Two new federal rebate programs will offer unprecedented support for certain types of home electrification projects!
Article updated October 1, 2024
Major Rebates for Home Upgrades
The IRA has designated $8.8 billion for the Department of Energy’s (DOE) Home Energy Rebate programs, which are expected to launch in California in late 2024. These programs aim to make home electrification and energy efficiency upgrades more affordable.
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Home Electrification and Appliances Rebates (HEAR Program)
If your household earns less than 150% of the Area Median Income (AMI), you could be eligible for up to $14,000 in rebates, including:- Heat pumps – up to $8,000
- Electrical panel upgrades – up to $4,000
- Heat pump water heaters – up to $1,750
- Additional incentives for other energy-saving appliances
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Home Efficiency Rebates (HOMES Program)
The HOMES program offers rebates ranging from $2,000 to $7,000 for energy-saving retrofits. The amount depends on the percentage of energy savings, with greater rebates available for those earning less than 80% of AMI.
🔍 Look up your Area Median Income (AMI) here.
Combining Rebates and Tax Credits for Maximum Savings
The IRA's rebate programs can be combined with the Energy Efficient Home Improvement Credit (the 24C tax credit), offering significant cost reductions for home upgrades. Here's how it works:
- DOE rebates (like those from the HEAR or HOMES programs) are applied as discounts to the purchase price of eligible appliances or home improvements. These rebates are not taxable.
- After applying the rebate, you can claim the 25C tax credit on the reduced cost of the upgrade. For example, if you receive a $2,000 rebate on a $5,000 heat pump installation, your tax credit would apply to the remaining $3,000. With the 25C tax credit covering 30% of eligible costs, you could get a credit of $900, further reducing the cost to $2,100.
Important limitations:
- The HEAR and HOMES rebates cannot be combined with each other or other federal grants for the same project.
- The combination of rebates and tax credits cannot exceed the total cost of the project.
For more information on the rebate programs and how to qualify, read the article "IRA Rebates for Home Efficiency and Electric Appliances."
Start Planning Now
Although the rebates won’t be retroactive, it’s smart to start planning your projects now. QuitCarbon will keep you informed of state-specific details and help you take full advantage of the savings once these programs launch. Reach out to our team to get started on your path to an electrified, energy-efficient home.
