Your Guide To Getting Your Hands On Electrification Rebates, Tax Credits and Other Incentives

Maybe you’ve heard the phrase “electrify everything.” But what does that really mean?

The idea is to get a cleaner power grid overall by generating the electricity that powers homes and businesses through carbon-free sources such as wind and solar, instead of fossil fuels such as coal, oil and gas.

Then when we electrify the stuff we use every day (such as stoves, furnaces or cars), we can significantly reduce emissions, because we’ll be plugging into a cleaner power grid.

Burning fossil fuels such as coal, oil and gas to power cars, trucks, planes and trains and to generate the electricity society relies on is the single largest source of carbon emissions that are driving the climate crisis. But the world, including us here in the Southland, is slowly moving towards cleaner power sources that generate less local air pollution and planet-heating emissions.

California has the goal to generate 100% of its power through renewable, carbon-free energy sources by 2045. L.A. aims to get there by 2035. That'll require speeding up the buildout of renewable energy infrastructure and battery storage by a whopping 700%.

The California Air Resources Board projects there will need to be unprecedented growth and build-out of renewable energy sources to meet the demands of the future.

(California Air Resources Board

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LAist)

In 2021, California got about 34% of its energy from renewable sources with most of the rest coming from gas-fired power plants. And the city of L.A. got about 35% of its energy from renewables, with the rest from gas, nuclear and coal.

So creating a cleaner power grid that generates electricity through more renewable energies while electrifying the machines we rely on every day will help significantly lower dangerous planet-heating pollution. If we don’t lower those emissions fast, the most catastrophic impacts of the climate crisis will only become more likely.

But the good news is there are a lot of decisions we can make at home that matter in the long run — and can even save us money. From gas stoves to furnaces to water heaters to clothes dryers, appliances we use every day are some of the biggest contributors to planet-heating emissions and a rise in our utility bills.

“42% of our energy related emissions in this country are tied to decisions we make around our kitchen tables: what kind of cars we drive, how we heat the air and water in our homes, how we cook our food, and how we dry our clothes,” said Ari Matusiak, co-founder and CEO of Southern California-based nonprofit Rewiring America, which created a guide on how to access federal rebates to electrify at home. “What that means is that collectively the machines that we rely on in our day-to-day lives are really the gating item to whether or not we are successful in addressing the climate crisis.”

And all those machines are meant to last a long time, Matusiak said, which is why, for example, choosing to replace that aging gas boiler with a heat pump matters, especially as the energy transition accelerates over the next decade.

These newer, electric machines are also a lot more efficient than traditional fossil-fueled machines, which means they actually use far less energy to do what they're supposed to — e.g. cooling or heating your home. Heat pumps, for example, are three to five times more energy-efficient than traditional methane gas boilers. That means by opting for a heat pump instead of another replacement gas boiler, you can save on your gas and electric bills.

Electric appliances can also help insulate you from wild swings in gas prices. However, you may not see as big of a price drop as you might expect: That’s because what’s in your utility bill isn’t just about how much energy you use. But the current bill structure could change soon.

These new electric machines are currently pretty expensive, but that’s where rebates and other incentives can help. And as electric appliances and cars become more common, prices will go down.

Right now, though, there are a lot of ways you can save money by “electrifying everything.” That’s largely because of available technology and unprecedented funding that's being offered from the federal, to the state to the local level to incentivize electrification. Read on for how to access those incentives.

Federal rebates, tax credits and incentives

The Inflation Reduction Act provides historic incentives for Americans to curb planet-heating emissions at home. It largely does this through tax credits and rebates.

Through the Inflation Reduction Act, you can receive tax credits that could cover up to 30% of the cost to install rooftop solar and battery storage, up to $3,200 per year for certain improvements to insulate your home, up to 100% of the cost of new electric appliances, and tax credits up to $7,500 for a new electric vehicle or up to $4,000 for a used one. How much money you receive depends on your individual situation and income. For example, a six kilowatt rooftop solar installation — the system an average home would need before electrifying — costs about $15,300, and the average tax credit would be around $4,600.  

All in all, this legislation could help lower U.S. emissions more than 40% below 2005 levels by 2030 (The U.S.’s current goal is to cut emissions more than 50% below 2005 levels by 2030). The legislation is also expected to help cut household energy costs by an average of $1,800 per year.

• Rewiring America created an in-depth, personalized guide where you can type in your household size and income level and they’ll identify what federal rebates and credits you’re eligible for. Check it out here.
  
• The White House also has its own guide on all the rebates and tax credits available through the Inflation Reduction Act. Check it out here.

State rebates, tax credits and incentives

From electric vehicles to energy-saving options at home, the state of California has its own electrification incentives.

Depending on your eligibility, Californians can get as much as $24,500 back for purchasing an electric or hybrid vehicle. California incentives also include ways to get fee-free loans to improve energy efficiency or install electric appliances at home, whether you’re a renter or a homeowner.

You can view all of the state incentives at this website. The website also allows you to search for local incentives by zip code.

Local rebates, tax credits and incentives

Your local water and power provider likely has rebates and incentives of its own. The L.A. Department of Water and Power, for example, has an array of programs to help you lower your water use, energy use and utility bills. Check with your local water and power provider to find out what local incentives you may be able to access.

Tell us what your experience with electrification incentives has been like

Have you benefitted from climate rebates and incentives? Have you tried to access these options but faced obstacles? Let us know about your experience by writing to us below.