By Jenevra Wetmore
2022 was one of the top 10 hottest years on record. 2022 was also the year that the US government passed the Inflation Reduction Act (IRA), which is the single largest investment in clean energy that our country has ever made. The IRA provides up-front discounts, tax credits, and low-cost financing to electrify your household. No matter your income level, the IRA offers incentives to stop using fossil fuels. Given this opportunity, if you have been considering making a “green” change in your life, 2023 might be your year to take action. To learn what IRA incentives you are eligible for, visit rewiringamerica.org and use their IRA calculator.
In addition to the IRA, there are tax incentives and money back deals to get you started on all types of green projects, from home weatherization to electric vehicles. Every New Year brings changes to state and federal incentives to cut carbon emissions– read on for some of the opportunities available to Vermonters in the New Year:
The federal Investment Tax Credit (ITC) is the most well-known financial incentive for homeowners to go solar. Thanks to the IRA, the ITC will go up to 30%, meaning that 30% of the cost of a solar photovoltaic (PV) system, home batteries, or a geothermal system can be claimed on federal income taxes. This is a dollar-for-dollar reduction on your income tax! As of now, the 30% credit will stay in place through 2034.
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 2023 the Wood and Pellet Heater Investment Tax Credit will cover 30% of the purchase and installation costs of home heating and hot water systems that utilize wood pellets, chips and cordwood. There is an annual cap of $2,000. The State of Vermont also offers incentives for woodstove changeouts and repairs. Incentives of up to $6,000 for stove and $4,000 for repairs are available for new cordwood or pellet stoves that meet certain EPA standards and/or a repair of a chimney or hearth necessary for the new stove to meet fire and Building Safety Code. To be eligible you must remove an existing wood stove that is not EPA certified or more than 20 years old. Depending on income level, 80% or 60% of the cost is covered up to $6,000. Visit rerc-vt.org/woodstove-change-out-and-repairs for more information on this program.
The IRA contains many incentives for electric vehicles (EVs). For the first time there is a federal tax credit for used EVs of 30% up to $4,000, with an income cap for the buyer. Starting in 2024, this credit can be transferred directly to dealerships for discounts at point of sale. There is also a tax credit of 30% up to $7,500 for new EVs, but there are various requirements to receive the full credit. You will need to check that the car is eligible, that you meet income limits, and that final assembly of the vehicle took place in the US.
The State of Vermont also offers additional EV incentives. As of July 1, 2022 there was $12.3 million available for the program. Interested Vermonters are encouraged to take advantage of this offering while funds are available. The amount of your specific incentive depends on income level and whether the vehicle is hybrid plug-in electric, or all electric. It is best to act now, as funding has run out before, resulting in a break before more could be appropriated.
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.
Weatherization is on many people’s minds as temperatures dip down to the single digits. Vermont’s Weatherization Assistance Program (WAP) 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 and to see income guidelines.
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 75% of project cost back, up to $2,000. Income-eligible Vermonters can receive 75% of project cost back, up to $5,000. Available while funds last. Details at www.efficiencyvermont.com/rebates/list/home-performance-with-energy-star.
There are a myriad of incentives, rebates, and tax credits available for upgrading your energy use in 2023. 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 2023 the year you reduce your carbon footprint.
Economic incentives make 2023 a great year for you to harness the immense power of the sun to meet your energy needs. Photo: NASA/SDO