Your Electric Bank Account!

The Inflation Reduction Act is live!

Tax credits available under the August 2022 Inflation Reduction Act are now yours! There are no income limits to block the availability of these credits. If you incur tax liability in 2023, you may be eligible for some of these fantastic financial catalysts for energy efficiency action. And, these credits are not limited to just 2023! Unless something changes at a congressional level, these credits reset every year until 2032. This means that a bit of project planning will be to your benefit. By organizing your energy efficiency home improvement projects, you may be able to take $1,200 in tax credits for a number of years. You cannot carry over any unused credit but you can stagger your expenditures to enable the credits over multiple years.

The Inflation Reduction Act tax credits are like having your own ‘electric bank account’!

Rewiring America

For example, you could upgrade your electrical panel this year to allow for the addition of a heat pump, grabbing the $600 panel credit and the 30% of cost (up to $2,000) heat pump credit. (Note: the 30 percent tax credit up to $600 for an electrical panel upgrade is only an option if the panel upgraded in conjunction with another upgrade, like a heat pump.) Next year, a bit of air sealing and insulation work will allow another $1,200 in tax credit. Maybe the following year you upgrade a door and a couple of windows, netting yet another $1,200 in credit. By working with the annual cap of $1,200, this credit can be applied to numerous cost-saving improvements, saving you thousands of dollars and lowering annual energy costs

Here are some great resources to get you thinking about your home improvements, energy efficiency, and IRA tax credits:

OUR FAVORITE! https://www.rewiringamerica.org/app/ira-calculator

Alaska Heat Smart’s IRA FAQ page

DOE: Making Our Homes More Efficient: Clean Energy Tax Credits for Consumers

https://www.rewiringamerica.org/

https://www.irs.gov/credits-deductions/frequently-asked-questions-about-energy-efficient-home-improvements-and-residential-clean-energy-property-credits-qualifying-residence

https://www.washingtonpost.com/climate-solutions/2022/12/29/climate-tax-credits-clean-energy/

Upfront Discounts and Energy Efficiency Rebates

These very generous financial incentives will not be available until later into 2023 or even sometime in 2024. These upfront cost discounts differ from tax credits in that your gross household may not exceed designated income caps. While we have not yet seen these final income caps, we assume that they will be similar to those that apply to the Alaska Heat Smart Clean Heat Incentive Program, though the upper limit of the IRA rebates will be a bit more generous.

Alaska Heat Smart is increasingly asked whether or not a homeowner should hold off on a heat pump installation or weatherization upgrades, and choose to hold out for the IRA rebates. This is a personal decision and there are many factors that come into play. How long do you want to wait to start your savings? How imminent is your boiler or furnace failure? Can you go another winter with the systems you currently have? Should you act now and combine existing benefit programs, taking advantage of the rebates one they become available?

If in doubt, be sure to take a look at our existing programs. It is possible to mix and match some of these, allowing you to act now. The combination of a heat pump incentive, a tax credit, and even a low interest heat pump loan can you have you saving in no time.

Heat Pump Loan Cap Raised!

2022 may just be Juneau’s ‘Year of the Heat Pump’! It seems that everybody’s doing it. The word is out that heat pumps will save you money, heat your home nearly all year long, provide air conditioning, keep your home heating local, eliminate oil hazards, and shrink your carbon footprint in one of the most impactful ways possible.

Demand for both heat pumps and the contractors to install them is at an all-time high! If you are ready to move on a heat pump, yet you’re finding that cash flow is an issue, our Heat Smart – True North FCU (TNFCU) heat pump loan may just be the solution for you. The hurdle of high up front initial costs is a common stumbling block for many and this loan is one of our tools that can help you make the leap.

In response to local demand for heat pumps atop a surge in interest to move away from fossil fuel heating, Alaska Heat Smart has been busy creating new programs to make it easier for ALL Juneau residents to benefit from heat pumps’ money-saving and climate-friendly benefits. Following on the heels of our wildly popular free home heat pump assessment program, we are making headway on the development of our lower income Healthy Homes program and our modest income Home Heat Pump Incentive Program.

Our traditional loan program has been up and running for more than a year now. We’ve often been asked if the loan cap could be raised from it’s starting cap of $7,500. Complex or multi-head heat pump systems are often quoted from $8,500 to close to $30,000. Alaska Heat Smart is happy to announce a new loan cap of $12,500! If you have good credit and a solid debt to income ratio, this loan could be yours.

If granted $12,500 at 4%, the lowest rate offered on this loan by TNFCU, you’ll free up cash flow and start saving money immediately!

Interest payments over 5 years for a $12,500 heat pump loan at 4% interest would average just under $22 per month! With the average Juneau heat pump installation saving a homeowner over $1,200 annually, despite paying interest, there would still be a $78 average monthly savings over the course of a year!

And, if you need a smaller loan, interest payments will be even lower and your savings that much higher!

Learn more about our home heat pump loan today!