An earlier version of this article incorrectly said the $500 would come by way of tax credit. The amount is based on estimated savings from implementing energy-efficiency upgrades. A corrected version follows.
Add electric-vehicle readiness, heat pumps, smart thermostats and more to the list of energy-efficiency home improvements that can earn homeowners some $500 in annual savings.
The U.S. Environmental Protection Agency said Tuesday its Energy Star program, which historically targeted water heaters, lower-impact appliances and other upgrades, now includes additional “green-minded” home improvements. Such upgrades are intended to save households about $500 a year on utility bills when the full lineup of suggested steps are in place.
Learn more about the newly named Energy Star Home Upgrade program at ENERGYSTAR.gov/homeupgrade.
In recent years, tax filers have also been able to seek a credit for some of their outlays on Energy Star-rated efficiency and renewable-energy upgrades, although portions of that credit have expired. The EPA has said it is hopeful for congressional extension of those credits this year, citing bipartisan interest in these incentives even in a tightly contested Congress. Fuel cells, small wind turbines and geothermal heat pumps still qualify. For a full explanation of what is covered, check here.
And more: Tax Watch
Like its earlier versions, the program works with manufacturers and retailers for official Energy Star labeling.
Six new home improvements that qualify:
- An ENERGY STAR certified air source heat pump for clean and efficient heating and cooling;
- An ENERGY STAR certified heat pump water heater for super-efficient hot water;
- An ENERGY STAR certified smart thermostat with smart climate controls;
- High-performing ENERGY STAR certified windows and storm windows;
- A well-insulated and sealed attic;
- An electric vehicle charger-ready home.
The action is part of an ambitious promise by the Biden administration to steer the country toward net-zero carbon and methane emissions by 2050, the pollution that’s been responsible for sending Earth’s temperatures higher. And even sooner, the president and others want to cut emissions by at least half by the end of this decade, a pledge in keeping with those from the world’s most powerful economies, and largely reliant on businesses and households to follow suit. So far, government agencies have taken steps to slow climate change in lieu of broad passage of an environmental agenda on Capitol Hill.
“Every American can make a difference in protecting our climate with the choices they make at home — and they can save money while they are at it,” EPA Administrator Michael Regan said in a release.
“If every household took the actions outlined in the Energy Star Home Upgrade [program], the U.S. could cut its residential annual energy use up to 20% by 2050,” he said.
The EPA says that since the 1992 launch of its voluntary Energy Star labeling, education and tax-incentive program, U.S. families and businesses have saved 5 trillion kilowatt-hours of electricity, avoided more than $450 billion in energy costs and achieved 4 billion metric tons of greenhouse gas reduction.
Electric, or air source, heat pumps and electric cooktops and ovens — powered by an electricity grid that itself will need a greater overhaul favoring renewable energy sources — feature in a major push by some lawmakers, local officials and energy and environmental groups. Some in the U.S. are rethinking the longer-run impact of using historically cost-effective and abundant natural gas NG00, +13.91%, which largely runs the electricity grid, along with coal, solar and wind. Some home heating and cooking is directly powered by natural gas, and in some regions, heating oil warms homes.
Last month, New York City created a law that prohibits the combustion of fossil fuels, namely gas, for cooking and heating in select new buildings. Berkeley, Calif., became the first city in the U.S. to ban gas hookups in new construction in 2019. And now at least 42 cities in California, including San Francisco and San Jose, have acted to limit gas in new buildings. Salt Lake City and Denver have also made plans to move toward electrification.
The gas industry would rather target its climate impact by creating renewable natural gas and working to curb methane emissions, while some lawmakers worry that the U.S. will give up too much authority to outside political powers if America steps away from its own gas production.
Extension of these home-energy tax credits beyond their 2023 expiration remains up in the air. They and other incentives that select lawmakers look to pass in support of renewable energy, EV adoption and more are currently held up in a stalled Build Back Better spending bill. Biden has said he will push for climate-change and energy-efficiency efforts to be advanced separate of the current, $4 trillion version of that bill.