Signed into law on August 16, 2022, the IRA includes billions in investments intended to lower energy costs, promote widespread investment in clean energy, and make clean energy technologies more accessible to Americans. Many of the benefits for individual households come in the form of tax credits or rebates. The incentives are not reserved for homeowners, but changing the energy infrastructure of a home will likely require the support of a building’s owner. For more information, see this article from Vox for information on how renters can benefit from the IRA.
IRA Tax Credits are available now by filling out the corresponding IRS form when filing taxes. Tax credits reduce what you owe in taxes. If your tax burden was going to be $5,000, but you qualify for $2,000 in tax credits through the IRA, you would then only owe $3,000. The IRA tax credits have no lifetime limit and can be claimed every year that the IRA funding keeps the program running. You can not get cash back for IRA tax credits (they are nonrefundable). For a more comprehensive explanation of available energy-related tax credits, consult the IRS webpage.
IRA Rebates, which are refunds for part or all of the cost of energy upgrades, are still being organized by the State of Alaska and will likely be available in early 2024. Rebates will be paid to a customer during the transaction, not when they file taxes. Most of the rebates are designed for households that are under 150% of the area median income (AMI). In addition, some funding through the HOMES program is open to households of any income that pursue certain kinds of energy-saving retrofits. The number of rebates is expected to be limited and it is not yet known how competitive it will be to access this benefit. Total rebates are limited to $14,000 per household. Alaska Housing Finance Corporation and Alaska Heat Smart will have information about how to claim the rebates as they become available.
Nonprofit and private organizations in Southeast Alaska are also providing technical support, financial incentives, and financing to support households transitioning to clean energy technologies or improving their energy efficiency.
To best understand the incentives you may qualify for and how you might use them, we recommend you start by estimating your percentile area median income and requesting a free home heat pump assessment from Alaska Heat Smart. In an assessment, Alaska Heat Smart will make a report that includes a home’s current heating needs, identifies existing issues and potential improvements, provides guidance on collecting and analyzing bids from local contractors for heat pump systems, and shares information on financing and incentives.
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