New Tax Credits Available to Make Your Home More Comfortable

Is your home drafty with rooms that are never the same temperature?

Unfortunately, most U.S. homeowners experience this, along with noise pollution and stale, poor-quality indoor air.

It wasn’t until the oil crisis of the 1970s that residential building codes became mandatory. So, many of the 130 million homes in our country suffer from poor thermal comfort and indoor air quality problems.

Cold and hot climate zones are the worst. For example, the inside of windows icing over during winter in cold climates. Or upper floors that stay above 80 degrees Fahrenheit, making sleep challenging in hot environments. 

Trying to fix these issues by turning the heat or air conditioning up can help until you scan your utility bill. But, then, the amount charged for extra natural gas or electricity may shock you. So, what should you do if you have an older, uncomfortable home?

With the recent passing of the Inflation Reduction Act, homeowners can now qualify for tax credits on energy-efficiency upgrades. But, knowing what makes sense to improve a home’s performance can be daunting. So, here are some general tips and ideas to get you started.

Where Do I Start?

While the energy-related tax credits for homeowners cover multiple options, such as electric vehicles, appliances, solar energy, water heaters, and HVAC systems, it makes the most sense to spend money on items with the most impact.

You can get this information by getting a professional home energy assessment. The assessment will tell you exactly how much energy your home uses, where your home has problems, and what issues to fix first.

What Will The Energy Assessment Include?

Professional energy audits typically use equipment such as thermal imaging, blower door testing, surface thermometers, gas-leak detectors, and furnace efficiency meters.

With this equipment, the assessor can examine a home’s systems. Then, provide a report that will tell you how to reduce your home’s energy consumption and make it more comfortable and healthy. Items recommended most frequently:

  • Complete air-sealing of the entire house to prevent drafts and air leaks
  • Increase insulation to lessen heat loss and increase thermal comfort
  • Seal and insulate HVAC ducts in unconditioned spaces
  • Fix any areas of the house with moisture problems to help prevent mold
  • Increase the energy efficiency of air conditioning and heaters
  • Install fresh-air ventilation, ENERGY STAR appliances, LED lighting, smart thermostats, solar PV, and other items to help boost home performance

The suggestions come from the quality, condition, and age of your home and its equipment. Along with lifestyle changes that can help lower energy use.

Reports also typically include federal and state-level incentives available and projected costs of improvements.

What Are The Tax Credits Available?

The energy assessment will cover more exact tax credits for your location, but here are the tax credits listed by ENERGY STAR for primary residences:

  • Air source heat pumps: $300
  • Central air conditioning: $300
  • Natural gas, propane, or oil hot water boilers: $150
  • Natural gas, propane, or oil fans: $150
  • Water heaters (non-solar): $300
  • Advanced central air circulating fan: $50
  • Insulation: 10% of the cost, up to $500, and doesn’t include installation
  • Metal and asphalt roofs: 10% of the price, up to $500, and doesn’t include installation
  • Doors, windows, and skylights: 10% of the cost, up to $500 (windows $200 cap), and doesn’t include installation

Note: Read complete details and requirements to ensure you qualify before purchasing equipment or materials.

While 10% tax credits may not sound remarkable, you must keep the big picture in mind. The rebates are a bonus for improvements that will make your home more valuable, comfortable, and healthier. And over the long run might pay for themselves in reduced costs.

Home Performance: What You Should Know

When it comes to home performance, there are some general concepts to remember.

Focus on The Thermal Envelope

When you make improvements to your home’s thermal envelope, everything improves. Noise pollution goes down, it’s more comfortable, and it needs less energy.

And in some cases, it can provide a positive return on investment. For example, a Remodeling Magazine report found that adding attic insulation costs around $1,268. But, it increased home value by 166%.

Focusing on the thermal envelope first also lowers additional costs by reducing the size of future improvements, such as the HVAC equipment and a solar array.

Prevent Stack Effect

The stack effect happens because hot air is less dense than cool air. As a result, the warm air will rise and leak at the top of the home. Meanwhile, cooler air enters the bottom of the house to equalize pressure. 

In skyscrapers, the stack effect created significant problems. Early on, people couldn’t open front doors because of all the cool air rushing in at high pressure. That is why they added revolving doors.

While most homes are not skyscrapers, this can still lead to significant air leakage and energy loss.

You can prevent this problem by focusing on air-sealing the top and bottom of your house. Typically, this involves the attic floor and rim joist areas.

By starting with the thermal envelope, and air sealing and insulating the top and bottom of your house, you’re building the perfect foundation for future improvements. In addition, all the additional tax credits the Inflation Reduction Act includes will also benefit.

davin
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Davin is a jack-of-all-trades but has professional training and experience in various home and garden subjects. He leans on other experts when needed and edits and fact-checks all articles.