October 2, 2024

Green Energy Makes Homeownership More Affordable

By Senator Jeff Smith

As the ranking Democratic member on the Senate Utilities Committee, I’ve spent much of my career fighting to make utility costs more affordable for families while addressing the urgent need to transition to cleaner energy. 

There’s only so much we can do as policymakers for families to afford their energy costs. Oftentimes, it takes planning and action from individuals to capitalize on new incentives. There are a lot of opportunities for families to save money with the Inflation Reduction Act (IRA) passed by the federal government in 2022. Now is a great time to consider taking concrete steps to help your family lower the cost of owning and maintaining your home. By providing incentives for energy-efficient home upgrades and solar panels, and even electric vehicles, the IRA is not only helping Wisconsinites save money, but also moving us to a greener economy.

The IRA offers substantial support for energy-efficient home upgrades, which can have a massive impact on both utility bills and environmental sustainability. For instance, proper insulation and air sealing can reduce heating and cooling costs by up to 20%. With tax credits available for these improvements, homeowners can now afford to make those critical upgrades that pay off in the long run. And for anyone unsure where to start, the IRA covers the cost of home energy audits, so families can get expert advice on how to make their homes more energy efficient.

In addition to making homes more efficient, the IRA also makes it easier for families to generate their own clean energy. One of the most effective ways to do this is by installing rooftop solar panels. Tax credits now cover 30% of the installation costs, and these can be combined with state-level incentives to bring the cost down even further. Families who install solar panels can save about $300 per year, or $9,000 over the life of the system. 

Heating and cooling costs are a great way to save money too. Heat pumps can transfer heating and cooling more efficiently through the home and they are becoming more efficient than traditional systems. In Wisconsin’s brutal winters, heat pumps can make a significant difference. Through the IRA, families can claim tax credits of up to $2,000 for heat pump installations, with state programs offering additional rebates that cover up to 90-100% of the costs for low-income households. This means that thousands of families in our state could have new, energy-efficient systems installed for little or no cost.

Here in Wisconsin, we’ve received $150 million to help homeowners make these green upgrades. Under our HOME Rebates program, families can receive up to $4,000 for energy-efficient retrofits, and under the High-Efficiency Electric Home Rebate Program, low-income households can receive up to $14,000 for electrical upgrades.                              

While taking advantage of home efficiency incentives, people can also save money while going to and from home with the expansion of tax credits for electric vehicles (EV’s). These credits are available now for up to $7,500 for new vehicles, or $4,000 for used ones, and are helping families save an average of $950 per year on fuel costs. To qualify, a married couple would need to make less than $300,000, or $150,000 for individuals which ensures the credits are targeted toward middle and low-income households. The vehicles must also be built in North America.

By taking advantage of these new incentives, families can make their homes more affordable, save money while also helping us tackle the climate crisis. Now is the time to act for energy efficiency so you can keep a little extra of your hard-earned money.