How the New Climate Bill Helps Your Family Go Green & Cut Cost
With my support, Congress passed new climate and tax fairness legislation that constitutes the single largest investment in addressing the climate crisis in American history. It takes bold action on a national, systemic level and offers direct consumer money-saving benefits—to empower us all to take part in climate solutions.
This legislation is projected to help cut U.S. greenhouse gas emissions by some 40% by 2030, which will get us closer to meeting our Paris Agreement target. Putting America on track to meet our climate goals will save families an average of $500 per year on their energy costs. And families—both homeowning and renting—that take advantage of the clean energy incentives listed below can generate thousands of dollars in savings.
Millions of Texans are eligible for tax credits and rebate programs that will make it easier and more affordable for them to weatherize their homes, upgrade to more efficient appliances, purchase an electric vehicle, install residential clean energy systems, and save money on their energy bills. All of the tax credits are available as of January 2023, but it may take 1-2 years for state energy offices like the Texas State Energy Conservation Office (SECO) to implement the rebate programs.
Rebates will allow low-income homeowners and renters to receive up to 100% of the cost of appliances and installation with a full upfront discount. For middle- and high-income homeowners and renters, federal tax credits for appliances and installation will generate large savings.
Windsor Park Neighborhood Association partnered with Austin Energy and my office for a Climate Conversation discussing how you can get free money to reduce your carbon footprint. You can watch this informative discussion here. Rewiring America has also created a savings calculator, here, for household use as you plan your green investments.
As you begin the planning process for utilizing these tax credits and rebate programs, I welcome your input. Please keep me updated about your experiences with these programs, and don’t hesitate to reach out if there is anything I can do to assist you.
I am updating this page as new information becomes available. Make sure you save your receipts and stay tuned for further details!
You can also sign up for updates from me here, and share your interest in clean energy, climate action, and other federal issues via my short survey.
What can the new law do for me?
Help Purchasing a New Electric Vehicle – up to $7,500 Off
Available Now
The legislation makes it less expensive to purchase a new plug-in electric vehicle (EV) or fuel cell vehicle (FCV) by modifying and expanding the federal tax credit known as 30D. Learn more about how you can get up to $7,500 for buying a new EV at this link.
The start of 2024 brought some new changes to this tax credit for the purchase of an EV. Most importantly, consumers can now have registered dealers deduct the full value of the tax credit at the time of sale. This means that even if a buyer of an EV won’t owe $7,500 in tax in a given year, they can still get the full value of this credit for an eligible vehicle, and they can access this credit at the time of sale (and not have to wait until they file their annual taxes).
2024 also saw the strengthening of “Buy American” provisions which ensure the value of this credit supports American manufacturing and American jobs. The official list of EVs eligible to receive either the full $7,500 credit or a partial credit of $3,750 is available at fueleconomy.gov. But see also this printed list of eligible vehicles.
The law contains eligibility requirements for the credit based on buyer income, vehicle price, vehicle assembly location, battery manufacturing location, and battery component origin.
Qualifying buyers are limited to individuals with a modified adjusted gross income (MAGI) less than $150K (or $300K for joint filers).
Qualifying vehicles must have a Manufacturer Suggested Retail Price (MSRP) of less than $55K (or $80K for vans, SUVs, or pick-up trucks), and meet certain battery manufacturing and component criteria.
While it’s expected most EV buyers will get this credit at the time of sale starting in 2024, one can also file Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-in Electric Vehicles) to claim this credit with an annual tax return.
Help Purchasing a Used Electric Vehicle – up to $4,000 Off
Available Now
To help make EVs more affordable to more Americans — and help them save money on gas long-term— the bill establishes a new tax credit for used EVs called the Previously-Owned Clean Vehicle Credit (25E).
Qualifying buyers can use this credit to get a discount of 30% off the cost of a used EV—up to a maximum of $4K. To qualify for this credit, buyers must have a MAGI of less than $75K (or $150K for joint filers).
Qualifying vehicles must have a MSRP of less than $25K, weigh less than 14,000 pounds, and be at least two years old (model year must be at least 2 years older than the year of sale.) Purchases must be made through a dealer.
To claim the credit, complete Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-in Electric Vehicles and New Clean Vehicles), and file it with your tax return for the year you took possession of the vehicle.
Assistance in Installing a Home EV Charger – up to $1,000 Off
Available Now
I am pleased that key elements of my own EV Charge Act are included in this legislation. Concern about reliable charging infrastructure is a hurdle for many who want to go green. The new law incentivizes businesses and homeowners to install EV chargers by expanding the existing tax credit known as the Alternative Fuel Vehicle Refueling Property Credit (30C) and extending it for 10 years.
Homeowners residing in eligible lower-income or rural census tracts can get a tax credit of 30% of the cost of installing a home EV charger on their property—up to a maximum of $1K. This credit could also help renters by encouraging apartment complexes and other businesses to install EV chargers for residents and customers.
As the climate bill is so new, government agencies have not yet updated their websites to reflect improvements in these incentives. More information on how to claim the 30C tax credit is available when the IRS updates its form 8911.
Austin residents: Austin Energy offers an additional rebate eligible for all homeowners that can further reduce the cost of installing a home EV charger. Homeowners are eligible for 50% of the purchase and installation cost of a Level 2 charging station. The maximum rebate amount from Austin Energy is $1,200 for Wi-Fi enabled charging stations and $900 for non-Wi-Fi enabled charging stations.
Here are the IRS’s current instructions on how to claim this credit and who is eligible – please note that starting in 2023 this credit has been restricted to lower income and rural census tracts. More information is forthcoming from the IRS and Treasury on which specific census tracts qualify.
Credits for Making Your Home More Energy Efficient – up to $3,200 off
Available Now
This legislation significantly expands the 25C tax credit, now called the Energy Efficient Home Improvement Credit, and extends it for 10 years.
Homeowners can receive a tax credit equal to 30% of the cost of all eligible energy efficient home improvements made during the year.
The annual amount homeowners can claim for heat pumps, heat pump water heaters, or biomass stoves is capped at $2,000. Upgrade costs eligible for the credit can include equipment, installation, and labor costs.
Homeowners can also claim up to $1,200 for other energy-efficient improvements including up to: $150 for a home energy audit, $250 for a new exterior door ($500 total for all exterior doors); $600 for new exterior windows and skylights; $1,200 for insulation; and $600 for an upgraded electrical panel.
For more information, refer to the IRS website on the Energy Efficient Home Improvement Credit. For additional information, check out this IRS FAQ on the 25C credit, this ENERGY Star Guide on qualifying purchases, and Rewiring America’s Fact Sheet.
Credits for Rooftop Solar and Other Residential Green Energy – 30% tax credit
Available Now
An estimated 1 million additional Texas households will install rooftop solar panels as a result of this bill’s expanded 25D Residential Clean Energy Tax Credit. This 30% credit applies to purchase and installation costs for:
- Solar panels;
- Solar water heaters;
- Fuel cell property expenditures;
- Small wind turbines;
- Geothermal heat pumps; and
- Battery storage systems.
For more information, refer to the IRS website on the Residential Clean Energy Credit. For additional information, check out this IRS FAQ on the 25D tax credit, this ENERGY Star Guide on qualifying purchases, and this Department of Energy guide to the Rooftop Solar tax credit .
Up-front Discounts on Electric Appliances and other Home Electrification Upgrades – up to $14,000 off
Program Start Date TBD
Electrifying homes can save families hundreds of dollars on their energy bills but can also have high up-front costs. The new law allocates $344 million to help low- and moderate-income households in Texas reduce their energy bills through the High-Efficiency Electric Home Rebate (HEEHRA) program.
Administered by the Texas State Energy Conservation Office (SECO), the program will provide point-of-sale rebates on the purchase of ENERGY STAR-certified electric appliances and other home electrification projects. It may take 1-2 years to get the program up and running, so it is not yet known when the rebates will be available to consumers in Texas. To stay up to date on SECO’s latest guidance, visit its website here.
Low-income households that make less than 80% of their Area Median Income (AMI) will be eligible for rebates that cover 100% of the purchase and installation costs for qualified electrification projects. That means an individual living in the Austin-area who makes less than around $62K a year (or a family of four with an income of less than 88K) could be able to get a new electric stove, heat pump HVAC, and more installed in their home for free.
Moderate-income households making between 80-150% AMI will be eligible for rebates covering 50% of the cost of home electrification projects.
The maximum allowable rebate amount for qualifying upgrades is $14,000 and includes:
- Heat pump HVAC for heating/cooling $8,000
- Heat pump water heater $1,750
- Electric stove, cooktop, range, or oven $840
- Heat pump clothes dryer $840
- Upgraded breaker box $4,000
- Upgraded electrical wiring $2,500
- Weatherization (insulation, ventilation) $1,600
Info for Renters: Renters may be able to use the rebates to purchase portable appliances like window-unit heat pumps and induction cooktops. Renters may also receive other indirect benefits if the owner of their rental unit makes use of the program.
Up-front Discounts on Energy-saving Home Improvements – up to $8,000 off
Program Start Date TBD
The new law will allocate $346 million to help Texas families undertake comprehensive energy-efficient home improvement projects through the Home Owner Managing Energy Savings (HOMES) rebate program.
The rebate is designed to reward homeowners for making energy-efficiency retrofits that achieve greater energy savings. For example, households that reduce energy usage by 20% can get a rebate of up to $2,000, while households that achieve a 35% reduction in energy usage can get up to $4,000.
Low-income households (making less than 80% AMI) are eligible for larger rebates—80% of the project cost up to $8,000.
Administered by the Texas State Energy Conservation Office (SECO), it is unclear when the rebates will be available to Texas consumers. To stay up to date on SECO’s latest guidance, visit its website here.
Please note that homeowners can only receive a rebate from either the HEEHRA program or the HOMES program—not both. However, homeowners are eligible to combine both a rebate from either of these two rebate programs and receive an energy efficiency tax credit at the same time. Check out this resource from Rewiring America for more information.
Note: This resource page was compiled to raise awareness of new clean energy and electrification incentives for constituents and is not intended to substitute for professional financial advice.
Other helpful resources to check out include the White House’s Clean Energy for All site, Rewiring America’s IRA Savings Calculator, and the Database of State Incentives for Renewables & Efficiency (DSIRE).