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The Inflation Reduction Act Can Help Make Rebuilding Efforts More Energy Efficient

As our region cleans up debris and begins the process of repairing homes and replacing damaged appliances, homeowners might consider delaying some repairs until the new year. On January 1, rebates and incentives related to the Inflation Reduction Act passed in August will kick in.  It’s unfortunate that the enhanced incentives aren’t available presently when our area residents most need them. The Energy Efficient Home Improvement Credit is worth 30% of the total cost of the project, up to $600 for exterior windows and skylights, $250 for a single exterior door, and $500 for all exterior doors. The Energy Efficient Home Improvement Credit also provides a credit of 30% of the total cost of heat pump water heaters and heat pump air conditioning systems up to $2000, and $1,200 for weatherization projections like insulation and air sealing. The tax credit is capped at $2000 per year per family, but can only be claimed on federal taxes owed, so if you have no tax liability, you can’t benefit.


For households earning less than 150% of Area Median Income (AMI) in the region, the High-Efficiency Electric Home Rebate program (HEEHR) will provide a direct point-of-sale rebate on qualifying purchases and installation of appliances including electric stoves, cooktops, ovens, water heaters.   For the Naples-Immokalee-Marco Island MSA, the average household income (AMI) for a family of four is $75,450 ($60,400 for a two-person household). In the Cape Coral/Ft Myers area, the AMI for a four-person household was $64,300 ($51,450 for a two-person household).  This means that families earning less than 80% of these limits, approximately $60,360 for a family of four in Collier and $51,440 for a similar household in Lee County), would be entitled to 100% rebate for the purchase of the item up to a maximum, which varies by item. Those earning between 80% and 150% of AMI would be entitled to 50% of the total purchase and installation cost up to the item limit, and a cap of $14,000 per household for all electrification projects. A list of upfront discounts by item and a handy calculator that estimates benefits can be found at Rewiring America


The HEEHR program will be run by the State Energy Office, so specifics will be established by each state, and the process of implementing the program may take 12 to 24 months.  Given the need for rebuilding and financial assistance in many Florida communities impacted by Hurricane Ian, the state should expedite the program and implementation guidelines. It could also allow qualified households to receive the rebate after purchases, in order not to slow down rebuilding efforts.


Improving residential energy efficiency will lower energy costs for households and is critical to advancing climate mitigation goals.  Housing accounts for approximately 20% of all US greenhouse gas emissions. According to Energy Innovation, a non-partisan energy and climate think tank, and the Rhodium Group, a private research firm, the Inflation Reduction Act’s suite of incentives for home improvement and electric car purchases could reduce emissions by approximately 40% from 2005 levels by 2030.  Adoption of measures built into the legislation, along with actions in other sectors, such as agriculture and technology, could allow the US to attain the 2030 GhG targets agreed to in the Paris Accords.





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