The Inflation Reduction Act (IRA), which was passed in August of this year, will have an enormous impact on communities across Utah. The IRA aims to lower energy costs of households and businesses, create more manufacturing jobs for US workers, and create a healthier, cleaner, and more secure future.
The most immediate effect the IRA will have for our customers comes from provisions for $369 billion to help lower climate pollution in half by 2030 with clean energy investments. This will create tax credits and rebates to make it easier to purchase high-efficiency HVAC equipment.
This comes at an opportune time, as the new SEER2 restrictions for air conditioning and heat pump systems will go into effect on January 1, 2022. SEER2 requires new testing and measurement standards for HVAC equipment to improve their efficiency. Costs for equipment may increase by 20–30% due to the SEER2 standards.
How the IRA Affects Utah Residents
One of the key incentives of the IRA for Utah residents is the High-Efficiency Electric Home Rebate Act (HEEHRA). Utah families can take advantage of rebates that cover 50–100% of the cost of installation of new electrical appliances, including high efficiency heat pumps and water heaters. Thousands of low- and moderate-income households will be eligible for these rebates.
Eligible homes include households earning 150% or less of an area’s median income (AMI). You can find the AMI for your region here. Our immediate service area in Salt Lake County has an AMI for $103,400 for 2022. Households with an income between $80,000 and $150,000 can claim the rebate of up to half the cost of upgrades to qualifying electrical equipment, such as and ENERGY STAR heat pumps. Households with incomes below $80,000 can claim a rebate up to the full cost of their upgrades, with a dollar cap subject to the type of equipment purchased ($8,000 for a heat pump) and up to a household cap of $14,000.
Customers can also qualify for the HOME Rebate Program to receive up to an $8,000 rebate for the installation of high-efficiency equipment. The rebate is based on modeled energy savings and IRS income requirements, and it cannot be combined with the High-Efficiency Electric Home Rebate Act.
When Will These Benefits Be Available?
You can start to take advantage of HEEHRA and HOME programs as soon as the State of Utah applies for funds to set up the state program. The availability of the benefits is not yet certain, and there is not yet a concrete timeline for the state. It’s estimated that many of the programs may become available in mid-2023. However, the programs will extend to 2031.
If you are planning to upgrade your current heating and cooling system, our team at Rentmeister Total Home Service can assist you with claiming the rebates for which you qualify and install all-electric high efficiency HVAC equipment that provide you heating and cooling at lower costs. Thanks to the IRA, you’ll pay less to provide comfort to your house around the year, benefit the environment, and enjoy the best in new HVAC technology.