Inflation Reduction Act is landmark federal legislation that has established several tax credits and rebates to help homeowners, businesses and non-profit organizations improve energy efficiency and increase renewable energy.
The incentives listed on this page are intended to help homeowners increase energy efficiency and move toward a more electric powered home.
Note that some of these programs have not yet begun and that some programs have income restrictions.
Energy Efficient Home Improvement Federal Tax Credit
Federal tax credit of 30% on qualifying efficiency and electrification upgrades, available to all homeowners through 2032.
Eligible Expenses
$2,000 for Heat pump HVAC or heat pump hot water heaters, $500 for exterior doors, $600 for exterior windows, $600 for central AC and electrical panels, $150 for home energy audits
Timeline and Details
Tax credit of up to 30% of qualifying expenses up to specified dollar amount, with annual credit total (excluding heat pumps) amongst all categories combined not to exceed $1,200. Heat pump credit is worth up to $2,000. Tax credits require tax liability, and the value of credit cannot be carried forward to subsequent tax years. However, these credits can be used annually.
Home Energy Performance-Based Whole-House Rebate
Whole-house energy performance rebate program to help all households lower energy use by 20-35% with rebates up to $8,000.
Program is geared toward building envelope and efficiency upgrades that improve overall building efficiency by at least 20% and 35%. Program rebate amount is based on modeled energy improvements and is agnostic to electrification. Qualifying low and moderate income households can receive up 80% of project costs up to $8,000. Non-income qualifying households can receive up to 50% of project costs up to $4,000.
Program can not be paired with High-Efficiency Electric Home Rebate Act (see information below). The consumer-paid portion of this rebate can be applied toward Energy Efficient Home Improvement Federal Tax Credits (30%).
Timeline and Details
Program to be administered by State of Iowa and to begin sometime 2nd half of 2023 to as late as start of 2024.
High-Efficiency Electric Home Rebate Act (HEEHRA)
Point-of-sale rebate program to help low and moderate income households with electrification projects, paying up to 100% of project costs up to $14,000.
Eligible households can pick from the following electrification projects:
- $8,000 for Heat Pump HVAC
- $1,750 for Heat Pump Water Heaters
- $840 for Induction Stoves and Heat Pump Clothes Dryers
- $4,000 for 200 Amp or greater Breaker Boxes
- $2,500 for Electrical Wiring
- $1,600 for Insulation
Eligibility
Covers 100% of project costs up to $14,000 for those households making less than 80% of area median income (AMI) and 50% of project costs up to $14,000 for those households making between 80% and 150% AMI.
Iowa 80% AMI for household of 2: About $55,000
Iowa 150% AMI for household of 2: About $91,000
Timeline and Details
Program to be administered by State of Iowa and to begin sometime 2nd half of 2023 to as late as start of 2024. Appliance-specific eligibility yet to be determined, program can not be paired with Home Efficiency Performance-Based Whole-House Rebate (see information above), and consumer-paid portion of HEEHRA projects can be applied toward Energy Efficient Home Improvement Federal Tax Credits (30%).