Cost is a major consideration for homeowners looking to transition to all-electric power. Thirty percent of U.S. households are either having trouble paying their energy bills or having to keep their homes at unsafe temperatures as a result. While electrifying your home comes with the promise of eventual savings, making the transition comes with its own set of upfront costs. Fortunately, there are new rebates and tax credits available to help you save. Here's everything to consider before embarking on your own home electrification project.
What Are the Benefits of Home Electrification?
Home electrification is the process of transitioning from oil and gas-powered appliances to electricity-powered ones. Besides being better for the environment, electrifying your home results in better savings — and better safety.
Removing gas and combustion appliances from your home improves indoor air quality, protecting your family from the threat of harmful gas leaks. It's also more reliable: Oil and gas pipelines in the U.S. resulted in over 5,700 significant incidents over the past two decades. These incidents create supply disruptions, and it's likely they'll only increase in frequency and severity as our infrastructure continues to age — not to mention that all these disruptions mean more costs for you. Remaining reliant on oil and gas makes you susceptible to sudden surges in costs related to supply incidents or extreme weather events, making the switch to electrical a sound, future-proof bet.
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How Much Does Home Electrification Cost?
The true cost of electrifying your home is hard to predict. How much you spend will vary based on your home and your market. When calculating, you'll have to account for both new appliance costs, as well as the labor associated with wiring and installation. There's no doubt that it requires some degree of initial investment, but considering the savings, electrification can pay for itself — and then some — in due time.
Of course, there's no denying cost remains a major barrier to many homeowners. That's why the government has taken measures to help ease the upfront financial burden for those willing to make the jump to all-electric living. The 2022 Inflation Reduction Act (IRA) has allocated $9 billion in rebates for energy-efficiency and home-electrification projects, mainly in the form of two distinct programs. The rebates featured in these programs are expected to be available later in 2023 and will remain available to homeowners until September 30, 2031:
High-Efficiency Electric Home Rebate Act (HEEHRA)
HEEHRA works through point of sale, which means you'll receive a rebate when you buy equipment and appliances for your home electrification project. That includes items like:
If you've had one or more of these products on your wishlist, you're in luck. HEEHRA promises big savings, especially for low-income homeowners. For those making less than 80% of their area median income, HEERA offers 100% rebates (up to $14,000) on electrification projects. Moderate income households — those making 80-150% of their area median income (AMI) — can receive 50%. Be sure to look out for the ENERGY STAR® certification when shopping for appliances to ensure your purchases qualify for rebates.
Homeowner Managing Energy Savings program (HOMES)
HOMES bases rebates on actual home performance rather than point-of-sale. What does that look like in practice? HOMES characterizes savings in two ways: Modeled-performance rebates and measured-performance rebates.
Modeled-performance rebates are based on the projected ability of an improvement to increase home energy efficiency. Measured-performance rebates, on the other hand, are based on your home's actual energy performance. Eligibility for these rebates is based on hitting certain efficiency benchmarks, and the amount you'll be able to receive will depend on your income in addition to how much energy you saved. Savings can range anywhere from $2,000 (or 50% of the project cost) all the way up to the lesser of $4,000 or 80% of the project cost.
Related Post: Everything You Need to Know About Home Energy Rebates & Tax Credits
Other Ways to Save
The 2022 IRA also introduced a series of tax credits that could also be helpful to homeowners. Between now and 2032, homeowners can qualify for a 30% tax credit on purchases of or expenditures related to items like heat pumps, biomass stoves, and solar electricity generators. You've got plenty of time to claim these credits, though they will drop from 30% to 26% in 2033, and again to 22% the following year, so make sure to account for that in your planning. There are a few other limitations to keep in mind for claiming these tax credits, so be sure to review all the details first.
Finally, many state and municipal governments offer their own tax credits and incentives, as well as certain utility providers and manufacturers like ENERGY STAR. It's a lot to keep track of, but Green Door's Rebates Finder can help you easily see savings opportunities in your area.
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How Do I Apply for Home Electrification Rebates?
HEEHRA rebates should be applied right at the time of purchase, so when you pick up your new dryer or stove, you'll see savings immediately. Guidance isn't yet available for HOMES, though there'll likely be more documentation involved. Much like claiming the tax credits, expect a little more legwork on your part.
But home electrification is supposed to be about saving energy, not expending it, and our Green Door app is filled with features to make the process less painful. Find rebates via Green Door's Rebates Finder or tax programs that apply to your location, and get the yearly documentation you need to claim credits right from the app. You can also see details on eligibility criteria and get links for easy application. To make it even easier, you can also filter by product type and program, and pin your favorites to use later.
Creating a Green Door account is free, and once you register, you can fill out a home profile to get customized Home Investment Plans and recommendations for projects to take on next. When you're ready to move forward, you can browse Pearl Certifiable ENERGY STAR appliances and fixtures at our partner site, Build with Ferguson. Then connect with a local, vetted contractor from the Pearl Network to handle installation, and you'll have everything you need to request your Pearl Certification complete with an Electrified Home Badge.
Log in to Green Door today to jumpstart your own home electrification project and discover new ways to save.
