Making homes energy-efficient and sustainable is a shared dream for many Americans. The High-Efficiency Electric Home Rebate Act (HEEHRA) is a visionary program designed to bring this dream closer to reality for households across income levels. Here is the breakdown.
HEEHRA is a comprehensive initiative that aims to help American families electrify their homes with energy-efficient appliances and systems. The program does so by providing point-of-sale consumer rebates, making the transition to greener solutions both affordable and hassle-free.
Homeownership comes with its set of challenges, and for those in the low to middle-income bracket, the financial aspect is often at the forefront. If you fall into this category, the High-Efficiency Electric Home Rebate Act (HEEHRA) is more than just a rebate program; it’s an opportunity to make your home more energy-efficient, comfortable, and sustainable without breaking the bank.
Imagine wanting to replace an old, inefficient appliance in your home, say your HVAC system. Traditionally, this would involve a significant out-of-pocket expense followed by a waiting period to get some money back via rebates. HEEHRA transforms this process. Instead of waiting, you get an instant discount, slashing the price right when you make the purchase.
With HEEHRA, you don’t pay the full price and then wait for a cash-back rebate. Instead, you enjoy instant discounts, reducing your immediate financial outlay.
Bypass the need for extensive paperwork and long waiting periods. Your discount is immediate and applied right at the purchase point.
Low-Income Homes (<80% Area Median Income – AMI):
Let’s say you’re a single parent, juggling multiple responsibilities. Your home’s old HVAC system is acting up, leading to high energy bills. With HEEHRA, you could get a brand new, energy-efficient Heat pump HVAC system, which might cost up to $8,000, fully covered. That’s zero dollars from your pocket!
Mid-Income Homes (80-150% AMI):
Picture a young couple, both working, with two kids. They’ve recently bought a home, and while the mortgage and expenses are manageable, there’s not much left for big upgrades. Under HEEHRA, if they decide to replace their HVAC system costing $8,000, they’d only pay $4,000. That’s a massive 50% saving!
Low-Income Homes (<80% Area Median Income – AMI): Take Mrs. Johnson, living in Toledo. She’s been thinking of replacing her old heating system. With the HEEHRA incentives, she can opt for a state-of-the-art hybrid heat pump system, typically priced at $12,000. Thanks to the 100% rebate up to $8,000, her out-of-pocket cost is $4,000! That’s a full system upgrade without the hefty price tag.
Mid-Income Homes (80-150% AMI): The Martins, a middle-class family in Ann Arbor, are in need of a new heating system. Their combined income qualifies them for the mid-income bracket under HEEHRA. For the same $12,000 hybrid heat pump system, they’ll receive a 50% rebate, reducing their cost to just $6,000. This allows them to get a top-notch system for half its market price.
HEEHRA isn’t just about HVAC systems. It covers a broad spectrum of home electrification projects, enhancing overall energy efficiency:
If you’re a homeowner contemplating an upgrade to your heating, ventilation, and air conditioning (HVAC) system, you’ll find that (HEEHRA) point-of-sale rebates can substantially reduce your immediate financial outlay. Unlike traditional rebates or tax credits, which necessitate paying the full cost upfront and then waiting for reimbursement, point-of-sale rebates offer an instant discount at the time you make the purchase.
This immediate financial relief can make a higher-quality, more energy-efficient HVAC system more accessible to you. Moreover, this form of rebate eliminates the hassle of paperwork and waiting periods, making the process of upgrading your HVAC system both financially and operationally smoother. If you’ve not yet explored how point-of-sale rebates can benefit you in the HVAC space, you could be missing a significant opportunity to invest wisely in your home’s comfort and efficiency.
HEEHRA is a voluntary program that covers 100 percent of electrification project costs (up to $14,000) for low-income households and 50 percent of costs (up to $14,000) for moderate-income households.
Project costs will cover both purchase and installation costs. And, notably, these point-of-sale rebates will act as off-the-top discounts when a household makes the purchase.
Total household income is under $63,040.
Is eligible for the Low-Income rebates and tax credits.
Purchases a qualifying Heat Pump system for $9,027.35.
Has an out-of-pocket installed cost of $1,027.35 after rebates.
Receives a federal tax credit up to $308.21.
Total household income is between $63,040 to $118,200.
Is eligible for the Moderate-Income rebates and tax credits.
Purchases a qualifying Heat Pump system for $9,027.35.
Has an out-of-pocket installed cost of $4,513.68 after rebates.
Receives a federal tax credit up to $1,354.10.
Total household income is above $118,200.
Is eligible for tax credits only.
Purchases a qualifying Heat Pump system $9,027.35.
Has an out-of-pocket installed cost of $7,027.35 after a $2,000 tax credit.
All rebates are expected to become available towards the end of 2023 or the beginning of 2024 and each state will be rolling out its incentive programs individually. As we learn more about how Michigan and Ohio will move forward, we will keep you updated on how we can help you claim your rebate. These details may come later this year. In the meantime, if you’d like to talk through your options, feel free to give us a call! It’s not too early to begin planning for the future.
First, keep in mind that you can begin to receive tax credits on January 1, 2023. In the year following your project, you can claim 30% of your project costs (up to the maximum amount) when you file your 2023 taxes.
The Inflation Reduction Act tax credits are available to all incomes and can be combined with rebates. Simply put, it’s savings everyone can benefit from, regardless of household income! Between 2023 and 2031, you can claim 30% of the cost of qualified electrification projects as tax credits on your annual taxes. Here’s what’s included:
The overall total limit for an efficiency tax credit in one year is $3,200.
This breaks down to a total limit of $1,200 for any combination of home envelope improvements (windows/doors/skylights, insulation, electrical) plus furnaces, boilers, and central air conditioners.
Any combination of heat pumps, heat pump water heaters and biomass stoves/boilers are subject to an annual total limit of $2,000.
Call us to learn more or to reserve your rebates and be in the front of the line.