Tax incentives and rebates can seem a little confusing, so we’ve narrowed down the information enough to get a good idea of what you should know to ask your design-build home remodeler further questions to understand what incentives for which you can qualify.
Signed into law in August of 2022, part of the Inflation Reduction Act aims to help homeowners remodel and design homes for energy efficiency while saving costs on those projects. Here are the most relevant takeaways from the Act that affect your remodeling plans.
Many California homeowners recognize the benefits of installing an electric car charging station right in their homes. This is especially true as more Californians are buying electric vehicles and as dealerships will begin to phase out fossil fuel-powered cars altogether by 2035. Under the Inflation Reduction Act, you could receive a tax credit of 30% of the hardware and installation cost or up to $1,000 with the Alternative Fuel Refueling Property Credit.
In addition to the federal credit, there are incentives at the state level as well as with individual utility companies. Check the Enel X website for the full list of rebates and incentives and call your utility provider for more information. As for the energy capacity, your home will require, see the section below about in-home EV charging stations.
Within the Inflation Reduction Act is the Residential Clean Energy Credit, which is an extension of an older credit, the Residential Energy Efficient Property Credit. The old credit was to expire in 2024 and was only worth 26% of product and installation costs, but the newer version will extend through 2034 and starts at a higher percentage.
The new credit amount jumps to 30% from 2022 to 2032, falls to 26% for 2033, and then 22% for 2034. The credit covers alternative power sources, including battery storage technology with the capacity of at least three-kilowatt hours. We’ll discuss more about what size solar power system you should consider for your size home below.
Under the Inflation Reduction Act, middle-income families may be eligible for rebates for energy-efficient appliances and energy-efficient upgrades totaling no more than $14K overall. A heat pump, range, insulation, and ventilation improvements are some of the items that qualify under the rebate program.
Tax credits and rebates are a great place to start when it comes to saving money on making your home more energy efficient. There are also other ways to save with energy efficiency during your home remodel.
It’s likely clear how a solar power system will save you on utility costs over time. If you choose a solar power system that can generate enough power to cover all of your utility costs most months, you can also sell your solar power back to the grid via credits, which you can use when your home isn’t getting the sun to generate enough power for your whole home. Then, if you haven’t used all of the energy you produced after 12 months, you can earn credit toward your bill, which will likely cover the utility fee if you already don’t use energy from your utility provider. This is all stated in the California Assembly Bill 920.
If you’re interested in remodeling your home, starting in 2023, you will be required to add solar power panels to your home. You have the option to include battery storage, although it’s not required. However, you will reap the financial rewards if you do.
During your remodel, it’s a good idea to have an EV charging station installed in your garage in preparation for the changes coming in the next few years. If you already have an electric vehicle, you’ll appreciate the convenience. If you don’t, you will soon, and handling the task of making sure your home can support the electrical output will save you the headache of doing this later.
You should have your remodeler increase your home’s electric capacity by at least 200 amps. An at-home EV charging station will typically require a 240V/40A dedicated circuit, comparable to a large appliance's power. This voltage will provide your EV 10-20 miles of driving per hour of charging. Paired with a sufficiently sized solar power system, your home, and your car can all be run off of electricity you generate right in your own home.
The requirements that have begun to take hold from 2020 and beyond will affect how you approach your home renovations. You’ll need the right team to guide you through these requirements and others that will come into play in the future. Imagine Remodeling is a design-build firm in Fresno that’s well-versed in what you can do to make sure your home meets ongoing requirements as well as planning for a remodel that gets you the best tax incentives possible. Contact Imagine Remodelers to start planning your energy-efficient remodel today.