It’s Electrifying! Rebates, Zero-finance Loans and Federal Credits to Green Your Home
By Joy Ma, San Mateo Policy Action Squad
Making the journey to achieve a greener home costs less if you do some planning. With federal tax credits and local rebates, homeowners can take advantage of incentives to install electric appliances and make other energy-efficient upgrades to their homes. The reality is, while the path to making these changes is there, it’s not always intuitive—unless you know where to look. We put together a list of current money-saving opportunities, with a focus on what’s available in the Bay Area, to help you plan your next energy-efficient upgrade.
General Guidelines:
Reduce the project cost with smart choices that save time, labor, energy, power and money
Reduce the costs with available rebates and tax credits
Finance the remainder with zero interest loans
Why make the switch?
The benefits of installing electric appliances are clear. For example, heat pump HVAC (heating, ventilation, and cooling) systems are up to four times more efficient than gas furnaces, making them cheaper to run. Unlike a furnace, they generate no emissions. Plus they provide valuable air conditioning in the summer. Even without financial incentives, a heat pump system is actually cheaper than installing a gas furnace and separate AC.
Efficiency, savings on your utility bill, plus reducing carbon dioxide emissions make heat pumps an efficient and eco-friendly choice.
To sum it up, the top benefits of switching your gas appliance to an electric model are:
Electric appliances are 4X more efficient than gas appliances.
They eliminate major sources of greenhouse gas emissions and other pollutants in your home, in your neighborhood and globally
Rebates, tax credits and loans lower the cost of investment
Let’s dive into what is available. The incentives listed below can be used alone or in combination for maximum savings.
Rebates
Peninsula Clean Energy is offering customers in San Mateo County and the city of Los Banos rebates of up to $3,500 for installing an electric heat pump HVAC unit. The rebate for a heat pump water heater has been increased to $3,000. Additional rebates of up to $1,000 from BayREN for San Mateo County residents can also be added to bring down the cost of installing a heat pump HVAC unit or water heater. There are also bonus rebates for projects completed by March 31, 2023, of another $500 each.
Federal income tax credits
New federal income tax credits are available now through 2030 to provide up to $3,000 annually to lower the cost of energy efficient home upgrades by up to 30%. Home improvements that qualify for the tax credits include heat pump space heating and AC, heat pump water heaters, insulation, doors and windows, as well as electric panel upgrades. For example, get up to $2,000 back on a water heater in one year and up to another $2,000 back on a space heat pump for cooling and heating in another year to stay under the annual limits.
In addition to energy-efficient credits, homeowners can also use the modified and extended residential clean energy credit which provides 30% income tax credit for clean energy upgrades such as rooftop solar, wind energy, thermal geothermal heat pumps and battery storage through 2032.
Zero interest-finance loans
In the San Francisco Bay Area, Peninsula Clean Energy is currently offering 0% loans for electric home upgrades. These loans can be used to finance any costs that remain after rebates have been applied. The 0% loan program provides interest free financing for up to $10,000 per home to cover installation of electric heat pump equipment, water heaters and HVAC units. These loans range from 2-10 years and can be repaid on monthly electric bills.
How do I start?
As our appliances approach middle age or even the end of life, researching before an appliance fails makes it much easier to make the change. The list of resources, articles and websites mentioned in this article and shown below can help you make that important decision. Read a Bay Area member’s journey installing a heat pump water heater, a free electrification guide and a presentation on how electrification is getting easier. You can also share these resources with friends and family who are considering making the change.
Thanks to article contributors Tom Kabat, Margo Meiman and Kathleen Goforth
—————————————————————————
Resources
Peninsula Clean Energy Zero Percent Loan program
Peninsula Clean Energy rebates
BayREN rebates and financing
Federal income tax credits
Pacifica Tribune opinion piece , 2/15/23
San Mateo County-focused talk on how Electrification is Getting Easier
Free Electrification Guide
Peninsula Clean Energy’s All-Electric Project Showcase