The Inflation Reduction Act (IRA) introduced several tax credits and incentives designed to support the transition to clean energy. What does the IRA mean for homeowners considering EV home charger installation?
There are various ways the legislation enables you to earn a home charging IRA credit for EV charger installations. In a similar manner to the previous federal incentive program, IRA incentives help homeowners add Level 2 chargers to their homes and purchase EVs. However, the new provisions are more extensive than previously offered.
One facet of the IRA works to provide a rebate (via tax credits) of up to 30% of the charging equipment and installation costs, however, it is important to note that the maximum federal rebate for this program is $1,000.
If you installed a Level 2 earlier in the year, prior to the enactment of the IRA, don’t worry. The IRA’s home charging credit for EV charger installations is retroactive to January 1, 2022, so any purchases and installations made in the calendar year are eligible.
Many states, local jurisdictions, and utilities also offer installation incentives, which can be combined with the federal tax credit to further multiply your savings. Additional cost savings can be realized if your electric vehicle manufacturer has partnered with an installer to provide free standard installations or discounted custom installations, depending on the complexity of your installation and the need for panel upgrades.
The road to electrification and energy sustainability is constantly evolving. Accordingly, while the previous federal EV credit program did not incorporate bidirectional charging equipment, energy storage projects, or chargers for two- and three-wheeled vehicles, the new measure does. As the technology behind electrification continues to advance, new policies are created to adapt to these changes.
Adding a bidirectional charger can provide a source of short-term backup power to your home as well as charge your car, however, the enhanced capabilities behind this make them more costly than traditional chargers. The IRA credits can be used to offset this incremental cost.
Under the previous legislation, energy storage projects were only eligible for tax credits if they were connected to a solar power project. The IRA changed this and energy storage projects are now eligible to receive the 30% rebate, even if they are a stand-alone setup.
The IRA further extends this credit to autocycles, such as the three-wheel design of the Nimbus One, which features the pricing and convenience of a motorbike with the enclosure and insulation of a car, and other new, smaller vehicles for city living. The IRA also provides coverage for charging equipment of electric motorcycles.
The IRA includes incentives that can support electrification projects, with a 30% tax credit on solar panel installations, up to $2,500 for rewiring, and up to 30% for smart electric panels. These credits can make an EV charger installation in older homes that need upgrades more affordable for homeowners. The 30% credit incorporates a variety of expenses, including solar panels, power cells, batteries, labor, permits, and developer costs among others.
The solar tax credit offers even more potential savings for those installing both home charging and residential solar panels to charge their EVs. You can earn both the solar tax break and home charging IRA credit for EV charger installations – two significant clean energy tax incentives in the IRA.
There are other ways for homeowners to earn more in tax credits:
Parts of the legislation created a National Electric Vehicle Infrastructure (NEVI) Formula Program to invest $5 billion in developing public EV charging infrastructure and lowering costs for at-home charger installation, further encouraging EV adoption. The program is being implemented, largely on a state-by-state basis, by the U.S. Department of Transportation. Each state must submit an EV Infrastructure Deployment Plan to access these designated funds. As of September 2022, all 50 states, the District of Columbia, and Puerto Rico had received approval for their EV charging station building plans, along approximately 75,000 miles of U.S. highways.
In addition to funds for state efforts, 10% of the NEVI Formula monies were set aside to fill national network gaps through discretionary grants. A competitive grant program was established with this funding to facilitate EV charging access in rural and underserved communities.
One of the most important facts to know about charging an EV is that 80% of charging is performed at home, generally while the car’s driver is sleeping. Installing a Level 2 charger at your home makes the ease of charging during your downtime possible, saving you time in your daily commute.
How do you find qualified, experienced contractors who can be trusted to install your charger and help you earn a home charging IRA credit for EV charger installations?
Qmerit is the leading electrification partner trusted by major auto manufacturers, EVSE OEMs, Utilities and Fleet Management Companies, with over 260,000 EV charger installations to date. Our network of vetted installers across North America can help you get the most out of IRA credits with installation solutions.
Contact Qmerit for electrification made easy by a company you can depend on – we’re here to help!