Energy Credits in the Inflation Reduction Act

The Inflation Reduction Act, signed into law by the President on August 16, provides significant expansion of individual tax credits for green energy. Consumers may receive tax credits on new and used clean vehicle purchases. The federal credit for up to $7,500 for new vehicles and $4,000 for used vehicles. The solar credit increases the credit amount from 26% to 30% for solar panel installation costs. There is also a 30% credit for installing efficient exterior windows, skylights, doors, water heaters, and other items. There is also a $4,000 credit for an electric load service center upgrade, a $2,500 credit for electric wiring, and a $1,600 credit for insulation, air sealing, and ventilation. Consumers may also be eligible for up to $14,000 in rebates on purchases of certain efficient electric appliances such as a heat pump water heater, a heat pump for space heating or cooling, an electric stove, or an electric heat pump clothes dryer. There are income limits on most of the credits so do your research before making any purchases.