The Inflation Reduction Act that was signed into law addresses global warming and is intended to slow climate change. That means spectacular benefits for Katahdin Cedar Log Home owners who add green energy and include efficiency measures inside their Log homes and Log Cabins. Let’s review the energy-efficient log home improvement measures available beginning this year, which also apply to new log home construction!
Energy Efficiency Home Improvement Credit
This is the resurrection of what was previously called the Nonbusiness Energy Property Tax Credit, which expired at the end of 2021. The old, expired credit was worth 10% of the cost of installing insulation, windows, roofing, and other improvements to save energy. Credit for 100% of installing energy-efficient furnaces, boilers, and water heaters up to some minuscule limits (between $50 and $500).
The newly revived credit still uses old rules for this tax year. However, starting in 2023, the credit will jump to equal 30% of the costs for all eligible home improvements made during the year. In addition, this credit is expanded to include biomass boilers and stoves, electrical panels, and home energy audits. The new annual limit is $1200 but not the lifetime limit, so spreading out qualifying improvements can reap some rewards. Annual limits for specific improvements range from $150 for home energy audits to $2000 for electric or natural gas water heaters, heat pumps, and biomass stoves and boilers. For this latter category, the $1,200 annual limit may be exceeded.
Residential Clean Energy Credit
This extends and revamps the Residential Energy Efficiency Property Credit for solar and wind power, previously scheduled to expire in 2022 but now extended through 2034. The credit amount jumps to 30% from 2022 to 2032, and the credit winds down to 26% for 2033 and 22% for 2034. Removed from this credit are biomass furnaces and water heaters which were shifted to the above credit structure. Added to the residential Clean Energy Act is battery storage power with a minimum capacity of 3 kWh. For example, Tesla Power Wall stores approximately 13.5 kWh.
Alternative Fuel Refueling Property Credit
If adding an electric vehicle is in your plans, the Inflation Reduction Act also covers another green log home improvement. This credit covers up to 30% of a “qualified alternative vehicle refueling property installed in the home, up to $1000. This translates into equipment purchased to recharge an electric vehicle. This also applies to bidirectional charging equipment, allowing power discharge from a battery pack into your home electrical grid.
Were you planning on including some of these additions to your Katahdin Cedar Log Home? You’ll want to check with your dealer, Big Twig Homes or Log Home Contractor, for timing and installation to take advantage of these credits and make sure that you, as a log homeowner, will receive the benefits and not have them revert to the log home contractor, which was a feature of previous energy tax credits.
If you are ready for the next step, feel free to reach out to Big Twig Homes for more information on our log home packages and log cabin packages. Click this link for a free 15-minute consultation. Big Twig Homes serves all North Carolina, South Carolina, Georgia, Tennessee, and Ohio for Katahdin Cedar Log Homes and Arborwall Solid Cedar Homes.