PINE RIVER — Winter heating costs in northern Minnesota are one of our major annual budget items, and they hit hardest right after Christmas when temperatures plummet.
We all know that making your home more energy efficient will reduce your heating costs, but that means spending money now and often slowly recouping your savings over several years.
As a result, many people put off expensive energy-saving projects and end up spending more each year.
The federal government is currently funding tax dollars through the Inflation Control Act for the 2023-2032 tax years to incentivize energy efficiency improvements in home heating, cooling, and water heating equipment, clean power generation products, and electric vehicles. Provides a deduction.
In addition to saving money on your utility bills for years to come, tax credits can help you reap significant benefits within months of investing in energy-efficient upgrades.
For more information about the program, visit the Department of Energy’s website (Making our Homes More Efficient: Clean Energy Tax Credits for Consumers) or consult your tax advisor.
Home energy efficiency upgrades include electrical panels and circuits, insulation, Energy Star most efficient windows ( www.energystar.gov/products,/most_efficient ), exterior doors, home energy audits, electrical Includes car charger.
These tax credits are limited to 30% of the total cost in most cases, and in some cases, maximum amount limits apply.
Products that generate clean electricity include photovoltaic (photovoltaic) panels, fuel cells, wind turbines, and batteries. The storage battery must have a storage capacity of 3kWh or more.
The tax credit for these items pays 30% of the total cost and has no maximum amount.
This tax credit also applies to heating, cooling, and water heating equipment, such as electric or natural gas heat pumps and heat pump water heaters. Geothermal heat pump. solar water heater; biomass (wood or pellet) stove; Efficient natural gas, propane, or oil furnace. Natural gas, propane, or oil water heating equipment. Efficient central air conditioning.
Most have annual limits ranging from $600 to $2,000.
Another aspect of this overall law (the Inflation Control Act) is that it provides $5,000 to home builders to build, rebuild, or repair energy-efficient homes. The Treasury Department recently released new guidelines ( www.irs.gov/pub/irs-drop/n-23-65.pdf ).
Tax credits are also available for the purchase of new and used electric vehicles. The bill provides a $7,500 tax credit for the purchase of a new electric vehicle and a $4,000 tax credit for the purchase of a used electric vehicle.
In addition to making electric vehicles more affordable to purchase, tax credits can also increase the resale value of electric vehicles.
Federal tax credits provide another push to install energy efficiency upgrades in our homes. As we look to a future where available fossil fuel energy is scarce and its cost uncertain, upgrades made now could go a long way in securing our personal and financial futures.
(Reference to all cited factual information provided upon request, comments and questions are encouraged: BalsamMoon3148@gmail.com)
Douglas J. Weiss and Barb Mann are caretakers and directors of the nonprofit Balsam Moon Preserve in Pine River, a spiritual place of peace, sustainability, and renewal.