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A homeowner's guide to the Inflation Reduction Act tax credits and rebates
The Inflation Reduction Act (IRA) is historical legislation passed into law in 2022 that provides almost $8.8 billion in funding over 10 years to US homeowners to accelerate and help defray the cost to electrify your residence.
As a homeowner, and in some cases a renter, you can leverage federal programs to cover purchase and installation costs for a variety of electrification projects, from transitioning to solar, installing an EV charger in your home, converting to heat pump-based HVAC, upgrading your home’s wiring or loadcenter or switching to electric appliances.
The financial incentives available for consumers, generally fall under two categories -- federal tax credits and rebate programs administered by individual states.
Read on to learn more about these opportunities to save and how to take advantage of them.
Tax credits: 25C-Energy Efficient Home Improvements | 25D - Clean Energy | 30C - EV Charging
Tax rebates: Home electrification and appliance rebates | Home efficiency rebates
Apply: How to apply for a rebate
Learn about the federal tax credits and state rebates through the Inflation Reduction Act can help cover the startup costs to electrify your home.
The 30C Alternative Fuel Infrastructure Tax Credit, or more simply, the EV charging credit, provides a tax credit for up to 30% of the total cost of installing an electric vehicle (EV) charger at your home. The tax credit is capped at $1,000.Eligibility for the tax credit is based in part where you live a rural (non-urban) or low-income area. Use the search tool in the top right of this locator map from the Department of Energy to see whether your residence meets the requirements.
As with the other federal tax credits , it reduces the federal taxes you owe—you cannot receive the credit as a refund.
Take advantage of the federal programs and upgrade your electrical system’s safety.
The rebate portion can be stacked with federal tax credits to maximize your savings to transition to an electrified home. Importantly, the Home Energy Rebates program provides point-of-sale discounts for your electrification projects. There is no waiting to file your taxes, you’ll receive your savings upfront. The rebate programs described below are administered by the states individually and may differ state to state and will be available on separate timelines.
Consult the Department of Energy’s tracker for the status of these rebate programs in your state.
Home Electrification and Appliance Rebates are recommended when you’re upgrading equipment and appliances in your home, especially if your household income is similar to or below the average in your area. These rebates can provide households with up to $14,000 in assistance, covering up to 100% of costs for lower-income families and up to 50% for moderate-income families.
Your state will determine which products are eligible, and you could save up to the following amounts:
Home Efficiency Rebates are recommended when you’re taking a comprehensive set of actions to reduce your energy usage. All households are potentially eligible, with the largest rebates going to those with lower incomes.
You can save up to $8,000 depending on your household income and project’s energy savings. Your project will need to reduce your home's energy usage by at least 20 percent. These rebates are part of a broader initiative to encourage energy efficiency and sustainability within homes, providing significant financial assistance to those who embrace these eco-friendly upgrades.
The rebates from this program are, in part, dependent on the energy savings you can demonstrate through the upgrades you made. A home energy audit is great way to quantify the efficiency of those improvements. And the Tax Credit 25C -- Energy Efficient Home Improvement Tax Credit can defray the cost of your audit up to $150. Pro tip, check with your electric utility. They may offer no-cost energy audits.
Nearly $9B in tax credits and rebates can help fund your home electrification projects. Learn how the Inflation Reduction Act can help make your home more sustainable.
This table summarizes your potential savings by income through the state rebate programs.
Use this convenient tool to find the median income in your area to better gauge the savings you may be eligible.
| Type of home energy project | Maximun allowed rebate amount per household below 80% Area Median Income (AMI) | Maximum allowed rebate amount per household above 80% Area Median Income (AMI) |
| Home efficiency project with at least 20% predicted energy savings | 80% of project costs, up to $4,000 | 50% of project, up to $2,000 (maximum of $200,00 for a multifamily building) |
| Home efficiency project with at least 35% predicted energy savings | 80% of project costs, up to $8,000 | 50% of project costs, up tp $4,000 (maximum of $400,000 for a multifamily building) |
| Home electrification and appliance rebate (only households with an income below 150% AMI are eligible) | 100% of project costs up tp technology cost maximus, up to $14,000 | 50% of project costs, up to technologu cost maximums, up to $14,000 (households with incomes above 150% AMI are not eligible) |
Is your home’s electrical system—the loadcenter and wiring—up to the task to support an electrified future? If it is older, it may have a loadcenter that can handle a maximum of 60 or 100 Amps. Depending on the size of your home and your electrical requirements for your planned upgrades, it might be possible to electrify everything with 100 Amps, but you might need an upgrade.
In addition to your electrical panel, your home's wiring plays a vital role in enabling full electrification. While some appliances, such as 120V heat pump water heaters and 120V window-unit heat pumps, can be plugged into standard outlets, many others necessitate 240V outlets. This requirement is particularly crucial for electric vehicle chargers, induction stoves, and most heat pumps and heat pump water heaters.
When upgrading your panel or hiring an electrician for any electrification project, it's an ideal opportunity to install extra dedicated circuits and outlets for future appliance electrification plans.
The Inflation Reduction Act can help with the cost to purchase and install your electrical system upgrades if they are completed in conjunction with an approved electrification project, such as adding solar panels, new electrical appliances or an EV charger.
You may be eligible for a tax credit valued at up to 30% of the cost paid by the consumer, up to $600. Subject to a cumulative annual cap of $1,200. In addition to loadcenters, this includes costs of electrical components needed to support residential energy improvement, including sub-panelboards, branch circuits, and feeders if they meet the National Electric Code and have a capacity of 200 amps or more.
This project may be eligible for either:
A home electrification and appliance rebate of up to $2,500, or
A home efficiency rebate, which provides up to $8,000 off projects that significantly reduce household energy use.
From our partners at Rewiring America, download this convenient guide to everything you need to know and how to maximize your electric savings
Your state, territory, or Tribe manages rebates for energy efficiency and appliance upgrades. They will determine which products are eligible for rebates. Visit the Department of Energy’s rebate page for the status of rebate programs in each state.
The Eaton Certified Contractor Network (ECCN) connects you with your local licensed residential electrician trained by Eaton with the latest best practices and product technology. With their knowledge and dedication, you can be sure that your electrical project will be completed safely and efficiently.
