By Jenevra Wetmore
If you have been considering making a “green” change in your life, 2022 might be your year. This is because every New Year brings changes to state and federal incentives to cut carbon emissions. From solar panels to home weatherization, there are tax incentives and money back deals to get you started on all types of green projects. These incentives may decline as time goes on—indeed, some are set to drop as soon as 2023—so it is best to lock in savings and tax credits while you can. Read on for some of the opportunities available to Vermonters right now:
The federal Investment Tax Credit (ITC) is the most well-known financial incentive for homeowners to go solar. The ITC is currently at 26%, meaning that a little over 1/4th of the cost of a solar photovoltaic (PV) system can be claimed on federal income taxes. This is a dollar-for-dollar reduction on your income tax! This tax credit is available for residential and commercial solar, and has helped the solar industry grow quickly since 2006. An important note for 2022: as of now, the ITC is set to drop to 22% starting in 2023. It is best to make the move to get solar this year, or you risk losing some of your tax credit going forward.
In Vermont, if your solar array produces more electricity than you use at any given time, that power is sent to the grid and your utility company is required to credit your electricity bill by a certain amount. In addition, there is no sales tax assessed on solar installations, and the additional value the system adds to your home is exempt from state property taxes.
ADVANCED WOOD HEATING
In 2021 the Wood and Pellet Heater Investment Tax Credit came into effect. Found under section 25(D) of the tax code, this new credit covers 26% of the purchase and installation costs of home heating and hot water systems that utilize wood pellets, chips and cordwood. The systems must have a federal rating of 75% efficiency or above. Next year (2023) this credit will fall to 22% of purchase and installation costs.
The State of Vermont allocated $2.7 million for additional EV incentives in June 2021. Currently roughly $1,255,000 of those incentives remain, and are available on a first come first served basis. It is best to act now, as funding has run out before, resulting in a break before more could be appropriated. The amount of your specific incentive depends on income level and whether the vehicle is hybrid plug-in electric, or all electric.
If you are looking for a used car, Vermont also offers an incentive for used hybrids and EVs, called MileageSmart. The MileageSmart Incentive is worth 25% of the initial price of the vehicle (excluding taxes and registration fees), up to $5,000. The program currently has over $250,000 of remaining incentives.
A federal tax credit is also available for buyers of qualified new plug-in electric vehicles, in amounts ranging from $2,500 to $7,500. An important point to note–once an individual car manufacturer sells 200,000 electric vehicles, the credit will be phased out for that manufacturer over the course of a year. This has already happened to Tesla and General Motors.
Weatherization is on many people’s minds as temperatures dip down to the single digits. Vermont’s Weatherization Assistance Program provides free home weatherization if you meet household income limits. On average, this program Makes about $8,500 worth of improvements per home and reduces drafts by about 40%. Visit https://dcf.vermont.gov/benefits/weatherization for more information.
The Home Performance with Energy Star (HPwES) program connects homeowners and certified contractors to assess home energy use and perform energy improvements. Currently homeowners can receive 50% of project cost back, up to $1,000. Income-eligible Vermonters can receive 50% of project cost back, up to $3,000. Available while funds last. Details at www.efficiencyvermont.com/rebates/list/home-performance-with-energy-star.
Efficiency Vermont also offers a $100 DIY Weatherization rebate. Complete one of three eligible projects and submit rebate form with receipts to get the $100 rebate. Eligible projects include: Build or buy an air-tight, well-insulated attic hatch; Spot air-seal and insulate your attic; Build an air-tight, well-insulated bulkhead door in your basement; Air-seal and insulate the box sill and rim joists in your basement; Air-seal leaks in your foundation wall (common problem area with stone foundations); Weatherize windows; Weatherize exterior doors; Install a new window, Low-E or WindowDressers storm window (each window can count as one project); Air-seal HVAC ducts; Insulate heat/hot water pipes.
Window Dressers interior insulating inserts reduce winter heat loss and increase the comfort of your home. Photo: Jenevra Wetmore.
There are a myriad of incentives, rebates, and tax credits available for upgrading your energy use in 2022. The opportunities outlined here are just a selection. Visit efficiencyvermont.com to learn about more incentives for technology such as heat pumps, lighting, air conditioners, thermostats, furnaces, boilers and more. On average, each Vermonter is responsible for over 15 tons (30,000 pounds) of greenhouse gas emissions of air pollution per year. Make 2022 the year you reduce your carbon footprint.