Have you been considering some home improvements, but you’re worried about your budget? A new air conditioner, water heater, solar panels, double-pane windows — it all adds up quickly.

But what if we told you that there were government initiatives in place that could help you save big on these investments?

The Inflation Reduction Act, signed into law in 2022, is an exciting piece of legislation designed to help homeowners save money on home energy improvements!

It includes two key provisions:

1. The High-Efficiency Electric Home Rebate Act (HEEHRA)
2. The Home Energy Performance-Based, Whole-House Rebates (HOME Rebates)

These long-winded titles may sound intimidating, but they boil down to one simple idea: You can get money back when you make energy-efficient home improvements.

At Lee Company, we want to help you navigate these new opportunities and make the most of your home energy rebates.

While we’re certainly not tax professionals, we have over 80 years of experience helping our customers make their homes more comfortable and energy efficient. So below, we’ll deep dive into both of the Inflation Reduction Act’s key provisions. We’ll also explore how homeowners in Tennessee, Kentucky, Alabama, and Georgia can take advantage of these energy and cost-saving programs.

***Lee Company is not providing tax advice. The content on this webpage has been prepared for informational purposes only. You should consult a tax professional if you have questions regarding federal tax credits.

Understanding the Inflation Reduction Act

Picture a sweltering day in the summertime. The sun beats down and your air conditioner is running full tilt. Before you know it, your electricity bill comes flying through the mail slot with a jaw-dropping balance.

This is exactly why many homeowners in our part of the country are installing heat pump systems — they’re more efficient and cost less to operate. Plus, they serve as both an AC and heating system, so your indoor climate can be comfortable year-round.

But of course, heat pumps can be a pricey investment. You might want to add zoning or a smart thermostat to maximize your energy efficiency, too. So the cost of installation continues to rise…

That’s why the Inflation Reduction Act is so important — it helps offset your initial cost with tax credits and energy rebates.

But what is the Inflation Reduction Act? And is it only for heat pumps?

The Inflation Reduction Act (IRA) is a piece of federal legislation that was signed into law in 2022. It’s a tax credit program that promotes energy efficiency and conservation by incentivizing homeowners to make energy-saving home improvements.

Under the act, homeowners who install high-efficiency electric home systems could receive up to $2,000 in tax credits. The program will offer $43 billion in IRA tax credits over the next 10 years!

The IRA covers a lot more than just a heat pump. Qualifying expenses include energy-efficient:

• Air conditioners
• Biomass stoves
• Boilers
• Exterior doors
• Furnaces
• Heat pumps
• Home energy audits
• Insulation materials
• Skylights
• Solar equipment
• Water heaters
• Windows

For 2023 through 2032, you can claim 30% of the cost of these upgrades, up to a maximum of $1,200 annually, except biomass stoves and boilers. They each have their own separate limit of $2,000.

But know that those dollar amounts are not the limit on what you can claim. We’ve only scratched the surface…

You may also be eligible for additional rebates through the other programs we mentioned: the High-Efficiency Electric Home Rebate Act and the Home Energy Performance-Based, Whole-House Rebates.

So let’s take a look at your options there…

Exploring the High-Efficiency Electric Home Rebate Act

The High-Efficiency Electric Home Rebate Act (HEEHRA), a part of the Inflation Reduction Act, is a voluntary program that offers consumer rebates. The goal of this rebate program is to make it easier for low and moderate-income households to electrify their homes.

The benefits of HEEHRA are pretty darn impressive:

• It covers 100% of electrification project costs up to $14,000 for low-income households.
• It covers 50% of costs up to $14,000 for moderate-income households.

A wide range of qualified projects are included:

• Air sealing
• Circuit panels
• Electric stoves and cooktops
• Heat pump clothes dryers
• Heat pump HVAC systems
• Heat pump water heaters
• Insulation
• Ventilation
• Wiring

The HEEHRA program will help homeowners across the country save money, create a better quality of life, and reduce carbon emissions.

Now, let’s bring it home to the Southeast because the HEEHRA program is particularly beneficial for homeowners in our region.

With our hot summers and cold winters, your home is constantly fighting to maintain a comfortable temperature. And everything from your insulation to your water heater and your HVAC system can make a difference.

By investing in energy-efficient systems, you can significantly reduce your energy consumption and costs.

Here’s a snapshot of how programs like this can impact homeowners in the Southeast:

• Lower Energy Bills: Implementing energy efficiency measures can lead to substantial savings for the average household, with potential reductions of approximately 25% on utility bills, resulting in annual savings of about $2,200.
• Healthier Homes: Energy-efficient systems can lead to cleaner air inside the home, reducing health issues like respiratory diseases, asthma, and allergies that can be caused by indoor air pollution.
• Job Creation: HEEHRA’s efforts in expanding residential electrification will create a multitude of installation job opportunities, providing a significant boost to our local economy. In fact, we’re hiring technicians and installers at Lee Company right now!

Remember, the HEEHRA program is a voluntary one, and the policy provisions to implement it are still being put in place in many states.

So while you’re planning your next home improvement project, keep an eye out for updates on this exciting initiative.

In the meantime, if you’re considering a future home energy upgrade, you might want to put it on your to-do list for late 2023 or early 2024, when all of the IRA’s incentives take effect. This way, you can maximize your benefits and make your home more energy-efficient without breaking the bank.

Unpacking the Home Energy Performance-Based Whole Home Rebate Program

The Home Energy Performance-Based Whole Home Rebate Program, also known as the HOMES Rebate Program, is a part of the Inflation Reduction Act. It’s designed to incentivize homeowners to make energy-efficient upgrades to their homes.

The goal (like all these other programs) is to reduce energy usage, improve home performance, and ultimately, save you money on your energy bills.

How does this program work? Well, the HOMES Rebate Program is performance-based. This means that the amount of rebate you receive depends on how much energy you save through your home upgrades.

For instance, if your retrofit reduces energy use by 20% or more, you could receive up to $2,000. If you achieve a 35% reduction or more, you could receive up to $4,000.

Here’s the cherry on top: if you’re a low- or moderate-income household, these maximum amounts are doubled. That means you could receive rebates of up to $8,000!

Now, the percentage of project costs that can be claimed as a rebate varies by income and building type:

• For single-family homes and multifamily buildings, if the income is 80-150% of the area median income, up to 50% of project costs can be claimed.
• For single-family homes and multifamily buildings, if the income is less than 80% of the area median income, up to 100% of project costs can be claimed.

Here’s a handy calculator to see what you might qualify for.

There are specific rebate amounts for different types of energy-efficient installations, such as:

• Heat pump water heater: Up to $1,750
• Heat pump for space heating & cooling: Up to $8,000
• Electric stove, cooktop, range, or oven: Up to $840
• Heat pump clothes dryer: Up to $840
• Electrical load service center upgrade: Up to $4,000
• Insulation, air sealing & ventilation: Up to $1,600
• Electric wiring: Up to $2,500
• Installation: Up to $500

All of them offer home upgrades at a reduced cost or no cost at all, which means you can experience real savings on your energy. So if you want to make a difference to your wallet and the environment too, the HOMES Rebate Program is the way to go!

State-Specific Information

While all of these programs are national initiatives, they are being distributed by each individual state. So in order to take advantage of the benefits, you’ll want to confirm that your state has rolled out the program.

Here are some quick links for homeowners in Tennessee, Kentucky, Alabama, and Georgia:

• Tennessee residents should visit the Department of Environment and Conservation page here for the latest information.
• Kentucky residents can check out the Kentucky Energy and Environment Cabinet page here.
• Alabama residents should visit the Alabama Department of Economic and Community Affairs website here for more information.
• Georgia homeowners can get more information about their state’s energy efficiency programs here.

How Lee Company Can Help You Claim These Credits & Rebates

At Lee Company, we’re not just about providing top-notch home services — we’re about helping you make the most of your home and budget. We can guide you through the process of making energy-efficient upgrades to your home that not only improve your comfort and reduce your energy bills but also qualify for these valuable incentives.

Here’s how we can help:

1. Expert Advice: Our team can provide advice on the best energy-efficient upgrades for your home, taking into consideration your specific needs and the potential for rebates and credits.
2. Quality Installation: We ensure that all installations are done correctly and meet the requirements for the rebate programs.
3. Ongoing Support: Even after your installation is complete, we’re here to provide ongoing maintenance and support to ensure the greatest efficiency for your energy-efficient upgrades.

We’ve already helped countless homeowners in Tennessee, Kentucky, Alabama, and Georgia save money by installing energy-efficient systems.

At Lee Company, we believe in the power of energy efficiency — for your wallet, your comfort, and the planet.

Whether you need to upgrade your heating and cooling, plumbing, or electrical, we’re here to help. And with our Home Maintenance Plan, you can keep your major home systems in shape with four visits every year at one low price.

Ready to make your home more energy-efficient and take advantage of these valuable rebates and credits? Contact Lee Company today, and let’s get started on your home’s energy transformation in Tennessee, Kentucky, Alabama, and Georgia!