As valued members of our electric cooperative, we want to share information about the new Federal Inflation Reduction Act (IRA) passed last fall and help you leverage its benefits to improve your home's efficiencies. The IRA presents an excellent opportunity to enhance your home's energy efficiency while saving money on taxes and monthly energy expenses.
The IRA was introduced as a response to the economic challenges many Americans face, and it aims to provide financial relief by offering tax credits for energy-efficient upgrades. Most incentives start from improvements made in 2023 and are planned to continue through 2032.
Where to start— it's probably important that you create your own potential energy improvement plan by starting out with a home energy assessment. Crow Wing Power's member service representatives are trained to do home energy assessments and can help homeowners find opportunities for home improvements. Typically home assessments can be done during their slower work demand times (like after summer construction season).
Weather Stripping, Insulation, and Upgrading Doors and Windows: Properly sealing you home against air leaks, insulating, and upgrading energy-efficient windows and doors is a great first step. Measures you take that reduce home energy waste are eligible fora 30% tax credit up to an aggregate maximum credit of $1,200 annually. Example: upgrade exterior doors to high efficient Energy Star® models and get a tax credit of 30% of the cost up to $500. Homeowners can do a little each year and receive the annual credits for the next nine years.
Heat Pumps: Heat pumps, in particular (ASHPs), are becoming very popular because they are three to five times more efficient than other types of heating and cooling methods, thanks to their energy-efficient heat transfer technology. The IRA allows you to tax credit up to $2,000 annually and costs can include labor for installation of heat pumps.
Solar Panels and Renewable Energy: Investing in solar panels or other renewable energy sources are eligible for 30% tax credits.
Electric Vehicle Purchases: There are new federal tax credits for both new and used Evs. They are tied to MSRP, income eligibility and other requirements. Minnesota has not solidified its 2023 EV rebate plan yet.
Yet to come, Income-eligible instant rebates: At the end of July, States were able to begin applying for funding from the IRA when they submit their plan for income-eligible rebates. Depending on Minnesota's plan, low to moderate income families may soon be able to get efficiency improvements at little or no cost.
Head over to Programs and Rebates for detailed information. We'll communicate updates on this legislation as it becomes available. Connect with a qualified tax preparer to determine if you could take advantage of tax credits.