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Helpful Benefits of The High Efficiency Electric Home Rebate Act (HEEHRA)

The Inflation Reduction Act (IRA) contains several components, including the High Efficiency Electric Home Rebate Act (HEEHRA). This important legislation could have far-reaching impacts on homeowners in the United States. Here, we look at HEEHRA to understand what it is and how it may benefit homeowners.

What Is The High Efficiency Electric Home Rebate Act (HEEHRA)?

At its core, HEEHRA is designed to promote the installation of more efficient electric heating systems in homes throughout America. It does this by providing rebates and tax credits to eligible households. In addition, as part of HEEHRA, states will be required to execute programs starting in Spring 2023 that allow point-of-sale heat pump rebates when installing qualifying equipment.

Who Qualifies For Maximum Rebates And Tax Credits?

To qualify for maximum rebates and tax credits under the High Efficiency Electric Home Rebate Act, the household must meet certain income requirements. 

Low-income households are those whose incomes are below 80% of their area’s median income level.

Moderate-income households are those whose incomes fall between 80% and 120% of their area’s median income level. 

Fortunately, Fannie Mae has a tool that can help determine your area’s median income level so you know if you qualify as low or moderate income when applying for the program.

How Much Are The High Efficiency Electric Home Rebate ActRebates And Tax Credits?

The amount of rebate or tax credit available depends on both your household income level and the type of heat pump you choose to install. Heat pumps come in three levels: basic (Level 1), mid-efficiency (Level 2), and high efficiency (Level 3).

Low-income households can receive the following rebates:

  • up to $2,000 for Level 1 heat pumps
  • up to $3,000 for Level 2 heat pumps
  • up to $5,000 for Level 3 heat pumps 


Meanwhile, moderate-income households can receive the following:

  • up to $1500 for Level 1 heat pumps
  • up to $2,000 for Level 2 heat pumps
  • up to $4,000 for Level 3 heat pumps 

Additionally, higher-earning households who do not qualify as low or moderate may still be eligible for a federal tax credit worth a maximum of 10 percent off the cost price of their new system if they choose a qualifying model from one of the three efficiency levels listed above.

What Benefits Does Point Of Sale Installation Offer?

With point-of-sale installation, homeowners gain access to faster installation times as well as lower labor costs thanks to reduced paperwork associated with traditional installations. This means that overall savings increase due to reduced overhead costs, allowing homeowners even more incentive towards making energy-efficient upgrades. These savings also extend into long-term energy cost reductions, making this an attractive option all around.  

Conclusion

The High Efficiency Electric Home Rebate Act (HEEHRA) within the Inflation Reduction Act promises substantial benefits toward improving our nation’s energy efficiency through installing better electric home heating systems.

Eligible low and moderate-income owners can receive generous rebates and tax credits depending on their choice of system; while higher earners may still be able access significant savings through a federal tax credit program. 

Plus, state-implemented point-of-sale installations offer quicker turnaround times with less overhead costs associated with traditional installations. All told, this new legislation could have wide-reaching implications across United States homes for years to come.

We will keep you updated as new details emerge about the Kentucky and Indiana incentives.

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