Answer: As of Jan. 1, customers can receive an Energy Efficient Home Improvement credit of up to $3,200 each year, depending on their income. Equipment upgrades such as heat pump water heaters, heat pumps for space conditioning and HVACs have a total yearly credit limit of $2,000. Building envelope measures and home energy audits have an annual credit limit of $1,200. These are yearly limits through 2032 — not one-time limits — so your customer can do another project next year and receive a new set of tax credits for it.
As with all tax credits, your customer won’t see the impact on the bottom line until they file taxes the following year. But by making sure customers are aware of these credits, you can incentivize them to consider more comprehensive upgrades that will help deliver energy savings now and for years to come.
Find more detailed info from the IRS.
What products are eligible for the Energy Efficient Home Improvement Credit?
- Air source heat pumps
- Heat pump water heaters
- Electric panel upgrade
- Central air conditioners
- Furnaces
- Natural gas water heaters
- Home energy audits
- Windows and skylights
- Insulation materials and air-sealing materials
- And more
The full list of eligible measures and minimum efficiency requirements is available on Energystar.gov.
Is there a tool to help me understand what credits and incentives a customer may be eligible for?
Yes! Rewiring America’s savings calculator is a great tool that contractors can use to input a customer address and estimated income to generate potential tax incentive amounts. You can use this as part of your sales process.
Note: While GoGreen Financing tries to share the most relevant, accurate information with you that we can, we are not tax experts. Please refer to IRS.gov and/or local regulations for specifics and a complete understanding of the Inflation Reduction Act, tax credits and other legislative details.