduction Act and guide you through the decision-making process regarding upgrades. Give us a call at (833) 611-3081 to speak with one of our HVAC specialists to learn more.