Electrify Everything

Last year, Congress passed historic legislation which will help our nation address climate change while making our homes more comfortable, healthier, and saving you money over the coming years.

The Inflation Reduction Act is a really BIG deal. It is the largest Climate Action Law EVER, anywhere in the world.

It incentivizes clean energy, electric cars and electric homes. It invests in green technology to ramp up manufacturing and meet all of the new demand. Coupled with existing policy it has the potential to lower U.S. emissions to 40% below 2005 levels by 2030. While that is below the 50% required to limit average global temperatures to a 1.5 degree Celsius increase, it is a welcome start.

This page provides an overview the IRA tax credits that are currently available to households, as well as upcoming rebates totaling as much as $14,000 per household.

Towards the bottom of this webpage there is also a list of resources related to the IRA's Direct Pay provisions for Tax-Exempt Entities.

Tax credits, rebates and incentives to reduce carbon emissions, improve comfort, protect health and save you money!

Last updated March 22, 2024: Updated estimate of when point-of-sale rebates will be available.

Tax Credits for Households

Tax Credits

Thanks to the Inflation Reduction Act, 30% of the cost of solar panels, battery storage, geothermal heat pumps and more can be deducted from your federal taxes. There are also tax credits for energy efficient windows, doors, insulation and more. For further details download our handy reference sheet by clicking on the image to the left.

Our chapter has put together the following resources, in .pdf format, which detail our current understanding of the IRA tax credits that are currently available to help you electrify your home.

For a two page 8.5” x 11” fact sheet, click HERE
For a more detailed, one page 11” x 17” poster, click HERE
For a huge, but unpolished reference sheet (15”x26”) with additional details/notes, click HERE

Note that links to additional resources can be found at the bottom of this page.

Electric Vehicle Incentives

Save up to $7,500 on a new electric vehicle, and $4,000 on a used one!

The Inflation Reduction Act provides a tax credit to help bring down the net cost of that new electric vehicle. Note that this credit is nonrefundable, so you cannot get back more on the credit than you owe in taxes! Starting in 2024, you will be able to apply the credit directly at the point of purchase to reduce the cost immediately.

Checkout the credits available to you, including a list of vehicles that currently qualify, by downloading the pdf.

The .pdf file is available in two formats

For a two page 8.5” x 11” fact sheet, click HERE
For a one page 11” x 17” poster, click HERE

A regularly updated list of electric and plug-in hybrid vehicles that are eligible for the tax credit can be found at: https://fueleconomy.gov/ and https://www.shift2electric.com/evinfolist/

Zero Emission Volkswagen ID.4

Zero Emission Tesla Model 3

Coming Soon: Rebates that could save you up to $14,000 on Home Improvements.
(Now expected by late 2024 or early 2025. Details subject to change.)

If you are still using natural gas to heat your water, dry your clothes, cook your food, and/or heat your home, this is a HUGE opportunity. You can SAVE a lot of money, while lowering emissions and making your home healthier and more comfortable. It will also lower your future energy bills.

A brief overview:

Starting in late 2024 or early 2025, most households will qualify for up to $14,000 in rebates for switching to electric appliances, electrical work and weatherization. The amount of the rebate depends on your household income and on median household income for your area..

Our chapter has put together a poster, in .pdf format, which details our current understanding of the upcoming IRA rebates that will be available to help you electrify your home:

For an 11” x 17” poster listing the proposed rebates in much greater detail, click HERE (709 KB)

Note that the final guidelines could vary from what we’ve found so far. Eventually, we expect that many stores and contractors will be able to provide you with details as to which models qualify and the rebate amount.

Who qualifies for these rebates? Here is what we have heard so far:

If your HOUSEHOLD INCOME is below 80% of the AMI (Area Median Income), for your area, you are eligible to receive a rebate covering up to 100% of the item's cost, up to the listed amounts.

If your HOUSEHOLD INCOME is from 80% to 150% of the AMI for your area, you are eligible to receive a rebate covering up to 50% of the item's cost, up to the listed amounts.

If your HOUSEHOLD INCOME exceeds 150% of AMI, you are NOT eligible for electrification rebates. You could, however, be eligible for efficiency rebates. Efficiency rebates are an alternative to electrification rebates, and have different rules. They are based on your actual (or likely) energy savings. The available efficiency rebates are expected to range from $2,000 to $8,000 and depend on both your energy savings and income. Details are pending.

At the time of this writing, it was not yet clear as to which Area Median Household Income figures will be used to calculate the rebates. For now, use Rewiring America's IRA Calculator to get a rough estimate of what you would qualify for (see link near the bottom of this webpage). You can, however, find the HUD AMI figures for 80% of AMI for your state and county at: https://www.huduser.gov/portal/datasets/il.html#2022

Tip: First click on the year, then click on "Click Here for FY 2023 IL Documentation". Next, select your state. Then select your county. Then to see the data, click "View County Calculations".

Note that the rebates will be managed by the states. Minnesota is scheduled to receive around $150 million for the rebate programs. As of this writing, rebate details are still being negotiated between the Minnesota Department of Commerce and the federal government, so this is only a rough guide as to what to expect and plan for. Watch for updates on the Clean Energy Resource Teams website and the Minnesota Department of Commerce website. Links are at the bottom of this page.

Unlike the tax credits, funding for the rebates is limited and could run out within the first year or so. Plan ahead, and don’t miss out!

Good news: Note that some items qualify for both electrification rebates and tax credits. In those cases, the amount that you pay AFTER REBATE can also be used to apply for a tax credit.

Plan your next step!

Note that you don’t have to do everything at once. There is a 10 year window. The rebates, however, could run out in a year or so – unless replenished by the next Congress.

If you have gas appliances that are nearing end of life, or a car that needs replaced, explore the available options now.

As many of the tax credits cannot be rolled over to another year, you might want to limit your purchases, so that you can deduct the full tax credit from your taxes.

Perhaps you need to upgrade your electric service before you get that electric car or heat pump.

Before replacing your furnace, it makes sense to make sure that your home is adequately weatherized. A great place to start is with an Energy Audit. (See below!)

Perhaps you need to replace your roof before adding solar panels.

If you want, start small, perhaps replacing your gas range with an electric induction stove, and or your gas dryer or water heater with a heat pump version.

Recognize that the demand for qualifying products and installation could easily outstrip supply for years to come, as manufacturers and contractors gear up. Fortunately, it is a 10 year program. Also note that many contractors and stores are not yet aware of the IRA incentives. Let them know!

Tip: Sign up for an energy audit now!

Energy Audits

Energy efficiency is the cheapest and fastest way to reduce your energy use (saving you money, while reducing emissions). Make sure that your home is well insulated and weatherized before installing a heat pump system. An easy way to get started is to schedule a home energy audit.

Many utilities offer this service. For example, Xcel Energy and CenterPoint Energy customers can schedule a home energy audit through the Home Energy Squad, a program that the Center for Energy and Environment administers for the utilities. They currently charge $70 for a newer home, and $100 for a home built before 2000. Further details can be found at: https://www.mncee.org/home-energy-squad.

Depending on your location and income, some households will qualify for free or lower cost energy audits. In addition, in many cases, 30% of the cost (up to $150) can be taken as a federal tax credit.

Direct Pay for Tax-Exempt Entities

The Inflation Reduction Act also includes DIRECT PAY provisions for tax exempt entities such as local governments, Tribal governments, houses of worship, schools, hospitals, public housing administrators, public utilities and community organizations.

Under Direct Pay, tax-exempt entities will be able to receive a tax-free, cash payment from the IRS for sustainable energy projects. The portion that the federal government pays can range from 6% to 70% of project costs, with no cap (unless Congress changes the law).

Unlike competitive grant and loan programs, in which applicants may not receive an award, direct pay allows entities to get their payment if they meet the requirements. Eligible projects are said to include rooftop solar, battery storage, geothermal heat pumps, as well as qualifying electric vehicles and charging stations.

For further details see:

https://screeningtool.geoplatform.gov/en/#3/33.47/-97.5 (Justice40 map)

Additional Resources: (*** = A great place to start)

Center for Energy and Environment (Energy Audits)
Clean Energy Job Board
Clean Energy Resource Teams: *** The Inflation Reduction Act: What you need to know