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Inflation Reduction Act Tax Credits

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Home Efficiency Upgrades: IRA Tax Credits are Available Now

Information last updated March 12, 2024
Inflation Reduction Act Tax Credits

Maximize your savings with home efficiency updates.

The Inflation Reduction Act (IRA) helps homeowners make energy-efficient home upgrades simple and more affordable. A more efficient home can reduce your energy costs, lower carbon emissions and improve your family’s comfort. OPPD is here to help you make informed decisions about the new IRA tax credits and connect you with OPPD-certified Trade Allies who can complete your updates.

Always refer to a trusted tax professional for advice on your personal tax credit decisions.

IRA upgrades could save the average taxpayer up to $1,000 on annual energy cost by 2030. Department of Energy, 2023.

WHY UPGRADE?

New energy-efficient technologies are safer, use less power and are now more affordable than ever thanks to Inflation Reduction Act tax credits. And a more efficient home means you’ll use less energy, helping lower your energy costs for years to come.

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Heat Pumps: Heat Pumps are 2-3 times more efficient than traditional systems, offering gentler, more natural heating/cooling with reduced emissions and energy costs. Up to $2,000 tax credit*     Central Air Conditioning (AC): High-efficiency HVAC systems can increase household comfort and save money on energy bills year after year. Up to $600 tax credit*     

*Credit amounts/limits are subject to change. Verify current information with the IRS Inflation Reduction Act page, and consult with an OPPD-certified Trade Ally/your tax advisor before making any final decisions.

 

Keep scrolling for more about geothermal tax credit, clean energy tax credit, solar investment tax credit, clean vehicle tax credit and wind tax credit opportunities.

More About IRA Residential Tax Credits

Inflation Reduction Act legislation allows you to claim up to 30% of costs on certain energy-efficient home upgrades as dollar-for-dollar reductions on your taxes that year. You can only claim so much per year, but many credits will be available to claim for several years (some until 2031) and may be claimed multiple times for any qualifying work performed during each tax-year.

The categories below provide a basic overview of currently available credits. Always consult with a tax professional about your eligibility for credits on any specific upgrades you’re interested in making to your home.

Energy-Efficient Heating & Cooling Upgrades

Upgrading your home's HVAC system or water heater can result in big savings on your energy bill. Some modern heating/cooling equipment (like heat pumps) are 2-3 times more efficient than 20th-century climate-control solutions.

The IRA offers homeowners with energy-efficiency tax credits on qualifying new central A/C units, energy-efficient water heaters, heat pump water heaters, furnaces and boilers. There’s also federal geothermal tax credits for geothermal heat pumps. Don’t forget about OPPD HVAC Smart Rebates (including geothermal rebates), which can offset some of the up-front costs of making these upgrades.

Table of heating and cooling upgrades, tax credits, requirements, and annual caps. Upgrade your electrical and natural gas heat pumps and get a tax credit for 30% of project costs. It is required to have SEER2 duct system greater than 10, or ductless systems SEER2 greater than 16, EER2 greater than 9, or HSPF2 greater than 9.5. The annual cap is $2,000. Upgrade your geothermal heat pumps and get a tax credit for 30% of project costs. The system is required to meet energy star certification. The annual cap is $3,200. Upgrade your heat pump water heaters and get a tax credit for 30% of project costs. The system is to meet energy star certification. The annual cap is $2,000. Upgrade your biomass stove/boilers and get a tax credit for 30% of project costs. The system is required to have a minimum thermal efficiency rating of at least 75%. The annual cap is $2,000. Upgrade your solar water heaters and get a tax credit for 30% of project costs. At least half of the energy for the system must be solar. It must be certified by the SRCC or not include swimming pool/hot tub heaters. The annual cap is $3,200.

Table of heating and cooling upgrades, tax credits, requirements, and annual caps. Upgrade your Central A/C and get a tax credit for 30% of project costs. All ENERGY STAR certified packaged systems are eligible. Split systems that are SEER2 greater than 16 and are energy star-certified are eligible. The annual cap is $600. Upgrade your oil, natural gas, or propane heaters/furnaces and get a tax credit for 30% of project costs. Gas furnaces must be AFUE greater than 97%. Oil furnaces must be energy star-certified and be manufacturer-rated for use with a fuel blend that is at least 20% biodiesel, renewable diesel, or 2nd-gen biofuel. The annual cap is $600. Upgrade your oil, natural gas or propane energy-efficient water heater and get a tax credit for 30% of project costs. Gas systems must be energy star-certified models greater than 0.81 UEF (tanks less than 55 gal) or greater than 0.86 UEF (tanks greater than or equal to 55 gal). Tankless systems must be greater than 0.95. The annual cap is $600.

Electric Vehicles

Most people are interested to learn if there will be Inflation Reduction Act EV tax credits. Yes! There’s both a new and used electric vehicle tax credit available! Qualifying households may be eligible to claim up to $7,500 on a new plug-in electric vehicle (EV) or fuel cell vehicle (FCV) and up to $4,000 on used EVs. 

Check out OPPD's Guide to Electric Vehicles to learn more about EVs in the Omaha area, and for advice on selecting the right vehicle for your lifestyle!

Home Exterior Efficiency Upgrades

Your home develops drafts from settling and general wear as it ages —and simple repairs can only go so far. The energy-efficient home improvement credit group helps reimburse homeowners for making energy-efficient upgrades to insulation, adding energy efficient windows and replacing exterior doors. Not only can this help reduce your energy costs by 10-20%, but you’ll enjoy more comfortable indoor spaces that are easier to keep at a set temperature.

Looking to upgrade windows or attic insulation with IRA tax credits? OPPD can also help you offset start-up costs on certain projects with our Weatherization Rebates, saving you even more money on these valuable energy-saving upgrades!

Table of home exterior efficiency upgrades, tax credits, requirements, and annual caps. Upgrade your electrical panel and get a tax credit for 30% of project costs. The install must meet NEC requirements. It must have a minimum 200-amp load capacity. It must enable energy-efficient improvements or energy properties (heat pump, A/C, furnace, etc.) The annual cap is $600. Upgrade your exterior doors and get a tax credit for 30% of product cost. Exterior doors must meet energy star criteria for our climate. The annual cap is $250 per door, up to $500. Upgrade your windows and skylights and get a tax credit for 30% of product cost. Must meet energy star’s most efficient rating. The annual cap is $600. Complete home energy audits and get a tax credit for 30% of costs. Inspection must be completed by a certified home energy auditor and include a detailed, written efficiency audit. The annual cap is $150. Upgrade your insulation and air sealing and get a tax credit for 30% of product costs. Must meet IECC standards 2 years prior to install. Includes most bulk insulation (batt, roll, blow-in, etc.). Also includes air-sealing materials (weather-stripping, spray foam, caulk, house-wrap). The annual cap is $1,200.

*Window tax credit also applies to skylights

Clean Energy Generation & Storage

Home solar is becoming more reliable and realistic every year. Taking advantage of the residential clean energy credit makes it easier than ever for the average homeowner to make some of their everyday energy come from clean generation. The Inflation Reduction Act solar tax credit has provisions to add solar panels and wind turbines to your home to generate renewable power — as well as backup batteries to store that power.

OPPD Solar Rebates can help you save even more on upfront costs while OPPD's Net Metering program allows you to earn money selling back any surplus solar energy. Find answers to all your solar questions on our Customer-Owned Generation homepage.

Table of clean energy generation and storage upgrades, tax credits, and requirements. Upgrade your solar systems and get a tax credit for 30%. Includes labor, hardware, and other install costs. At least 50% of energy generated must come from the Sun. Must provide electricity to the residence (not out-buildings, etc.). Upgrade your small wind turbines and get a tax credit for 30%. Must meet local fire/electrical code requirements. Must provide electricity to the residence (not out-buildings, etc.). Upgrade your biomass stove/boilers and get a tax credit for 30% of costs. Must have a minimum 0.5 kW capacity. Must be an electrochemical fuel source. Must serve your principal residence.

More About IRA Annual Caps/Limits

IRA Credits are subject to a total annual cap of $3,200. Most upgrades have an individual cap for how much you can claim but can be combined with other upgrades up to a certain limit:

  • Windows/doors/skylights, insulation, electrical, gas furnaces/water heaters and central A/C units are subject to a combined annual cap of $1,200
  • Heat pumps, heat pump water heaters and biomass stoves/boilers have an annual cap of $2000
  • Clean energy upgrades (solar panels, fuel cells, geothermal heat pumps) are not subject to a maximum annual cap, allowing you to potentially claim up to 30% of costs


Every homeowner’s tax situation is unique and we encourage you to speak with a tax professional about your eligibility on specific tax credits before committing to any home improvements.

This means that you can claim credits for multiple upgrades over a single tax year — up to a maximum of $3,200. This allows you to upgrade your home strategically and spread the work out over several years to optimize your energy efficiency in a way that fits your budget.

OPPD also has several related rebates under our Save Money, Save Energy program that can help you offset some of the up-front costs and still take advantage of qualifying Inflation Reduction Act tax credits for that year! As always, consult with an OPPD-certified Trade Ally and your tax professional before finalizing any home upgrades.

IRA Resources

Learn more about the IRA and its included upgrades by exploring the following sources:

Department of Energy IRA FAQ
EnergyStar IRA Homeowner Tax Credit Guide
Internal Revenue Service IRA FAQ
Rewiring America
Text of the Inflation Reduction Act

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Download a list of the available IRA upgrades.Click here to download now

 

Still Have Questions?

You can always email customerservice@oppd.com or call 402-536-4131.