Georgia consumers looking to make home improvements to save on energy bills have a menu of new and expanded tax credits to choose from this year.
The credits were included in the Inflation Reduction Act, President Joe Biden’s landmark climate and health care law, that passed last year, and most will remain in effect through 2032.
Electricity production is the second largest source of greenhouse gas emissions in the U.S. Transitioning away from fossil fuels and increasing the energy efficiency of buildings can reduce emissions while saving homeowners money.
The credits are available to anyone making enough to owe federal taxes, while rebates targeted to lower-income Americans for many of the same products and services are scheduled to roll out later this year, state by state. Some households may qualify for both.
But there are some key things to keep in mind:
- There is a yearly cap on tax credits of $3,200 — $1,200 for most building improvements (doors, windows, insulation, etc.) and a separate $2,000 for water heaters, heat pumps and biomass stoves and boilers. There is no lifetime cap, so improvements could be spread over a number of years to get maximum benefit. Make a plan.
- Most but not all of these credits are intended for homeowners making improvements to their primary residence. Renters are technically eligible, but practically it would be difficult for them to take advantage because most of the improvements are not portable.
- New equipment must meet efficiency requirements
- Save those receipts!
Here is a list of products and services eligible for tax credits now:
Credit: Jenni Girtman
Credit: Jenni Girtman
Efficiency
- Home Energy Audit: 30% of cost up to $150
A home energy audit is done by a certified professional auditor who performs an inspection of your home and submits a written cost-benefit analysis for each specific improvement.
Katie Southworth, a consultant with EMV Energy Solutions recommends doing an energy audit before embarking on any costly upgrades to see where consumers can get the biggest bang for their buck. For example, it may be more cost effective to stop energy loss by replacing doors, widows and insulation before investing in solar panels or a new air conditioner.
“Efficiency is almost always the least cost, first measure that comes out of those” energy audits, Southworth said.
Southface, a sustainability nonprofit, recommends the following resources for finding certified home energy auditors in Georgia: BPI (Building Performance Institute); RESNET; ENERGY STAR; Georgia Power HEIP (Home Energy Improvement Program).
Other eligible efficiency upgrades:
- Exterior Doors: 30% of cost up to $500 (max $250 per door)
- Windows, Skylights: 30% of cost up to $600
- Insulation: 30% of cost up to $1,200
Credit: Jenni Girtman
Credit: Jenni Girtman
Heating, Cooling, Water
Home energy bills are some of the highest they’ve been in more than a decade, according to The National Energy Assistance Directors’ Association, which represents the state directors of the Low Income Home Energy Assistance Program. Just as installing energy-efficient doors, windows and insulation can help reduce bills, so too can replacing aging or less efficient home heating and cooling systems.
- Gas Water Heater: 30% of cost up to $600
- Solar Water Heater: 30% of cost
- Hot Water Boiler: 30% of cost up to $600
- Heat Pump Water Heater: 30% of cost up to $2,000
- Geothermal Heat Pump: 30% of cost, no cap
- Air Source Heat Pump: 30% of cost up to $2,000
- Furnace: 30% of cost up to $600
- Central Air Conditioner: 30% of cost up to $600
- Biomass Stoves and Boilers: 30% of cost up to $2,000
Credit: Jason Getz / Jason.Getz@ajc.com
Credit: Jason Getz / Jason.Getz@ajc.com
Electricity
As large utilities struggle to meet the demand for renewable energy, many consumers are exploring ways to install their own power generation and storage. The climate bill includes tax credits for solar panels, wind turbines and battery storage, which could help motivate homeowners whose utility provider, like Georgia Power, has opted not to expand solar incentive programs like net metering.
- Solar Panels: 30% of cost
- Wind Turbine: 30% of cost
- Fuel Cells: 30% of cost
- Battery Storage: 30% of cost
- Electric Panel Upgrade: 30% of cost up to $600
*Sources: Department of Energy, Internal Revenue Service, Energy Star
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