The Inflation Reduction Act
How the Inflation Reduction Act Impacts Boulder, CO Homeowners and Business Owners
The Inflation Reduction Act is designed to help homeowners save money while injecting $369 billion into the economy in the form of improving the United States’ clean energy economy. This act allows homeowners who purchase new, more energy-efficient HVAC systems to take advantage of tax rebates (up to $14,000 depending on household income).
The long-term goal is to reduce our energy consumption as a nation for a clean energy future. The IRA makes it possible on a state-by-state level. If you own your home and install a new HVAC system that falls under the stipulations of the Inflation Reduction Act, you stand to improve your energy efficiency, save money, and increase your home’s value all at once.
The Inflation Reduction Act brings challenges and benefits to homeowners. Contact us today to set up an installation for your new HVAC system.
What is the IRA?
The Inflation Reduction Act is a federal law aimed at reducing inflation and promoting better energy efficiency. One section of this law offers rebates for point-of-sale purchases on new energy-efficient home heating and cooling systems. Different systems offer various rebates, most notably among them being heat pumps, which can net you a rebate of up to $8,000. The IRA also calls for an increase in the Investment Tax Credit (ITC) bill regarding solar panel installation, which was set to end in 2023 but has been extended to 2033.
What Do the Rebates Cover?
These rebates cover various HVAC purchases. New heat pump purchases may earn you a rebate up to $8,000, while new heat pump water heaters may earn you up to $1,750. Tax credits will also be available. Air conditioners and furnaces have a maximum cap of $600 in tax credits. Homeowners can also receive up to $1,100 by adding new energy-efficient windows and doors.
How Do I Get My Rebates?
Rebates are not currently being provided at the point-of-sale even though they pertain to point-of-sale purchases. The IRA will be effective until 2031, starting January 1st, 2023. While this is a federal law, it will be implemented at the state level. State governments will be responsible for creating portals and accessible information to claim your IRA rebates which will take time to set up. Follow our blog for updates as more information for Boulder, CO residents becomes available.
With the IRA comes SEER2: a new method of measuring energy efficiency. This impacts the manufacturing of HVAC systems manufactured after January 1st, 2023, effectively increasing prices on brand-new systems. After January 1st, 2023, you won’t be able to purchase systems manufactured on or before December 31st, 2022 due to energy efficiency requirements. New systems will be energy efficient and save you money in the long run, albeit with a higher upfront cost.