Learn more below about how you can receive tax credits and other incentives for increasing the energy efficiency of your home, electrifying your home, installing renewable energy or buying an electric vehicle. The intended audience for this page is individuals; if you are a business or other entity, see the Business and Other Entity page for additional information.
Currently homeowners can get tax credits through the IRA to improve energy efficiency and install renewable energy. In general these opportunities apply to a taxpayer's primary residence. In some cases second homes are eligible but these are not available for rental properties occupied by tenants.
Additional grant programs for energy efficiency and electrification for both homeowners and landlords will be forthcoming, likely in early 2024 (see details below).
Because the IRA includes a mix of tax credits and other incentives, the benefits will vary based on the homeowner's specific situation. Rewiring America has a calculator that lets a user input their specific data and see estimated benefits. To see specific scenarios for how the IRA can benefit Americans go to the White House's IRA info guide and scroll to "See how these tax credits can work for families like yours" at the bottom of the page. Also see IRS FAQs about energy efficient home improvements and residential clean property credits.
In addition to the tax credits some households will qualify for grants to make their homes more efficient and to electrify their homes. These grant programs are still being finalized and more information is expected later in 2023 with programs launching in early 2024.
The energy efficiency tax credits are available on an annual basis, which means you can make different improvements each year. For example, you can start with an energy audit and some of the recommended work in one year and then do additional upgrades in subsequent years. The efficiency credits have an annual maximum of $1,200 except for heat pumps and heat pump water heaters where the maximum is $2,000. Below lists the available credits and this fact sheet from Rewiring America summarizes qualified electrification upgrades:
Learn more about all of the efficiency tax credits
HOMES (Home Owner Managing Energy Savings) Rebate Program
The HOMES program grants individual states funding to provide homeowners and landlords (including multifamily buildings) rebates for energy efficiency improvements. Wisconsin will receive $74,904,830 for this program. The state of Wisconsin will determine the final program design and, following federal approval of that design, launch the program.
Once launched, rebates will be available for energy efficiency retrofits ranging from $2,000-$4,000 for individual households and up to $400,000 for multifamily buildings. Up to $2,000 will be available for retrofits that reduce energy use by 20% or more, and up to $4,000 for retrofits saving 35% or more. Available rebate allowances will double for low and moderate-income homes.
More details for this program will be available in summer or fall 2023, when the State of Wisconsin creates its plan. We expect the program to launch in early 2024.
High-Efficiency Electric Home Rebate Program
The High-Efficiency Electric Home Rebate Program grants individual states funding to provide homeowners and landlords (including multifamily buildings) rebates for home electrification, including electric panel upgrades, heat pumps, induction stoves, etc. Wisconsin will receive $74,470,200 for this program. The state of Wisconsin will determine the final program design and, following federal approval of that design, launch the program.
Once launched, rebates will be able to cover up to 100% of cost for households at or below 80% of area median income (which was $89,400 for a family of four in Dane County in 2022) and 50% for households between 80-150% of area median income. Households above 150% of area median income are not eligible for this program.
More details for this program will be available when it is launched, likely in summer/fall 2023. Rewiring America has a factsheet about the program in more detail here.
Tax credits of up to 30% of eligible expenses for residential solar installation are available, with no dollar cap or income qualifiers. These credits are available to all costs associated with solar installation as well as any battery storage.
A typical residential rooftop installation in Wisconsin is about 7 kW and costs about $24,000 (costs will vary based on size, complexity of installation and other factors). The tax credit for a $24,000 installation is $7,200, which would reduce the installation cost to $16,800.
Learn more about solar energy installations.
Under the IRA there are two sections that lay out tax credits for electric vehicles. Preliminary guidance from the IRS suggests that the rules will be slightly different under each section.
Purchasing New electric vehicles
IRS guidance on EV credit for purchased vehicles, including links to the forms required to submit for credit.
Purchasing Used electric vehicles
Leasing new electric vehicles
When you lease a vehicle the company leasing you the vehicle can access a different, commercial vehicle EV tax credit. Typically companies pass those savings onto you as the person paying for the lease. The preliminary IRS guidance indicates that leased EVs do not fall under the same Buy American requirements as purchased EVs. That means that some vehicles that are not eligible for a tax credit if you purchase the vehicle will be eligible for a tax credit at lease. (In IRS terms, it’s the difference between a Section 30D credit and a Section 45W credit.)
A tax credit is a dollar-for-dollar reduction in the amount of income tax you would otherwise owe. You claim this annually as part of your annual tax return. By contrast, a rebate is an upfront discount that gives you cash back after you make a purchase, and typically happens more quickly than a tax credit.
How To Receive a Tax Credit
To apply you for tax credits you should save applicable receipts and submit for tax credits as part of your annual tax return. See IRS guidance for more detail on what forms to submit with your tax return.
If you make home updates in 2023, you can claim the relevant tax credits on your 2023 tax return (which you typically file in spring 2024).
Always check with your contractor or retailer before purchasing systems to ensure eligibility.