New tax incentives ease home improvements to beat the heat
New tax incentives ease home improvements to beat the heat
As Americans in the South face an extreme heat wave, cranked-up air conditioners are breaking records for electricity usage and testing the power grid in Texas. Amid the blistering heat, home improvements — like installing heat pumps or adding insulation — are key to reducing the energy used to keep homes cool.
And this summer, the government is making billions of dollars available for homeowners to make these changes.
One way to think about home weatherization is to think about lunch — would you rather carry it in a cooler or a paper bag?
“If you bring it in just a paper bag, it’s going to be warm by lunchtime,” said Kara Saul-Rinaldi, chief policy officer of the Building Performance Association and CEO of AnnDyl Policy Group. She said insulation is kind of like turning your house into a cooler.
“If you have insulation and you air-sealed your house and it’s well insulated, that it may be able to maintain that temperature. You don’t have to keep cooling it over and over and over again,” Saul-Rinaldi said. But doing that isn’t cheap, which is where the expanded tax credits in the Inflation Reduction Act come into play.
“There’s a $1,200 yearly tax incentive for insulation, air-sealing energy audits,” Saul-Rinaldi said. That’s more than double what the government used to cover.
Tax credits will also cover up to $2,000 for heat pumps. Kristen Hagerty with the Interstate Renewable Energy Council recently had one installed in her Massachusetts home.
“In the summer, they will remove the heat from my house and just move it to the outside. And then in the winter, it’s the reverse,” Hagerty said.
She said her overall energy use has decreased by more than half since installing the heat pump.
But tax credits require people to pay thousands of dollars upfront. Upcoming state-administered rebate programs will address this, said Will Bryan with the Southeast Energy Efficiency Alliance.
“There are specific carveouts for low-income households that I think are designed to overcome some of the barriers that many low-income households face and, particularly, just a lack of upfront capital,” Bryan said.
He said more efficient homes will make heating and cooling cheaper for everyone.
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