Inflation Reduction Act: FAQ

The Inflation Reduction Act of 2022 is a recently passed U.S. law designed to advance clean energy and reduce greenhouse gas emissions through support for investment in domestic energy production, energy efficiency and beneficial electrification. This legislation will help U.S. households install important home upgrades, increase their energy efficiency and use renewable energy by providing over $10 billion in rebates and tax credits.

While the IRA was signed into law in August 2022, some energy savings programs (e.g., tax credits) are available for improvements made starting in 2023. Others, such as state-specific incentive programs like those provided by your NHSaves® utility partners, will be developed pending further guidance from the federal government.

The IRA includes tax credits and rebates designed to reduce the cost of increasing your home’s energy efficiency while enhancing comfort.

About 20% of all greenhouse gas emissions come from the residential housing sector. The Act provides financial incentives to help address energy waste and potentially reduce these emissions by up to 40%.

In addition to tax credits that taxpayers can claim directly, the Act includes almost $8.6 billion in federal grants issued to individual state energy offices to develop and implement rebate and incentive programs. In New Hampshire, IRA grant funding will be administered through the New Hampshire Department of Energy. The NHSaves utility partners have begun and will continue to coordinate efforts with the state of New Hampshire to help optimize the development and delivery of programs and offerings that intersect with our program framework and utilize the IRA funds.

Yes. Your NHSaves utility partners offer a number of existing rebates and incentives designed to help homeowners, renters and landlords save money by providing energy efficiency solutions to lower energy costs. While IRA funding may provide additional options for energy efficiency upgrades in the coming year, New Hampshire residents and businesses can make energy efficiency improvements now with the existing NHSaves program offerings. CLICK HERE to see available rebates.

Homeowners and landlords of single- and multi-family homes can receive savings through the Home Energy Performance-Based Whole-House rebate program (the HOMES rebate program). The program measures the actual performance of your whole-home energy efficiency and electrification improvements. Eligibility is not based on income. Further details will be added as the U.S. Department of Energy issues guidance to states.

Yes. The High Efficiency Electric Home (HEEH) program includes rebates for low- and moderate-income households (or those working on their behalf) that install new, efficient electric appliances. Unlike the HOMES program, eligibility for the HEEH program is income-based. Further details will be developed as the New Hampshire Department of Energy continues to work with the U.S. Department of Energy over the coming year. In the meantime, the NHSaves programs continue to offer income-eligible programs for those customers who qualify.

No, these IRA rebates cannot be combined. The specific rules for each program will be determined by the U.S. Department of Energy and the New Hampshire Department of Energy.

Yes, the IRA extends and increases certain tax credits available to consumers who reduce energy usage and emissions from their homes by investing in energy efficiency measures and renewable energy sources.

The IRA reinstituted and increased the Energy-Efficient Home Improvement Credit, which allows households to credit up to 30% of the cost of energy efficiency home upgrades against their taxes. This credit can total up to $1,200 per year for weatherization and up to $2,000 for electric heat pumps and heat pump water heaters. Credit amount is based on the equipment or improvements made. The full credit is available for home improvements made starting in 2023.

The IRA has extended the Residential Clean Energy Credit, which allows households to credit up to 30% of the cost of installing solar panels and batteries against their taxes. This credit can be claimed for solar installed in 2022 or beyond and for residential batteries installed in 2023 or beyond.

The IRA has extended and increased the New Energy-Efficient Home Credit, which provides developers with up to $5,000 to build energy-efficient single-family homes and units in multi-family buildings. Homes and buildings must meet the U.S. Department of Energy’s ENERGY STAR® Residential New Construction requirements or be certified as Zero-Energy Ready Homes to qualify. (The latter are verified by a qualified third party as being at least 40% more energy-efficient than a typical new home.) This credit is available for qualified homes sold starting in 2023.

The U.S. Department of Housing and Urban Development and the U.S. Environmental Protection Agency provide nearly $19 billion in grants, loans and funding to support affordable housing developments in low-income and disadvantaged communities to improve energy efficiency and electrify their buildings.

The IRA significantly increased the Commercial Buildings Energy Efficiency Tax Deduction, which allows building owners to deduct the cost of qualified energy efficiency improvements for new building construction or major renovations. The cost that can be deducted is up to a maximum of $0.50 to $1.00 per square foot for projects achieving 25–50% reductions in energy cost compared to a building meeting the ASHRAE 90.1 standard. These incentives quintuple for projects that meet prevailing wage and apprenticeship requirements.

The IRA also adds a new alternative option to claiming the Commercial Buildings Energy Efficiency Tax Deduction for building owners who reduce a building’s energy use intensity (EUI) by 25% or more. This path to claiming the tax deduction allows the owner to deduct the cost of qualified energy efficiency improvements up to a maximum of $0.50 to $1.00 per square foot for projects achieving 25­–50% reductions in EUI over baseline. The same increase in incentives is available for projects meeting prevailing wage and apprenticeship requirements.

The U.S. Department of Housing and Urban Development and the U.S. Environmental Protection Agency provide nearly $19 billion in grants, loans and funding to support affordable housing developments in low-income and disadvantaged communities to improve energy efficiency and electrify their buildings.

Tax credits are available for improvements made to your home starting in 2023. The IRA does not include any specific timeline for its implementation by the U.S. Department of Energy or state energy offices with respect to cash rebates. The federal government will allocate funds to individual states, and the state government will then need to create new programs to oversee these funds, including determining cash rebate values and eligibility rules. Your NHSaves utility partners look forward to collaborating with the New Hampshire state government to design and implement approaches that allow customers to leverage these new sources of funding when taking advantage of complimentary offerings made available through the NHSaves programs. We will continue to provide updates through NHSaves.com as additional details become available.