The Inflation Reduction Act (and the Bipartisan Infrastructure Law) of 2022 allocates significant funding to make clean energy and safer, healthier homes more affordable for Americans. Much of this funding has been allocated to state-run assistance programs, like EmPower+ and Comfort Homes. Other funding is available in the form of tax credits. More funding is expected to be released in late 2024, as well. Below is an overview of key incentives and where to find more information. 

Home Energy

Available Now:

Tax credits are currently available for certain home energy upgrades.*

  • The 25C Residential Energy Efficiency Tax Credit includes 30% up to $2,000 for air source heat pumps** and heat pump water heaters, and 30% up to $1,200 for some weatherization and electrification upgrades.

  • The 25D Residential Clean Energy Tax Credit includes 30% for ground source (geothermal) heat pumps, certain solar installations, battery storage, and more.

Both 25C and 25D credits are nonrefundable, meaning they can only reduce existing tax liability. Check out these factsheets for more details about these credits: Rewiring America factsheet and IRS factsheet

Home Electrification and Appliance Rebates Program (HEAR)

In 2024, the maximum award amount for the EmPower+ program expanded thanks to the new IRA-funded Home Electrification and Appliance Rebates Program, better known as HEAR. 

The program can help eligible households receive up to $14,000 more assistance than they historically would through EmPower+, meaning you can now receive a maximum of $24,000. This aid is applied to the cost of your project before you receive your out-of-pocket bill. 

Right now, you’re only eligible to receive HEAR funding if you make at or below 80 percent of the State/Area Median Income.

As of right now, only income-eligible homes that heat with electric resistance or delivered fuels (kerosene, propane, fuel oil) can access the $8,000 HEAR incentive for air source heat pumps. Households heating with natural gas are unable to access this $8,000 incentive at this time.

You can receive this assistance by applying for EmPower+ on NYSERDA’s website. Read more about the new funding on our blog. 

Available Later:

Right now, you’re only eligible to receive HEAR funding if you make at or below 80 percent of the State/Area Median Income. More IRA funding is expected later this year (aiming for October 2024) that will be available to people of all incomes, including Home Efficiency Rebates.

Electric Vehicles

The IRA also includes tax credits for electric vehicles. Qualified new electric vehicles may be eligible for up to $7,500 in tax credits, and qualified used electric vehicles may be eligible for up to $4,000 in tax credits. Combined with the Drive Clean Rebate offered in New York, there are many incentives for electric car purchases.

Elective Pay

Businesses, tax-exempt organizations, governments, and others can receive certain clean energy tax credits using elective pay. Learn more from the IRS’ overview of elective pay and frequently asked questions, this resource from The White House, or the relevant NYSERDA webpage.

 

Businesses

Though much of the Inflation Reduction Act (IRA) focuses on consumer savings, the legislation also lowers the cost for businesses to invest in clean energy and energy efficiency. Learn more about IRA business opportunities on NYSERDA’s website.