Here’s why Shrewsbury property owners should care about the Inflation Reduction Act of 2022: It’s an opportunity. Signed into law in August 2022, the Inflation Reduction Act (IRA) provides tax credits and rebates to encourage Massachusetts homeowners to replace older appliances with high-efficiency equipment that does a better job at a lower operating cost.
Control Point Heating • Cooling • Plumbing • Electric can help pinpoint areas in your home or business where you can save money and reduce your carbon footprint, allowing you to use the best tax credits and rebates.
The Inflation Reduction Act extends and expands the existing Energy Efficient Home Improvement Credit (Section 25C) and the Residential Clean Energy Credit (Section 25D) to homeowners.
Projects installed between January 1, 2023, and 2032 quality for a 30 percent tax credit:
Tax credit capped at $600
Tax credit capped at $2,000
Tax credit capped at $600
Uncapped 30 percent tax credit on purchase and installation
Uncapped 30 percent tax credit on purchase and installation
If you installed rooftop solar in 2022, it is eligible for the new, 30 percent 25D tax credit. If you installed a heat pump in 2022, it is eligible for the old 25C tax credit, or 10 percent of costs up to $300.
Here is a closer look at HVAC products and eligibility requirements:
The Inflation Reduction Act set aside a $4.3 billion budget, with the money allocated to individual states for disbursement. Funding will vary from state to state, and eligibility is income-based.
For example, the High-Efficiency Electric Home Rebate Act covers 100 percent of electrification project costs (up to $14,000) for low-income households and 50 percent of costs (up to $14,000) for moderate-income households.
Here’s how some of those rebates would work:
for an electric clothes dryer
for upgraded electric wiring
for an upgraded breaker box
for a heat pump for space heating
for insulation, air sealing, and ventilation
for an electric stove, cooktop range, or oven
for an electric clothes dryer
The rebate program is not available to all households. Because the funds are being allocated to state offices, and each state gets to decide to a certain degree how to distribute the money, it will take some time to fully implement the rebate program.
The tax credits, in contrast, are in place right now and will continue to be for the next decade.
Upfront costs are typically the biggest obstacle to upgrading your heating and cooling system. The Inflation Reduction Act of 2022 overcomes that barrier.