The Inflation Reduction Act, Colorado Senate Bill 51, and GCEA Rebates: Tax Credits and Rebates Available in 2023

The passage of the Inflation Reduction Act (IRA) will provide Americans with opportunities to offset the cost of energy efficiency improvements to homes and commercial properties, to upgrade heating systems and appliances, to install rooftop solar, and to purchase electric vehicles. The offsets will be available through tax credits and exemptions and rebates. In addition to IRA funding, the State of Colorado is offering tax credits and exemptions, and GCEA provides rebates for a multitude of energy efficient items. This is an exciting time that represents greater accessibility to energy efficient products that may have been out of reach for many Americans, which when installed will bring down the cost of power bills while increasing comfort in homes and businesses. This results in a reduction in carbon emissions which benefits our environment and all of us. The federal government’s goal is to reduce carbon emissions from the residential sector through the IRA by 40% compared to 2005 levels in 2030, and data from the State of Colorado estimates that our state’s total greenhouse gas emissions could be cut in half if electric heat pumps were primarily used to both heat and cool buildings, so although there is a lot of work to be done, we are being provided with tools to help.

The lists below show the different types of tax credits and rebates that are available through the IRA, the State of Colorado, and GCEA. There are different eligibility requirements such as income levels that determine the tax credit and rebate amounts, but this website can help you determine what and how much you might qualify for through the Inflation Reduction Act: https://www.rewiringamerica.org/app/ira-calculator. Consult with your tax advisor for details on claiming the tax credits. For the most up-to-date IRA information including incentive amounts and eligibility requirements, please visit www.whitehouse.gov/cleanenergy.

 

Federal IRA home energy efficiency improvement rebates:

  • Electric stoves
  • Electric heat pump water heaters
  • Electric heat pump clothes dryers
  • Smart electrical panels
  • Updated electrical rewiring
  • Energy efficient window and door upgrades
  • Insulation, air sealing, and ventilation upgrades

 

Federal IRA home energy efficiency improvement tax credits:

  • Home energy audits
  • Adding insulation or installing energy efficient windows & doors
  • Installing an electric heat pump including electrical system upgrades to make a home heat-pump ready

 

Federal IRA home rooftop solar and battery storage system tax credits:

  • Solar systems can be paired with battery energy storage systems
  • Standalone battery energy storage systems

 

Federal IRA electric vehicle and electric vehicle charging equipment tax credits:

  • New EVs for income-qualified households
  • Used EVs for income-qualified households
  • EV chargers installed in rural area

 

Federal IRA energy efficient commercial building tax deductions:

  • Building envelope
  • Lighting systems
  • Heating systems
  • Water heating systems
  • Commercial properties must have a plan to reduce total energy and power costs in certain systems by 25%

 

In addition to the federal tax incentives and rebates available through the IRA, the State of Colorado passed Colorado Senate Bill 51 which allows a 10% income tax credit and a 2.9% sales and use tax exemption through January 1, 2025, for the following:

  • Air-source, ground-source, or water-source heat pump systems including variable refrigerant flow heat pump systems in residential or commercial properties
  • Any residential or commercial heat pump water heater
  • Battery energy storage systems

 

Finally, there are also GCEA rebates to help bring the cost down even further! GCEA energy evaluations are always free, and our full list of rebates, amounts, and eligibility requirements can be found on our rebates page. Following is an abbreviated list of GCEA’s energy efficiency rebates that can be stacked with the tax credits and other rebates:

  • Air-source, ground-source, or water-source heat pump systems
  • Induction stoves
  • Electric water heaters and electric heat pump water heaters
  • Energy Star electric clothes dryers and electric heat pump clothes dryers
  • Battery energy storage systems
  • Used EVs
  • EV charging stations
  • Smart thermostats

 

There are so many more opportunities to build for a cleaner future than ever before and we hope our members will take advantage of the increased funding to help make their homes and businesses more energy efficient and comfortable. For more information, contact GCEA at 970-641-3520.

Alantha Garrison, Energy Use Advisor