As a rule, homeowners want low utility bills and high home values. So, it stands to reason that if you are selling your house, your property will be more valuable if it contains new, energy-efficient upgrades such as added insulation, new windows, and electric appliances that keep it comfortable year-round without high utility costs.
If you’ve been thinking about upgrading your home to make it more energy efficient (including replacing old gas-powered appliances with new electric ones), now’s the time. Thanks to tax credits and rebates from federal and state agencies, local utilities, and others, there is a lot of financial help for these types of upgrades—and more is on the way.
In 2024, California will receive almost $600 million from the federal Inflation Reduction Act (IRA), half of which is to be spent on rebates for low- and middle-income households (up to $14,000 per household) for energy-efficient upgrades like insulation and weatherization. The other half of the $600 million will be for rebates on home electrification, things like heat-pump HVAC systems, heat-pump water heaters, electric stoves, new home electric panels and wiring, and more.
Many of the rebates can be stacked, meaning that, for instance, if you use an $8,000 IRA rebate to reduce the cost of a new heat-pump HVAC system, you can subtract another $1,000 from the cost with a rebate available to customers of Sonoma Clean Power, the electric utility that serves about 80% of Mendocino County households outside the City of Ukiah. You may be able to subtract even more from the overall cost by using various smaller rebates and coupons offered by state organizations.
Right now, there are also IRA tax credits geared toward households with higher incomes. You can claim $3,200 per year for 10 years on purchases of heat-pump HVAC systems, heat-pump water heaters, insulation, and other efficiency upgrades.
IRA tax credits and rebates are also available for tenants and owners of multi-family buildings. If you need to increase insulation, upgrade your electric panel and wiring, replace an old water heater, or install a new heater and air conditioner, the next two years likely are your time frame to do so inexpensively using rebates. The bottom line is that almost everyone has access to incentives that will reduce the cost of home energy improvements.
Given the huge tax credits and rebates, the total lifetime expense of electric appliances could be significantly less than gas. With the move away from gas appliances in California, you’ll be ahead of the curve with state regulation.
My advice is to do the homework on which energy improvements you’d like right away, so you can maximize your use of tax credits and/or rebates. Then, find a certified contractor who can do the work for you, ideally someone who has experience working with utility and other incentive programs. In many cases, the contractor will do the installation, handle the rebate paperwork, and take the rebate off the top of the cost of the job.
A couple of websites you might find helpful in planning are RewiringAmerica.org, which has details about tax credits and rebates, and Switchison.org, which has a comprehensive list of appliance rebates available for Mendocino County residents as well as a list of contractors qualified to do the work.
I’d also recommend a visit to the Advanced Energy Center in downtown Santa Rosa. It’s a showroom and bilingual information center where you can get a tour of electric appliances, learn how they work, find out what rebates you qualify for, and get tips on finding a good contractor.
Special thanks to Suzanne Pletcher for sharing much of this information.
If you have questions about property management or real estate, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you have an idea for a future column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s Bakery.