You could save over $10,000 with the new energy tax credits — here's how

Woman doing bills on couch
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The Inflation Reduction Act of 2022 was designed to combat inflation, invest in domestic energy production and reduce carbon emissions 40% by 2023 (opens in new tab). In fact, $369 billion has been allocated for Energy Security and Climate Change programs over the next ten years.

Portions of this money can be received through energy tax credits for going green and taking measures to lower your carbon footprint. These benefits will run through 2032, and it's possible you could qualify for a whopping $10,000 (opens in new tab) in credits. More information can be found from the White House Clean Energy website (opens in new tab)

There are several ways to earn the IRA's energy tax credits. Keep reading to learn more about each. 

Buy Energy Star Appliances 

EnergyStar AC

(Image credit: EnergyStar)

By purchasing energy efficient appliances, you could save hundreds thanks to the inflation reduction act’s energy tax credits. Here are the products you can receive credits on, according to Energy Star (opens in new tab).  

Air Source Heat Pumps

Tax Credit Amount: $300

Central Air Conditioning

Tax Credit Amount: $300

Gas, propane or hot water boiler

Tax Credit Amount: $150

Gas, propane or oil furnaces and fans

Tax Credit Amount: $150

Gas, oil, propane water heater

Tax Credit Amount: $300

Electric Heat pump water heater

Tax Credit Amount: $300

Advanced main air circulating fan 

Tax Credit Amount: $50

Energy Efficient Home Improvements  

Loft insulation

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You can also save by investing in the following energy efficient home improvements. 

Insulation: Includes typical insulation equipment including batts, rolls, blow-in fibers, rigid boards, expanding spray, and pour-in-place.  

Tax Credit Amount: 10% of the cost, up to $500 

Roofs: Energy Star certified metal and asphalt roofs that are designed to reduce heat gain through pigmented coatings or cooling granules are eligible. 

Tax Credit Amount: 10% of the cost, up to $500

Windows, doors and skylights:  Products must be Energy Star certified. You do not need to replace all windows/doors/skylights in your home to qualify.

Tax Credit Amount: 10% of the cost, up to $500 (windows are capped at $200)

Electric vehicles 

ev car charger

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If you buy a new electric car, you could be eligible to receive up to $7,500 (opens in new tab) if the vehicle was assembled in North America. However, credits will only be available to individuals making less than $150,000, single heads of households making less than $225,000 and married couples with a joint income of less than $300,000. 

Owners of used electric vehicles can receive a tax credit of up to $4,000 (opens in new tab). The credit will only apply to cars less than $25,000. Credits are only eligible for individuals making $75,000 or less, $112,500 for single heads of households and $150,000 for married couples. 

Renewable home energy systems  

Solar panels on a roof with trees in the background casting a shadow

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By installing the following home energy systems, you can receive a credit equal to 30% of the cost.  

  • Geothermal heat pumps
  • Small wind turbines (residential)
  • Solar energy systems (solar water heaters / solar panels)
  • Fuel cells (residential fuel cell and microturbine system)
  • Biomass fuel stoves
Erin Bendig
Staff writer, personal finance

Erin pairs personal experience with research and is passionate about sharing personal finance advice with others. Previously, she was a freelancer focusing on the credit card side of finance, but has branched out since then to cover other aspects of personal finance. Erin is well-versed in traditional media with reporting, interviewing and research, as well as using graphic design and video and audio storytelling to share with her readers.