5 green home improvements to start taking advantage of in 2023

If you’ve been thinking about making green improvements to your home, 2023 might just be the year to make it all happen. In August of 2022, Congress passed the Inflation Reduction Act, legislation designed to lower energy costs and support a clean energy economy across the United States.

Over the next 10 years, increased tax credits will help lower costs for families and provide financial incentives designed to make it more affordable for people.

The following are five types of green home improvements to consider making this year.

In recent years, homeowners have received an extension on tax credits for installing solar energy systems for their homes. The solar investment tax credit (ITC) was originally set to drop from 26 percent to 22 percent this year before expiring in 2024.  However, the Inflation Reduction Act extended the credit, increasing it to 30 percent, which is where it will stay until 2032.

The median cost to install solar panels in North Carolina is around $30,000. The ITC would reduce the federal income tax you owe by matching your solar investment dollars, up to 30 percent, which could provide $9,000 in tax savings, which is $1,200 more than in previous years. In addition, Forbes reports the average household in North Carolina would save approximately $1,503 per year in power bills, and it would take less than 7 years to break even on the investment.

North Carolina also offers state rebates and incentives to encourage homeowners to make the switch. Through the Residential Clean Energy Credit, Duke Energy offers bill credits as well as a one-time rebate within 90 days of installation. North Carolina residents may also be able to claim an 80 percent property tax exemption for the appraised value of your system.

Geothermal technology uses the earth a few feet below the surface to heat and cool your home, instead of producing it from nonrenewable resources. The Inflation Reduction Act increased tax credits for this technology to 30 percent until 2032. The national average for this type of system is approximately $25,000, which can provide over $7,000 in tax credits.

With geothermal technology, homeowners are also eligible for credits, rebates and savings.

If you don’t want to invest thousands of dollars up front, you can still make small improvements that can make a huge difference. The Inflation Reduction Act allows for a 30 percent credit for upgrading to energy-efficient windows, insulation, heat pumps, doors, and more.

It’s good to know that there’s a cap each year, but that cap will reset again in 2024. Be sure to spread your projects out over time to maximize your savings.

If you begin to take advantage of upgrades on your home that will help you save costs, it’s time to put it to the test. The Inflation Reduction Act allows for rebates of up to 50% of the cost of the project, or up to $4,000, if you’re able to reduce your energy consumption. This is known as the Home Owner Managing Energy Savings (HOMES) rebate.

What’s more, lower-income households can get even higher rebates to help those families save even more.

If you’re a low- or middle-income family who wants to go all electric, the High-Efficiency Electric Home Rebate Act (HEEHRA) encourages homeowners to install heat pumps, electric appliances, and even electric panels and wiring for up to $14,000 in rebates.

This rebate is limited to homeowners who make up to 150 percent of their area median income or less. The HEEHRA rebate cannot be combined with the HOMES rebate.

It’s never been more cost-effective to take advantage of green energy solutions. With assistance from the Inflation Reduction Act, you could enjoy big savings and more peace of mind before the year is even over.

The Jim Allen Group provides access to information on this blog/website as a public service for educational purposes only. Although reasonable efforts have been made to ensure that all of the information made available is current, accurate, and complete…[read more]