Access Inflation Reduction Act tax credits when you make energy-efficiency improvements to your home.

Need a nudge to make energy-efficient upgrades to your home? With up to $8,000 in tax credits and rebates available, now is an excellent time to do everything from adding insulation to replacing that old oven. Thanks to the federal Inflation Reduction Act (IRA), multiple tax credits and rebates designed to accelerate the deployment of clean energy can be accessed by homeowners.

Qualifying clean energy expenses

Some IRA incentives are available for all homeowners while others are income-based. There’s no household income limit up to $4,000 in rebates for electric appliances and home retrofits. Low-income households can access up to $8,000 in rebates.

Here are the 2023 savings opportunities:

• Rooftop solar tax credit—tax credit for 30% of equipment and installation cost
• Insulation, air sealing and energy audits—up to $1,200 tax credit
• Electric heat pump clothes dryer—up to 100% of cost
• Electric stove or oven—up to 100% of cost
• Energy-efficient windows and doors—up to $1,200 tax credit
• Breaker box and electrical wiring upgrades—tax credit for 30% of equipment and installation cost
• Electric vehicles—this $7,500 tax credit isn’t limited to homeowners; get details here
• Heat pump for heating and cooling your home—tax credit for 30% of equipment and installation cost (Yes, a heat pump can warm a Michigan home; see how heat pumps work in cold places.)
• Heat pump water heater—tax credit for 30% of the cost of buying/installing a heat pump and up to $2,000 for electrical upgrades to make the home heat-pump-ready

Plus, energy-efficient upgrades will help lower monthly utility bills.

To get a more accurate view of how much your household could save with IRA incentives, check out the Rewiring America calculator.

What homes are eligible

Clean energy tax credits are available for your primary residence. A second home used as a residence may qualify. However, you can’t take the tax credits for property rented to others. Renters may be able to claim credits for purchases of energy-efficient appliances.

How to get the credits

Tax credits are a dollar-for-dollar reduction to your income tax bill. Homeowners need to document their purchases and installation costs to claim the tax credit when they file their annual income tax returns.

Rebates for home electrification and appliances will be administered by the state of Michigan. As of this writing, state officials have issued a Request for Proposals to find a consultant to assist with administering the program. Updates will be available on the EGLE website.

Financing major improvements

Larger projects like replacement windows and doors or adding solar panels may take more cash than you have on hand. A home equity loan is a useful financing tool to help make energy-efficient home improvements right away.

 

All loans subject to approval. Rates, terms and conditions are subject to change and may vary based on credit worthiness, qualifications and collateral conditions.