Starting in 2023, residents in Wisconsin can save more than ever before on energy-efficient home upgrades. Not only will these upgrades save you money on your utility bill, but they may also be eligible for a rebate from Focus on Energy or a federal income tax credit.

In 2022, Congress passed the Inflation Reduction Act. This act includes funding to help people cut their energy use and install renewable energy systems. As of January 1, 2023, new tax credits are available reducing the cost of energy-related home upgrades.

The Inflation Reduction Act provides federal tax credits and deductions that empower Americans to make homes and buildings more energy efficient, reduce energy costs, and help reduce demand as we transition to cleaner energy sources.

For Homeowners

You may be eligible for an Energy Efficient Home Improvement Credit covering up to 30% of energy-efficient home upgrades (e.g., insulation, furnaces, heat pumps, and more). Plus, you can take advantage of the Residential Clean Energy Property Credit, which provides up to a 30% income tax credit for the purchase and installation of clean energy equipment. There are annual limits on the amount and combination of tax credits a taxpayer can claim. Please visit the IRS website for more information. Focus on Energy rebates are separate from tax credits, and you are encouraged to take advantage of both! See the table below for more information.

The Section 45L Tax Credit for Energy Efficient New Homes was updated and extended through 2032 and includes $2,500 for ENERGY STAR^® certified single-family new homes, $2,500 for ENERGY STAR certified manufactured homes, and $500 per unit for ENERGY STAR certified multifamily units meeting the ENERGY STAR® Multifamily New Construction National program requirements. Larger credits are available for homes certified to Department of Energy’s Zero Energy Ready Home Program or multifamily projects meeting prevailing wage requirements.

Be sure to consult the Home Energy Tax Credits and Energy Efficient Home Improvement Credit sections of the IRS website and/or your tax professional when planning your project. Note: Focus on Energy rebates may impact the amount of the tax credit for your project. See question four of the IRS’s frequently asked questions for more information.