There are lots of questions about how NH homeowners are going to be able to receive funds through the Inflation Reduction Act(IRA) that was recently passed. Although there are still many unknowns, we have more guidance as of this writing to provide a bit more insight as to how these programs are going to work.
The Inflation Reduction Act: An Overview
The Inflation Reduction Act was first introduced in 2019 and has since been expanded to cover more households. The program provides financial assistance to eligible homeowners who want to make energy-efficient upgrades to their homes. This can include upgrades to heating and cooling systems, insulation, windows, and other energy-efficient improvements.
The program is funded through the federal budget and is administered by the Department of Energy(DOE). The amount of funding available each year depends on the federal budget and can vary from year to year. In addition, the DOE passes the funding directly to each State approved program leaving the state to disperse the funds.
Is IRA a Tax Credit or Rebate?
There are three components to the IRA as it relates to home heating/cooling/plumbing upgrades. There is a Federal Tax Credit and two rebate programs; High Efficiency Electric Home Rebate(HEERA) and Home Energy Performance-Based Whole House Rebate Program. The Federal Tax Credit is available today while the rebate programs are estimated to be available late 2023 as they require DOE and NH DOE approval for funding.
How Much Money Can You Get?
High Efficiency Electric Home Rebate Program: New Hampshire is slated to receive $34,749,580 for this program over the next 10 years as provided by the State’s DOE. For low-income households (under 80 percent of Area Median Income), the rebates will cover 100 percent of your heat pump costs up to $8,000. For moderate-income households (between 80 percent and 150 percent of Area Median Income), the Electrification Rebates cover 50 percent of your heat pump costs up to $8,000. The rebates may be implemented differently in each state, so we cannot guarantee final amounts, eligibility, or timeline. And without additional appropriations from Congress, the rebate programs will end once their initial IRA funding is exhausted. Total Electrification Rebates discounts across all qualified electrification projects are capped at $14,000.
Home Energy Performance-Based Whole House Rebate Program: New Hampshire is slated to receive $34,952,780 million for this program over the next 10 years. Rebates will be offered depending on either the modeled energy savings or the measured savings, and the income of the household, and whether it is a single family or multifamily building.
Federal Tax Credit 25C: 25C provides households a 30 percent tax credit for heat pumps and heat pump water heaters, capped at $2,000 per year. The credit resets each tax year, effectively becoming available again for additional projects. 25C also includes a 30 percent tax credit up to $600 for an electrical panel upgrade, but only if it’s upgraded in conjunction with another upgrade covered by 25C (like a heat pump). So it might be advantageous to do both at once!
What About NHSaves?
The NH Saves Rebate Program is another rebate program offered by the utility providers in our state. This program is completely independent of the IRA. NHSaves is designed to help homeowners make energy-efficient upgrades to their homes, such as upgrading heating and cooling systems or replacing appliances. The program offers rebates of up to $1,500 for energy-efficient upgrades. To be eligible, homeowners must work with an approved contractor who will complete the upgrades. Once the upgrades are completed, an application for the rebate program can be submitted. The amount of the rebate will depend on the upgrades that were made.
Summing Up…
All in all, these are some exciting times for NH homeowners to look into upgrading their home’s heating, cooling, and water heating systems with more efficient and modern equipment. Although we still have open ended questions to the Federal rebate programs, we have our state NHSaves rebate program and tax credits that can immediately be taken advantage of. Feel free to reach out to start your project and see what your situation will look like!
Sources:
-
https://www.energy.nh.gov/rules-and-regulatory/inflation-reduction-act-funding-programs
-
https://www.energy.gov/policy/articles/making-our-homes-more-efficient-clean-energy-tax-credits-consumers
-
https://www.rewiringamerica.org/app/ira-calculator/information/heat-pump-air-conditioner-heater
