With energy bills on the rise in Vermont, we’re all looking for ways to save on heating costs this winter. Upgrading your insulation is one of the best ways to do so. The EPA estimates that homeowners can save an average of 15% on their heating and cooling costs with proper insulation and air sealing.
The Inflation Reduction Act of 2022 (IRA) is making it easier and more affordable for homeowners to make energy efficiency home improvements like installing new insulation.
Keep reading to learn more about the Inflation Reduction Act and how it can help you make affordable home renovations that save money!
30% Tax Credit for Insulation & Air Sealing
The Inflation Reduction Act revitalized the old Nonbusiness Energy Property Tax Credit and renamed it the Energy Efficiency Home Improvements Tax Credit. This credit allows you to reduce what you owe in federal income tax by 30% of your total project costs for qualifying energy improvements, starting in 2023.
Many upgrades that make your home more energy efficient qualify for the insulation tax credit, including:
The 30% insulation tax credit will be available from 2023 until 2032. It is retroactive to qualifying projects that were completed in 2022 but at a 10% value. You can claim the credit more than once, but there is a limit of $1,200 per year.
How to Claim the 30% IRA Insulation Tax Credit
Claiming the tax credit is simple and straightforward. All you need to do is file IRS Form 5695 with your regular tax return.
Inflation Reduction Act Insulation Rebates Should Be Available in Late 2023
The Inflation Reduction Act created two new rebate programs to make energy efficiency home improvements like insulation and air sealing more affordable. These are:
HOMES (Home Owner Managing Energy Savings) Rebate Program: A rebate program offering $2,000 for upgrades with modeled energy savings of 20% or more, and $4,000 for upgrades with modeled energy savings of 35% or more. The maximum rebate amounts are double for low and moderate-income households.
High-Efficiency Electric Home Rebate Program: A rebate program offering $1,600 in insulation, air sealing, and ventilation rebates for low and moderate-income households.
The funding for these rebate programs will be distributed to individual states, and each state’s department of energy will be in charge of distribution. Vermont will receive a total of $58,555,080!
Funding is not available quite yet, however. The Department of Energy anticipates that funding will be available to individual states by spring 2023, and the rebates will be available to the public later in the year. We’ll be sharing information as it becomes available, so make sure you check back for updates!
Efficiency Vermont Insulation Rebates
Inflation Reduction Act incentives aren’t the only insulation incentives available to Vermonters! Efficiency Vermont offers a cash rebate program to help Vermont homeowners and commercial property owners increase efficiency and reduce energy costs:
Residential/Single-Family Dwellings: Home Performance with ENERGY STAR insulation rebate for 75% of installation costs up to $2,000 for high-income households and up to $5,000 for low and moderate-income households.
Commercial and Multi-Unit Buildings: Building Performance with ENERGY STAR insulation rebate for 75% of installation costs up to $5,000.
Vermont Foam Insulation Can Help You Take Advantage of Insulation Incentives
Vermont Foam Insulation is a big proponent of affordable insulation—we believe everyone deserves to live in a comfortable and energy-efficient home. If you’re interested in making your home more energy efficient with new insulation, give us a call. We are here to answer your questions about insulation tax credits and rebates.
VFI is Vermont and New Hampshire’s premier spray foam insulation contractor serving homeowners in Lebanon, Hanover, Chester, Brattleboro, Killington, and the surrounding areas.