Incentives under the Inflation Reduction Act for Home Energy Efficiency
What is the Inflation Reduction Act?
The Inflation Reduction Act (IRA) is a federal law that provides roughly $370 billion for national investments in clean energy and energy efficiency, including programs to help households and taxpayers upgrade their homes to save money and reduce energy use. By reducing our energy consumption and expanding clean energy sources, these investments will make our air cleaner and help solve climate change.
Rebates for Residents to Improve Home Energy Efficiency
The IRA created two rebate programs under the federal Department of Energy to assist households with energy-efficient home upgrades. The Home-Owner Managing Energy Savings (HOMES) program will provide incentives for whole-home energy savings upgrades, while the High-Efficiency Electric Home Rebates (HEEHRA) program will provide point-of-sale discounts to consumers for certain high-efficiency electric appliances and energy efficiency products. DOEE will receive funding from the Department of Energy to manage both HOMES and HEEHRA and oversee the distribution of rebates within the District. The amount and availability of a rebate will depend on household income, as specified under the law.
Rebates from the Inflation Reduction Act are not currently available, and DOEE does not know when rebates will become available to District homeowners. The federal Department of Energy is currently conducting public outreach to develop the rules and requirements for the program. Additional information can be found at energy.gov.
Register to receive email updates from DOEE about when the rebates will become available.
Right now, the DC Sustainable Energy Utility offers other incentives for home energy efficiency. Information about those incentives, which are distinct from the HOMES and HEEHRA rebates, can be found on the DCSEU website.
The District also offers other forms of assistance to residents and homeowners to reduce energy use and save money on utilities. Additional information can be found on frontdoor.dc.gov.
Tax Credits for Home Energy Efficiency
The Inflation Reduction Act extended some tax credits and created new ones to help households with energy-efficient home upgrades. Many of these credits are effective starting in calendar year 2023. Tax credits are managed by the Internal Revenue Service (IRS) and taxpayers must claim credits when filing their annual tax return.
Information about tax credits can be found at the following links. Please consult a financial or tax advisor for further assistance.
Frequently Asked Questions
What is the difference between a rebate and a tax credit?
A tax credit is a dollar-for-dollar reduction in the amount of federal income tax paid. That is, a tax credit can reduce the amount of taxes owed or can increase your tax refund. Taxpayers must claim credits when filing their annual tax return with the Internal Revenue Service. DOEE does not have a role in administering tax credits. Please consult a financial or tax advisor for further information on claiming tax credits on your return.
A rebate is a discount associated with the purchase of a specific product or service and can occur either as a point-of-sale discount or as a partial or full refund after proof of purchase is submitted. DOEE will be managing and overseeing the distribution of HOMES and HEEHRA rebates within the District.
Am I eligible for a tax credit for an appliance that I've already purchased or an upgrade I’ve already made to my home?
Many of the credits extended or created under IRA are effective starting in calendar year 2023. Please consult a financial or tax advisor for further information about claiming a tax credit on your annual tax return for a past purchase.
Am I eligible for a rebate for an appliance I’ve already purchased or an upgrade I’ve already made to my home?
It is unknown when rebates will become available to District homeowners. At this time, the Department of Energy has not specified if or how rebates can be provided retroactively. It is possible that the rebates will not be available for past purchases.