Many Americans are seeing quickly rising energy rates on top of their already exasperated and irate high gas prices, which is adding to the financial burden of inflation on individuals and businesses.
The largest yearly increase in more than a decade, the average home power rate in the country increased by 8% in January compared to the previous year. The most recent data, from February, shows an over 4% yearly increase, reaching the highest level for that month and getting close to summer prices, which are often the most expensive.
Due to an increase in the price of natural gas, rates have increased. Additionally, the cost of basic grid maintenance and upgrades has increased due to supply chain disruption.
Energy experts noted that the possibility that these temporary delays are merely the beginning is extremely concerning. Because utilities and regulators are understanding they need to fortify electric infrastructure against natural disasters linked to climate change, like the winter storm that left Texas without power for days last year, they are afraid that electricity bills may grow rapidly for years. In order to cut greenhouse gas emissions, energy providers are also investing more in new power grids, batteries, wind farms, solar panels, and other equipment.
Economic Incentives for Energy-Saving Renovations
The new Inflation Reduction Act of 2022 (IRA) includes multiple home renovation rebates and tax incentives to help Americans achieve such savings. These incentives are designed to help save homeowners and renters hundreds of dollars annually.
The IRA extends tax credits for conducting home energy assessments and installing energy-efficient windows, doors, insulation, water heaters, furnaces, air conditioners, or heat pumps. Additionally, it has earmarked rebates up to $14,000 per home for efficiency upgrades for low- and moderate-income households.
These incentives aim to lower annual energy expenses for consumers who use them by $500 to $1,000 while also lowering the nation’s emissions of greenhouse gases, which contribute to global warming.
How to Beat Rising Energy Prices and Take Advantage of Tax Incentives – Now!
But what are the best ways to take advantage of these tax credits and make the best investment in energy savings?
Switch to More Efficient Types of Heating & Cooling
The 2022 Inflation Reduction Act specifically covers electrical heat pumps that are economical with energy and can heat and cool a house. The Inflation Reduction Act provides reimbursements of up to $8,000 for low- and medium-income families making less than 150% of the local average income, in addition to a 30% tax credit up to $2,000 available to anyone who purchases and installs a heat pump. Some very efficient wood stoves are also eligible.
The act also offers subsidies to low- and moderate-income households to help offset purchase and installation costs for heat-pump water heaters up to $1,750, heat-pump clothes dryers up to $840, and electric stoves up to $840.
Harness Natural Energy
When you combine technologies, your household can really see a difference in the monthly utility bills. For example, by powering an energy-efficient electric heat pump with free electricity via solar panels, you can be one step closer to energy independence!
The Inflation Reduction Act includes incentives for community solar, which are larger solar systems owned by numerous homeowners, as well as a 30% tax credit for rooftop solar and geothermal heating, as well as any accompanying battery storage. For developers who construct homes in accordance with the Energy Department’s Zero Energy Ready Homes standard, it also provides a $5,000 tax credit.
Another way to take advantage of green energy is to have a solar water heater installed. This type of equipment is growing in popularity; it is installed on the roof of the house and heats water using photovoltaic panels. It delivers hot water on command without needing to use gas or electricity to heat an whole tank each time the faucet is opened. It’s a great solution for homes in warmer climates, where there is a lot of sun and little need to heat the entire building.
Upgrade Your HVAC System
In climates like ours in Pennsylvania, heating and air conditioning costs make up the largest portion of residential utility expenses. If appliances and HVAC equipment are older, homeowners can decrease their energy costs by simply updating and upgrading them. Research and development have helped the engineering of HVAC systems evolve in recent decades, leading to better and better energy efficiency. If your system is 15 years old, or more, replacing it with newer equipment can deliver a monthly energy reduction of up to 30%.
For more information on how to keep your family comfortable and save energy in every season, keep following AQM, the newest partner of Sila.