The Biggest Home Improvement Rebates You Can Get From the Government

The Inflation Reduction Act has more than just tax breaks in it. For big home upgrades that use less power, it has some hefty rebates you should take advantage of. From cooktops to HVAC, the two rebate programs that most homeowners can qualify for are called HOMES and HEEHRA. These two federal programs can save you lots of money on a renovation and help to pay for appliances that will cut your utility bill.

HOMES rebates

If you’ve done renovation to your home since Aug. 16, 2022 that reduced your energy usage by 35% or more—or if you plan to make these upgrades before 2031—you should qualify for a HOMES rebate of $4000. For low or middle income households, the rebate for covered upgrades is doubled. This would apply to solar panels, insulation, heating, water treatment, appliances, windows, and lighting that combined reduce your overall power usage by 35%.

HEEHRA rebates

The HEEHRA rebate program targets electrification of home appliances and will reimburse middle and low income households for up to $14,000 in upgrades to major systems and appliances. This includes replacing gas burning stoves and ovens with electric burners or adding an electric heat pump dryer for a discount of $840, but also packs a whopping $8,000 discount on installing an electric heat pump. Other discounts you can access through HEEHRA are $1,750 off an electric heat pump water heater, $4,000 off an electric service center load upgrade, $2,500 off the price of electric wiring, and $1,600 off insulation, air sealing, and ventilation. Since these rebates are set up as a point-of-sale discount to homeowners, you won’t be able to access retroactive payments like with the HOMES rebates.

Upgrades that can be 100% covered by HEEHRA

If you’re upgrading your HVAC system to run on a heat pump, your whole project could be covered by the HEEHRA rebate. Since a heat pump usually costs between $2,500 and $10,000, you could end up with a free upgrade using this program. If you decide to add a heat-pump hot-water heater, you could end up with a double deal, as heat-pump-driven hot-water heaters usually cost between $1,500 and $3,000 to install and you can qualify for a rebate of up to $1,750 for that upgrade. Keep in mind that your renovation could be significantly (up to $30,000) more expensive if you don’t have existing ductwork for a forced air system.

Combining renovations for a HOMES rebate

The HOMES act will reimburse you for up to $8,000 worth of improvements in energy usage, including for insulation if it reduces your energy usage by 35%. Since the average cost to insulate a 2,000 square foot home is between $3,000 and $10,000 and your energy savings will average about 15%, the rebate won’t kick in unless you also replace your windows for an additional 16-24% cut to energy usage. These renovations can be expensive, depending on the size and age of your home, so it’s best to talk with a professional to determine your potential savings vs. cost of installation.

Keep these things in mind when planning

When you’re doing the math on your renovations, it’s important to keep a few things in mind:

• You can’t combine rebates, so if you want to claim both, you should keep your projects separated and with a separate budget.
• The rebates are only good on replacing an older, less-efficient, or gas- or oil-burning system. They won’t cover a new electric cooktop to match the rest of your kitchen renovation if your old one was an efficient electric range.
• The rebate programs haven’t been rolled out entirely yet, so the qualification process is still unclear. Sign up to receive updates from energy.gov here.

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