Inflation Reduction Act Archives | Citizens Utility Board

CUB update: What about those appliance rebates in the Inflation Reduction Act?

Elizabeth — Fri, 08 Nov 2024 21:50:40 +0000

CUB gets a lot of questions from consumers wondering when they’ll be able to enjoy appliance rebates offered through the Inflation Reduction Act (IRA). We’ve got information about where Illinois is in the process of launching that rebate program–as well as some proposed changes to it. The IRA, federal legislation that the president signed into law in 2022, contains several tax credits and rebates helping consumers to improve their home’s energy efficiency and enjoy the benefits of electrification. Some provisions are available to Illinois consumers now, including: Home Energy Efficiency and Weatherization Tax Credit: Allows consumers to claim up to $1,200 a year until 2033 for energy efficiency upgrades, such as home energy audits and electric panel upgrades. It provides a separate $2,000 one-time tax credit for space or water heater upgrades. Clean Energy Tax Credit: Allows consumers to receive up to 30 percent of project costs back for rooftop solar, geothermal heat pumps, or battery storage. Additionally, there is a $7,500 income-qualified tax credit available for new electric vehicles. However, so far, Illinois has not implemented another IRA provision: the Home Electrification and Appliance Rebate (HEAR). In order to receive federal funding and launch the rebate program, each state must submit an application and receive approval by the U.S. Department of Energy (DOE). The Illinois Environmental Protection Agency (Office of Energy) submitted its HEAR application in the summer of 2024, and it’s currently awaiting DOE approval. While we wait, here’s more information about the program as well as changes to the incentives that will be offered: A big advantage of the HEAR rebate is that – unlike the tax credits we describe above – it’s accessible even if you don’t owe federal taxes. Under the HEAR program, Illinois consumers will be able to receive rebates of up to $14,000 on home electrification projects, and the program will give them the flexibility to mix and match from different rebate categories. For example, a consumer could receive multiple rebates–such as up to $840 for an electric stove and up to $8,000 for an electric heat pump–until they hit the $14,000 cap. Once it gets the OK to launch the program, the Illinois EPA plans to modify the income qualifications so that lower median income households can access program funds first. Initially, the program was designed for consumers at or below 80 percent to 150 percent of the Area Median Income (AMI). Consumers at 80 percent AMI or less were able to take advantage of rebates covering the full cost of a project, up to the $14,000 cap. Anyone who fell at 81 percent to 150 percent AMI were eligible to have half of the project cost covered, up to the $14,000 cap. But Illinois has proposed changing eligibility to lower-income households (80 percent AMI or lower) only and adjusting funding distribution, based on demand and interest. Another important detail: Unlike with programs in other states, the Illinois EPA has said they are not planning to issue retroactive rebates through this program. This is different from other states’ programs, so it’s important to note this when planning your energy efficiency upgrades. As […]

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Here’s what Illinois consumers need to know about Inflation Reduction Act clean energy benefits

Elizabeth — Thu, 01 Sep 2022 21:00:03 +0000

Now that the historic Inflation Reduction Act (IRA) has been signed into law, many consumers are wondering how they can benefit from the money-saving, clean energy provisions in the bill. The IRA represents much needed relief at a time when 1 in 6 homes in America are behind on their utility payments. Below are the major ways consumers can take advantage of the new legislation: Home Energy Efficiency Tax Credits Each year for the next decade, consumers can claim a tax credit for 30 percent of the cost of qualified projects that make their home less drafty or improve energy efficiency, to an annual limit of $1,200 credit. These incentives include: Up to $600 for highly efficient central air conditioners; electric panel upgrades; and water heaters, furnaces and water boilers that run on natural gas, propane or oil. These products must meet Consortium for Energy Efficiency’s highest efficiency tier. Up to $150 for a home energy audit $600 for new energy-efficient exterior windows or skylights $500 for exterior doors Heat Pumps and wood burning stoves If you purchase an energy-efficient electric or heat pump for space heating and cooling or a heat pump water heater, you qualify for 30 percent tax credits up to $2,000. Tax credits are also available for highly rated stoves and boilers that generate heat from burning wood or other biomass feedstocks. The credits for heat pumps or biomass stoves and boilers don’t count against the $1,200 annual limit for the home energy efficiency tax credit detailed in the previous section. Electrification rebates The Inflation Reduction Act includes $4.5 billion over 10 years for state and tribal programs that discount or fund electrification and efficiency projects or appliances for lower and moderate-income households. The bill defines lower-income households by annual incomes less than 80 percent of the area median income. Moderate income is defined by annual income no greater than 150 percent of the median. (Learn how to find your area median income.) The lowest-income households are eligible for point-of-sale rebates covering the full cost of certain electrical appliances or efficiency projects. Moderate-income individuals and families can get half off. The cumulative rebates available to each household total $14,000. The law sets rebate caps for selected electric product classes. There is up to $8,000 available for purchasing space heating and cooling heat pumps. For heat pump water heaters, the maximum is $1,750. For electric stoves, it’s $840. The high-efficiency electric home rebates should also cover half or all the cost of upgrading electric panels up to a $4,000 limit. Other covered services are electrical work, with a $2,500 maximum, and insulation projects, up to $1,600. Solar, batteries and geothermal Thanks to the new law, the existing 22 percent solar panel tax credit has been immediately bumped to 30 percent for the next decade. This tax credit is available now, so it’s a great time to look into your local solar group-buy programs, like Grow Solar Chicagoland. There’s also a tax credit for home battery units with more than 3 kilowatt-hours of storage capacity, allowing the benefits of solar generation to stretch into shorter winter days. For […]

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Breaking: Inflation Reduction Act is signed into law

Jim Chilsen — Tue, 16 Aug 2022 10:00:23 +0000

The nation has taken a historic step forward in fighting costly climate change and lowering utility bills through energy efficiency with passage of the Inflation Reduction Act (IRA). President Biden signed the IRA into law on Tuesday, August 16, The landmark energy bill passed the U.S. House on Aug. 12 and the Senate on Aug. 7. (The legislation needed Vice President Kamala Harris to break a 50-50 tie in that chamber.) “Passing the Climate and Equitable Jobs Act was a huge breakthrough in Illinois. But we’ve got more work to do, and we need strong legislation, like the Inflation Reduction Act, coming out of Washington,” CUB Executive Director David Kolata said after the IRA passed the House. “CEJA and the IRA are about seeking consumer-friendly ways to fight climate change–protecting our planet and at the same time protecting our pocketbooks.” Kolata thanked CUB supporters who sent more than 1,400 messages over the last week urging Washington to pass the IRA. The legislation includes significant provisions on taxes and health care, but the largest chunk of spending, $369 billion, goes to clean energy and efficiency improvements to fight climate change. CUB has long promoted the bill-cutting benefits of energy efficiency, and the watchdog argues that climate change unchecked will cost electric customers billions in higher bills in years to come. So fighting the world’s climate problems through strong clean energy legislation benefits consumers and their pocketbooks. The IRA represents the largest combined investment in energy efficiency in U.S. history and a “massive win for our climate and for reducing energy costs for households and businesses,” according to the American Council for an Energy-Efficient Economy (ACEEE). Below is a summary of key provisions: 40 percent reduction in carbon emissions by 2030. $9 billion for rebate programs focusing on lower-income consumers to help people make efficiency upgrades and switch to more efficient electric appliances. 10 years of tax credits for making heat pumps, rooftop solar, electric HVAC and water heaters more affordable. $4,000 tax credit for lower/middle income drivers to buy used clean vehicles, and a tax credit of up to $7,500 to buy new clean vehicles. $1 billion grant program to make efficiency upgrades to affordable housing. Tens of billions of dollars in tax credits, grants and loans to support U.S manufacturing of solar panels, wind turbines, electric vehicles and batteries. Get more details on the IRA: Here, here and here. “The legislation’s landmark investment of $369 billion in climate and clean energy programs will help deploy thousands of megawatts of renewable power, create hundreds of thousands of good-paying American jobs, reduce the cost of electric power, and finally put the country on track toward achievement of our climate goals,” said the American Council on Renewable Energy. RMI, formerly the Rocky Mountain Institute, added that the legislation will lower energy costs, increase investment in clean energy economic opportunities, and stimulate jobs and economic growth. “Hands down, the investments in this new legislation will help lower energy cost inflation,” said Jules Kortenhorst, CEO of RMI. The nonprofit, nonpartisan Committee for a Responsible Federal Budget estimated the IRA would reduce deficits by $1.9 trillion over […]

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