How to Take Advantage of Incentives for Energy-Efficient Upgrades
Investing in energy-efficient home improvements can reduce utility bills, increase home value, and qualify for federal and state tax incentives. Many homeowners don’t realize that bundling multiple upgrades—such as solar panels, HVAC systems, and insulation—can maximize savings through tax credits and rebates.
With the right strategy, homeowners in New York, Hawaii, North Carolina, and South Carolina can take advantage of federal incentives and state-specific programs to make their homes more efficient while lowering out-of-pocket costs.
Understanding how these tax credits work, which home improvements qualify, and how to stack incentives can help homeowners maximize their investments.
How Federal Energy Tax Credits Work
The Inflation Reduction Act of 2022 (IRA) expanded energy efficiency tax credits, making it easier for homeowners to offset costs on qualifying home improvements.
Key Federal Programs:
Energy Efficient Home Improvement Credit (25C)
- Covers 30% of the cost of eligible upgrades (up to a yearly cap).
- Applies to HVAC systems, insulation, windows, doors, and home energy audits.
Residential Clean Energy Credit (25D)
- Covers 30% of the cost of solar panels, battery storage, and geothermal systems.
- No annual limit; applies through 2032 before phasing out.
High-Efficiency Electric Home Rebate Program
- Provides income-based rebates for homeowners upgrading to heat pumps, electric panels, and insulation.
- Rebate amounts vary based on household income and state implementation.
Homeowners can combine multiple credits and rebates for maximum financial benefits by bundling home improvements.
State Incentives: Maximizing Savings in Key Locations
Beyond federal tax credits, many states offer additional rebates, incentives, and low-interest financing programs for energy-efficient home upgrades.
California
California leads the nation in renewable energy incentives, making it an ideal state for solar and energy-efficient home improvements.
- Self-Generation Incentive Program (SGIP): Rebates for battery storage systems when paired with solar panels.
- Tech Clean California: Offers incentives for heat pump water heaters and HVAC systems.
- Property Assessed Clean Energy (PACE) Financing: Allows homeowners to finance upgrades with low-interest, long-term repayment plans.
New York
New York provides generous state tax credits and rebates to encourage energy efficiency.
- NY-Sun Incentive Program: Reduces upfront costs of solar panel installations.
- Home Performance with ENERGY STAR®: Rebates and low-interest loans for insulation, heat pumps, and HVAC upgrades.
- NY State Solar Tax Credit: Offers an additional 25% tax credit (up to $5,000) for solar energy systems.
Hawaii
With high energy costs, Hawaii homeowners benefit significantly from solar and energy efficiency incentives.
- Hawaii Renewable Energy Tax Credit: Covers 35% of the cost of a solar system, in addition to the federal 30% tax credit.
- Battery Storage Incentives: Programs like the Battery Bonus provide rebates for adding battery storage to solar systems.
- Hawaiian Electric Rebates: Cash-back offers for energy-efficient appliances and smart thermostats.
North Carolina
North Carolina has strong solar incentives and utility rebates that help homeowners lower costs.
- Duke Energy Solar Rebates: Cash rebates for solar installations on homes and businesses.
- Energy Conservation Rebates: Covers heat pumps, insulation, and smart thermostats.
- Property Tax Exemption: Solar energy systems are exempt from property tax assessments.
South Carolina
South Carolina homeowners can benefit from both state and federal tax credits for energy-efficient home improvements.
- South Carolina Solar Tax Credit: Covers 25% of the cost of a solar system, on top of the federal 30% credit.
- Duke Energy & Santee Cooper Rebates: Offers cash incentives for heat pumps, smart thermostats, and energy audits.
- Energy Efficient Manufactured Homes Incentive: Provides grants for upgrading insulation and HVAC systems in eligible homes.
How Bundling Home Improvements Maximizes Tax Savings
By combining multiple energy-efficient upgrades, homeowners can increase total tax credits and rebates while reducing long-term energy costs.
Example of a Bundled Home Upgrade:
A homeowner in California could install:
- Solar panels (qualifies for 30% federal tax credit & SGIP rebate)
- Battery storage (eligible for additional SGIP rebate)
- Heat pump HVAC system (qualifies for Tech Clean CA incentives)
- Insulation upgrades (eligible for federal Energy Efficient Home Improvement Credit)
By bundling these improvements, they lower energy bills and maximize available state and federal incentives.
Steps to Claim Energy Efficiency Tax Credits & Rebates
- Determine Eligibility – Check which home improvements qualify under federal and state programs.
- Work with Certified Installers – Many incentives require professional installation for eligibility.
- Keep Documentation – Save receipts, invoices, and manufacturer certifications for tax filing.
- File IRS Tax Forms – Use Form 5695 for federal energy tax credits when filing taxes.
- Apply for State & Utility Rebates – Some rebates require pre-approval before installation.
Consulting an HVAC and solar professional can help homeowners navigate available incentives and ensure all possible savings are applied.
Why Professional Installation Matters
Many incentives require products to meet specific energy efficiency standards and be installed by licensed professionals. Working with a trusted HVAC and solar provider ensures:
- Correct system sizing and installation for optimal energy savings.
- Compliance with incentive program requirements to secure full benefits.
- Long-term performance and warranty protection on new equipment.
At Attyx, we help homeowners identify available tax credits, apply for rebates, and install energy-efficient solutions that maximize savings.
