The 2022 Inflation Reduction Act marked a pivotal moment in America’s push toward climate reform and the ongoing battle to mitigate the effects of today’s environmental crisis.
But what exactly do the contents of this new legislation entail? Well, let’s begin with the basics.
The Inflation Reduction Act builds on the 2021 Bipartisan Infrastructure Law, also referred to as the Infrastructure Investment and Jobs Act of 2021. Signed into law by President Biden on August 16, 2022, the Inflation Reduction Act focuses on growing our country’s clean energy economy through incentives that make investing in green energy alternatives more accessible while creating new environmentally-focused jobs for thousands of Americans across the country.
The program was drafted at a federal level, allocating roughly $400 billion in accessible funding for consumers and businesses interested in upgrading their energy practices. However, the implementation of these financial incentives will occur at a state level, with many states offering additional opportunities for their residents to save.
For instance, in Maryland, consumers can save up to $1,000 on home solar panel investments, as much as $3,000 on the purchase of new electric or fuel cell electric vehicles, and receive up to 50 percent back on improvements related to home sealing and insulation. And that's just the start of it!
Individually, the Inflation Reduction Act and its related state-specific incentives offer an opportunity for each of us to assess our current energy habits, identify areas where we can improve, and make the most of our investments with funding opportunities that greatly reduce the costs associated with making these lifestyle changes.
In order to best take advantage of these various incentives, it's important to first understand the different ways that funding can be issued.
The first category you’ll want to make note of is incentives that are offered as tax credits.
Tax credits work by offsetting the amount you owe on your annual tax bill. They’re applied directly to your tax statement, making them incredibly valuable if you have an amount owing at the end of the year but less so if you do not. Here’s an example:
Say you owe $5,000 in annual tax expenses but qualify for a tax credit of $7,500. This credit will effectively reduce your bill to zero, but the remaining $2,500 will remain unused. Unfortunately, excess credit cannot be issued in the form of a cashback refund, although in some instances, any remaining value can be carried over and applied to future tax years, helping to spread your savings further.
Under the Inflation Reduction Act, there are three major federal tax credit opportunities worth remembering, the Residential Clean Energy Credit, the New and Previously-Owned Clean Vehicle Credit, and the Energy-Efficient Home Improvement Credit.
The next category of financial incentive you’ll want to make note of are tax rebates.
Unlike tax credits, tax rebates *do* offer you the opportunity to receive a cashback refund on your energy-saving upgrades — sort of like a thank you for choosing to invest in a clean energy future.
Consumers should be prepared to pay for these investments upfront, as it’s not common for rebates to be issued at the point of sale, but this may change in the future as further measures are taken to make these opportunities more accessible to lower-income households.
Under the Inflation Reduction Act, there are two key federally-funded rebate programs to remember, the Home Energy Performance-Based, Whole House Rebate Program (HOMES), which supports retrofitting homes with improved HVAC and insulation systems, and the High-Efficiency Electric Home Rebate Act (HEEHRA) which offers funding towards home electrification projects.
And finally, the last group of financial incentives you’ll want to know about are grants. Think of them like rebates but in reverse.
With a grant, instead of receiving funds after you make an investment, you’ll apply to receive this funding beforehand, *granting* you the finances needed to make the purchase in the first place.
They’re a bit like loans, except grants don’t have to be paid back — even better!
Now, as we mentioned earlier, while the Inflation Reduction Act was created at a federal level with incentives offered across the country, its implementation will vary from state to state, with many states offering additional energy incentives to help their residents take their upgrades even further.
For consumers living in Maryland, some of the most common funding opportunities include those covering the installation of more efficient heating and cooling systems, investments in clean energy sources like solar power and the purchase of electric vehicles.
Below is an overview of the home and lifestyle changes you may want to consider making and their associated statewide funding opportunities.
Want to know more about the Inflation Reduction Act at a federal level? Click here!
If you’re stuck on what improvements will benefit you, your family and your utility bill the most, consider starting with a home energy audit!
During a home energy audit, a licensed auditor will visit your home to conduct an in-person walkthrough, assessing each room for energy use, asking questions about you and your household's daily habits, and offering advice on ways that you might be able to improve.
It’s a good idea to take some time to reflect on the ways you currently use energy in your living space before your auditor arrives. The U.S. Department of Energy recommends asking yourself the following questions as a starting point:
Once your audit is complete, your auditor will send you a final report outlining your current usage habits and the opportunities available for you to adjust and improve. It’s a great resource for you to refer back to as you investigate the financial incentives available to you both locally and nationally and decide on which things you may want to upgrade or change!
The Inflation Reduction Act’s Energy-Efficiency Home Improvement Credit offers existing homeowners and renters the chance to subsidize the cost of a home energy audit. Through this federally-funded credit, households can claim 30 percent of the cost of an audit, up to a value of $150, now through December 2032.
Passed in 2008 by the Maryland General Assembly, Maryland's EmPOWER Maryland Energy Efficiency Act set a statewide goal of reducing household electricity usage and peak demand levels by supporting programs that provide consumers with cost-effective solutions to reduce their consumption and improve their home’s energy efficiency.
Designed at a state level by the Maryland Energy Administration (MEA), the programs are managed throughout Maryland by utility providers, with the following companies participating.
If your utility provider participates in an EmPOWER program, your household may qualify for a no-cost home energy assessment. Click here to find out what options are available to you!
For low-income customers, EmPOWER programs are managed by the Maryland Department of Housing and Community Development (DHCD) and can offer qualifying households energy-efficient material and equipment installations at no cost, beginning with a home energy assessment.
In order to be eligible, a household must be a customer of one of the following participating utility companies.
And meet the household income guidelines outlined in the chart below.
Once your household has been deemed eligible, a local agency will reach out to schedule a home energy audit, using the results of this assessment to determine the no-cost energy upgrades that are right for you — easy!
You can learn more about the EmPOWER Maryland Limited Income Energy Efficiency Program (LIEEP) and access the program application by clicking here.
You might not think it, but your home’s sealing and insulation can be one of the biggest contributors to sky-high monthly energy bills. Leaky doors, windows, walls and rooftops can cause your home to lose hot or cold air at an elevated rate, forcing your HVAC system to work overtime trying to regulate temperature.
In fact, the U.S. Environmental Protection Agency estimates that, on average, homeowners can save as much as 15 percent on annual heating and cooling expenses by installing additional insulation and properly air-sealing their homes — that’s roughly 11 percent of a home’s total energy expenses!
For Maryland residents, the good news is there are a few different opportunities available to help assist homeowners and renters with the costs of installing these home weatherization upgrades. Here are three opportunities that you’ll want to know about.
The Weatherization Assistance Program (WAP) is a federally-funded program offered through the U.S. Department of Energy that helps low-income households reduce their energy usage through a variety of no-cost weatherization and energy-efficient home improvements, including the repair or replacement of windows and doors and the installation of window film, awnings, solar screens, insulation and more.
Qualification for the fully-funded improvements depends on your household's average monthly income, with the guidelines for 2023 outlined in the chart below.
You can learn more about the Weatherization Assistance Program (WAP) by clicking here.
Under EmPOWER Maryland’s utility-sponsored programs, homeowners may also qualify for 50 percent rebates on home improvements related to air sealing and insulation.
As a reminder, EmPOWER programs are managed by six of Maryland’s utility providers, and as such, you must be a customer of one of the following companies in order to qualify for the program’s incentive opportunities.
Available incentives can vary between utilities, so it’s best to contact your provider directly to find out what incentives are available to you. You can find links to each provider’s EmPOWER program offerings by clicking here.
Additionally, low-income households may qualify for no-cost home insulation upgrades in their attic, floors and/or walls through the EmPOWER Maryland Limited Income Energy Efficiency Program (LIEEP).
Just like EmPOWER Maryland’s utility-sponsored programs, households eligible for the EmPOWER Maryland Limited Income Energy Efficiency Program (LIEEP) must be a customer of one of the following utility companies.
As well, qualifying households must once again meet the income specifications outlined in the chart below.
You can find out if your household is eligible and access the program’s application form by visiting the following link.
Installing a high-efficiency heating, cooling and ventilation (HVAC) system in your home can lead to improved air quality, increased comfort and lower energy bills — and for those looking to make the upgrade, heat pumps are the way to go!
Heat pumps offer a more efficient, all-in-one solution to traditional furnace and air-conditioning systems, heating and cooling your home while protecting the climate and offering you some major savings along the way.
Curious to know exactly how much a more efficient HVAC system could save you? Check out this simple Savings Calculator from ENERGY STARto find out!
Ready to invest? Awesome! Keep the following incentives in mind to make the most of your spending.
Maryland’s Residential Clean Energy Rebate Program provides incentives for homeowners looking to purchase and install renewable energy generating systems on their properties — and geothermal systems that include the installation of a ground source heat pump are eligible!
The program has a total estimated budget of $4,600,000 annually and functions on a first-come, first-served basis while funding lasts, with applications for the fiscal year of 2024 opening on September 1, 2023.
Under the program, geothermal energy-generating systems can qualify for a $3,000 rebate, providing they meet the following critieria.
You can find out more about Maryland's Residential Clean Energy Rebate Program and access the FY24 application form by clicking here.
Beyond access to fully-funded home insulation upgrades, low-income households that qualify for the EmPOWER Maryland Limited Income Energy Efficiency Program (LIEEP) may also be eligible to receive furnace cleaning, tuning and safety repairs at no cost.
As a reminder, eligible households must be a customer of one of the following six Maryland utility companies.
And be under the maximum income levels outlined in the chart below.
Once your household has been deemed eligible, the program’s complimentary home energy audit will determine whether or not furnace maintenance will benefit your home’s energy efficiency and carry out any recommended repairs/improvements at no cost.
Find out more about the program and access the current application form by clicking here.
Did you know that water heating accounts for nearly one-fourth of the average household's energy consumption? Unfortunately, it’s true! And it can equate to some pretty hefty energy bills, costing consumers around $400-600 every. single. year. — yikes.
We do have some good news, though! These days there are plenty of more efficient water heating options on the market that can help your household to save. A tankless water heater, for instance, runs, on average, 8-34 percent more efficiently than traditional storage water heating models, and heat pump water heaters go even further, working 2-3 times more effectively!
To put this into financial context, for a family of four, the shift to an electric heat pump water heater from a standard electric water heater can offer a savings of roughly $470 annually (that’s more than $4,500 over the lifetime of a system)!
While the upfront costs associated with making these improvements are something to consider (costing anywhere from $500-$3,000), as a Maryland resident, there are a few ways you can make the upgrade and save.
Through the Residential Clean Energy Rebate Program, Maryland households can install a solar water heating (SWH) system and receive $500 back on the costs associated with purchase and installation.
The rebates are offered on a first-come, first-served basis while funding lasts, and in order to qualify, eligible solar water heating (SWH) systems must meet the following specification.
Program applications for the fiscal year of 2024 open on September 1, 2023. Click here for more information about the incentives available and access the application form today.
Additionally, as part of the EmPOWER Maryland Limited Income Energy Efficiency Program (LIEEP), low-income households may qualify for no-cost water heating improvements, providing these upgrades are recommended through the program’s initial home energy audit.
Potential incentives are available to customers of the following utility companies.
And in order to be eligible, qualifying households must have an annual income level below the maximum values outlined in the chart below.
You can read more about the program and apply to have your home assessed through the following link.
One of the simplest shifts consumers can make to their home energy habits is investing in energy-efficient appliances, and the best part is these changes are generally renter-friendly!
The first thing you’ll want to look for when investing in any energy-efficient appliance is the ENERGY STAR seal of approval.
ENERGY STAR-certified appliances offer more efficient (and equally effective) alternatives to traditional appliance models, having met a set of stringent standards outlined by the U.S. Department of Energy and the U.S. Environmental Protection Agency.
To give you an example, an ENERGY STAR-certified refrigerator, on average, runs 15 percent or more efficiently than fridges that meet the federal minimum efficiency standard.
If you’re looking to level up your home appliances, you’re in luck because opportunities to save are plentiful! Make sure to investigate the following opportunities before you make any purchases.
The ENERGY STAR Rebate Finder is a tool designed to connect consumers with opportunities to save on ENERGY STAR products and appliances.
To find available rebates, simply input your zip code into the search bar, and the Rebate Finder will provide you with a comprehensive list of rebates and special offers on ENERGY STAR-certified products that are offered by ENERGY STAR partners in your area!
You can access the tool by visiting the ENERGY STAR website here.
EmPOWER Maryland’s utility-sponsored programs offer customers of participating utilities a variety of rebate opportunities on efficient home lighting improvements and investments in Energy Star-rated appliances.
In order to be eligible for potential rebate opportunities, you’ll want to ensure you’re a customer with one of the following utilities.
Find out what rebates are available to you by clicking here.
Similar to the utility-sponsored EmPOWER Maryland programs, the EmPOWER Maryland Limited Income Energy Efficiency Program (LIEEP) offers an opportunity for low-income households to receive efficient lighting and refrigerator retrofits at no cost, providing these upgrades are recommended through the program’s initial home energy assessment.
Qualifying homeowners must currently be a customer of one of the following companies.
And have a maximum income level that sits below the values outlined below.
You can find more details about the EmPOWER Maryland Limited Income Energy Efficiency Program (LIEEP) by clicking here.
Maryland's Clean Burning Wood and Pellet Stove Rebate Program offers homeowners the chance to receive up to $700 back on the purchase and installation of a qualifying clean burning wood or pellet stove at their primary residence.
The goal of the program is to assist homeowners in replacing electric, non-natural gas fossil fuel heating systems and old wood/pellet stoves with cleaner alternatives.
In order for a new wood or pellet stove to be eligible, it must meet or exceed the stove type’s specified particulate emissions per hour limit as well as possess an Environmental Protection Agency (EPA) published Higher Heating Value (HHV) efficiency rating that is 75 percent or higher.
The exact criteria for each stove type can be found in the chart below.
Funding for the program is available on a first-come, first-served basis, with applications for the 2024 fiscal year opening soon. You can learn more and check on the program’s current application status by clicking here.
Did you know that Maryland currently ranks 17th in the nation for solar energy adoption? There are currently enough solar panels installed to power 153,000 homes, which is pretty awesome, considering just three years ago, the state ranked 26th!
Financial incentives, offered at both a state and federal level, as well as the growing affordability of residential solar energy systems, are playing a critical role in this increased adoption — and the best part is, the future of solar is only getting brighter.
Today, there are a few different statewide incentives available to Maryland residents that can help make investing in clean energy sources more affordable. If you’re looking to join the clean energy movement, consider the following opportunities.
Earlier, we mentioned that the Residential Clean Energy Rebate Program offers funding toward the purchase of geothermal energy systems with ground source heat pumps as well as investments in solar hot water heaters, but the program’s mandate to increase residential access to clean energy systems extends beyond these two opportunities.
Under the Residential Clean Energy Rebate Program, Maryland homeowners can also receive money back on investments in solar PV panels and solar shingles. Below is a complete breakdown of the rebate program’s available incentives, as documented by the Maryland Energy Administration (MEA), including their required system capacity ranges.
The program’s annual funding has a total capacity limit of approximately $4,600,000, with rebates allocated on a first-come, first-served basis. Applications for the 2024 fiscal year open on September 1, 2023 — access more details, including the FY24 application form, by clicking here.
The Maryland Energy Storage Income Tax Credit offers residents the opportunity to receive a tax credit on the installation of a residential energy storage system.
For households that have access to clean energy sources like wind or solar power, energy storage systems provide a means of storing excess generated power, equipping households with a reserve that can be used in the event of an unexpected outage, as a means of going off the grid during peak hours when electricity is most expensive and getting rewarded through utility-sponsored buyback programs (more on this below).
The Maryland Energy Storage Income Tax Credit awards $300,000 in credit opportunities each year to residential taxpayers, with funding awarded to households on a first-come, first-served basis. As of July 25, 2023, the program currently has $61,287.00 left in funding for 2023, with more to come in 2024.
For residential properties, the total credit value is calculated as either $5,000 or 30 percent of the total installed costs of the energy storage system, whichever value is lower.
You can find out more about the credit, including details on how to apply, by clicking here.
Now, up above, we mentioned that consumers with energy storage systems have the opportunity to get rewarded by participating in a utility-sponsored buyback program — but what exactly does that mean?
Well, a buyback program, also known as a net metering program, is an agreement between a residential solar customer and a utility provider where the customer will sell any additional power they generate from their solar panels (beyond what they consume in their own home) back to the grid, in exchange for credit on their monthly electricity bills.
For consumers, it's an opportunity to save on utilities month-to-month, and for utility providers, it's a great way to help gain access to additional resources that can help alleviate grid pressure during times of peak demand — a win, win!
In Maryland, net metering guidelines indicate that any credit earned will be applied directly to a customer’s electricity bill each month by their utility provider, with annual credit expiring in April of each year. At this time, any excess credit remaining on a customer's account will be paid in cash at a similar value to the annual average electricity wholesale rate.
Talk to your utility provider to learn more about the net metering opportunities available to you!
Don’t have access to solar panels at home? Don’t worry! Community solar programs offer similar incentives with solar panels housed offsite. Find out more about Maryland’s Community Solar Pilot Program by clicking here.
Electric vehicle registrations in Maryland are on the rise, with 68,628 vehicles on the road as of March 2023. It’s a huge step toward the state’s goal of getting 300,000 zero-emission vehicles on the road by 2025, and various state incentives (alongside those offered through the Inflation Reduction Act) are only making it more appealing for consumers to make the switch.
If you live in Maryland and are considering buying an electric vehicle, make sure you take advantage of the following opportunities!
As of July 2023, consumers purchasing an electric vehicle or fuel cell electric vehicle can take advantage of a tax credit up to a value of $3,000 through the Maryland Department of Transportation's Excise Tax Credit for Plug-in Electric Vehicles.
In order to qualify, vehicles must meet the following specifications.
If eligible, qualifying vehicle purchases can receive the following credit values, depending on the type of vehicle acquired.
You can find out more about Maryland's Excise Tax Credit for Plug-In Electric Vehicles by clicking here.
In addition to the purchase of a new electric or fuel cell electric vehicle, the Maryland Energy Administration's Electric Vehicle Supply Equipment (EVSE) Rebate Program offers rebate opportunities for individuals looking to install a qualifying electric vehicle charging station in their home.
The rebate covers the costs involved in the purchase and installation of a home charging station up to 40 percent, with a maximum rebate value totaling $700.
The rebate opportunities offered through the program are available on a first-come, first-served basis. You can learn more about the Electric Vehicle Supply Equipment (EVSE) Rebate Program by clicking here.
The Maryland Department of Transportation’s Motor Vehicle Administration also offers special High Occupancy Vehicle (HOV) Permits to owners of zero-emission, electric vehicles that allow for unrestricted access to HOV lanes, regardless of passenger numbers. Shorter commute times? We’re in!
Permits are available for a fee of $5.00 and are valid through September 30, 2025.
In order to qualify, a vehicle must meet ALL of the guidelines outlined in the chart below.
Find out more about the Maryland Motor Vehicle Administration’s Electric Vehicle HOV Permits and apply for a sticker of your own through the following link.
Now that you know what statewide incentives are available in Maryland, it’s time to take action!
As we mentioned earlier, a home energy audit is the perfect place to start planning what upgrades are right for you. Once you know what improvements you want to make, contact a qualified contractor and apply for the incentives that will help you save!
You may also want to consider checking what incentives exist through your utility provider. There are plenty of privately offered opportunities that can help take your investments even further. Good luck and happy saving!
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