Could you get home energy and EV incentives under the…

The new climate law is chock-full of incentives to electrify your home and car, but the specifics are a maze to navigate. To help you find your way through, pro-electrification nonprofit Rewiring America has released an online calculator that tells you which of the incentives you’ll likely qualify for. And over 200,000 people have already tried it. 

“I’m so excited that we put this out because it does seem like it’s being legitimately useful to people trying to figure out what the [law] means for them,“ said Sam Calisch, head of special projects at Rewiring America.

Consumer choice is a big deal for the climate. According to Calisch, more than 40% of U.S. energy emissions stem directly or indirectly ​“from the decisions households make at their kitchen tables” — things like ​“where they get their electricity from, what they use to heat and cool their homes, and what they drive.” 

The calculator can inform those decisions, pointing Americans to the home and vehicle electrification discounts, rebates and tax credits that are, or will soon be, available to them thanks to the Inflation Reduction Act. 

Still, when Canary staff tried the calculator, some furrowed their brows; the results that it delivers can be a little confusing. So think of this article as your unofficial guide to how it works and what you can do with your results. 

Getting to know you

To determine which incentives you qualify for, the calculator asks you for several pieces of information: your ZIP code, homeowner status, household gross income, household size and whether you file taxes as an individual, jointly or as head of household. 

It uses different pieces of that information to determine your eligibility for different incentives. For example, your household income will qualify you for some incentives if it’s less than a certain absolute amount, and for others if it’s below a certain percentage threshold of the median income in your area. The calculator looks that up based on your ZIP code and household size using data from the U.S. Department of Housing and Urban Development. (According to the department, the national median household income in 2021 was $79,900.)

Your homeowner status comes into play because some incentives require you to be a homeowner — or really only make financial sense for property owners. Renters probably don’t want to foot the bill for an updated electric panel or geothermal heating system, for instance, so the calculator dismisses incentives for these types of items.

Before diving in, remember to take the results of the calculator with a grain of salt. It’s gathering just a few pieces of information about your particular income and tax situation, so it can only provide you with a broad-brush picture of your eligibility for incentives and how much they could save you. The incentive programs also have yet to be actually set up by the government agencies that will implement them. But the calculator results are still a great place to start. 

Calculating the savings — from low-income to high-income, from homeowners to renters

Ready to see the calculator in action? Imagine a married couple with two children are contemplating some serious climate-friendly home upgrades: solar on their roof, an electric car in their garage and new electric appliances to replace their aging fossil fuel-powered versions. They live in the Minneapolis ZIP code 55412. Let’s run through a few scenarios varying their household income and whether they own or rent their home. 

Lower-income homeowner: All incentives available! 

First, we’ll give the family a household income of $63,900. They’re considered a low-income household, as are other four-person households in their ZIP code earning up to $89,400, or 80 percent of the area median income. The couple owns their home. Feeding their details into the calculator, we find the family qualifies for all of the incentives the calculator assesses.

The calculator shows that if the family were to take advantage of these incentives, which are available for the next 10 years, they could save $14,000 through upfront discounts. Based on the calculator’s estimate of their tax liability, they could save another $4,149 via credits toward their tax bill. The calculator also provides a projected dollar amount that households could save annually on their energy bills based on types of homes, fuel, etc., in their state: $1,150 in this case.

Moderate-income homeowner: All incentives available except one

What about moderate-income households, making between 80 and 150 percent of area median income? Giving our Minneapolis family an income of $167,500 would put them in that range. They would qualify for every incentive but one: the used electric vehicle tax credit. That’s capped at a household income of $150,000 for joint tax filers.

This family would also be more limited in how it could use upfront discounts. For example, low-income households can apply an $8,000 discount to the full cost of buying and installing a heat-pump air conditioner/​heater, while a moderate-income household can use the discount only to cover up to half of those costs.

Calisch called the upfront discounts ​“game-changing” for low- and moderate-income households. They’ll help families access the long-term benefits of electrification: healthier indoor air quality and lower, more stable bills, he noted. That stability ​“is really critical for these households with high energy burdens” that suffer from spikes in oil and gas prices, such as those caused by Russia’s invasion of Ukraine, he said. Electricity prices have ​“much, much lower volatility, which is hugely helpful for these households.”

Higher-income homeowner: Plenty of tax credits, no upfront incentives

High-income households making more than 150 percent of area median income don’t qualify for as many incentives. Say our Minneapolis family makes $200,000. They don’t get any upfront discounts, but they could take advantage of the clean energy and efficiency tax credits, as well as the home energy reduction rebate program, which rewards homeowners for retrofits that substantially reduce their energy consumption.