Guide to the Inflation Reduction Act: How to Save Money and Go Green

Guide to the Inflation Reduction Act: How to Save Money and Go Green

The Inflation Reduction Act (IRA), coupled with MCE’s incentives, make going green affordable in all areas of your life. Learn about the following incentives:
  • Solar panels and battery storage
  • Home envelope improvements
  • Upgrades to energy efficient, electric appliances
  • Electric vehicles (EVs)

The 2022 Inflation Reduction Act (IRA) delivers incentives for people to go electric and become more energy-efficient users. The act has been likened to an “electricity bank account” that you can spend to upgrade appliances and vehicles and insulate buildings. This blog summarizes the tax credits. Rebates are not available until 2024.

Solar Panels and Battery Storage Systems

The IRA has no limit on how much homeowners can claim when buying solar panels and battery storage systems. Homeowners who have purchased solar panels and battery storage since 2022 are eligible for a 30% credit on the price of their system (batteries have to have a 3-kilowatt-hour (3kWh) capacity). The tax credit decreases after 2032. After 2033, it’s 26% and, after 2034, it’s 22%.

MCE Bonus: If you have solar panels, MCE’s Net Energy Metering Program offers credits for excess generation at full retail rates that will be automatically applied toward future electricity usage.

Home Envelope Improvements

These improvements are for insulation treatments for your home. The IRA provides a 30% credit for insulation, windows, skylights, and exterior doors (with varying maximum amounts).

MCE Bonus: MCE’s home energy saving program offers home envelope improvements to qualifying single-family homeowners and renters which may include attic insulation, duct sealing, and pipe insulation.

Appliance Upgrades

Heat Pump Water Heaters: Residents can receive up to a $2,000 credit toward a heat pump water heater. Those who meet the income requirements are prioritized for the credits. Credits also include $4,000 to upgrade a home’s breaker box.

Heat Pump HVAC: You can get a credit of 30% of costs, including labor, up to $2,000. If you buy a heat pump water heater and HVAC in the same year, the credit is $2,000 for both, so staggering the purchases might make sense.

Heat Pump Dryers: If you buy a heat pump dryer, you can get an $840 rebate. Heat pump dryers use around half the energy compared to conventional dryers.

Electric Cooking: You can get an $840 rebate for electric upgrades to stoves, cooktops, and ranges.

MCE Bonus: Multifamily property owners and qualifying homeowners and renters can apply for comprehensive energy assessments and energy-saving upgrades through MCE’s multifamily and home energy saving programs. Additionally, contractors can apply for a $1,000 rebate when they install a heat pump water heater.

Electric Vehicles (EVs)

IRA credits apply to new and used cars bought at a dealership. Beginning in 2024, you can transfer your credit to the dealer to receive a reduction on the purchase price. The credit offers up to $7,500 for a new, qualified vehicle purchase up to $4,000 or 30% for used vehicles and up to $40,000 for vehicles over 14,000 pounds.

MCE Bonus: MCE provides a $3,500 rebate for new EVs and a $2,000 rebate for used EVs. MCE also offers EV charging incentives to property owners for up to $3,500 per each EV charging port. EV drivers can increase their savings with the MCE Sync smart charging app.

Given the broad range of incentives available from the federal government and MCE, now is the perfect time to plan to upgrade your home and vehicle. Don’t miss out!

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