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Inflation Reduction Act Information for Maryland Residents


From the White House Website

Insulation and Air Sealing

The Inflation Reduction Act provides tax credits and rebates for a range of home improvements that reduce energy leakage – keeping homes warmer in the winter, cooler in the summer, and saving money on utility bills. Insulation material can lower heating and cooling costs by up to 20%, and air sealing (like caulking and weather-stripping) save energy and improve air quality by keeping moisture out. In addition to supporting the upgrades themselves, the Inflation Reduction Act can also cover the costs of home energy audits so that an inspector can identify the best improvement options.



Understanding the New Bill

The Inflation Reduction Act includes several incentivized programs to promote energy efficiency and combat climate change.

Check out a state by state breakdown of funding for the incentives here.

There are two big pushes to watch out for...

Electrification - Carbon Footprint - the process of strategically (end of life machines) replacing combustion furnaces/cars with all electric versions that use clean energy.
Reduce Energy Consumption - one of the best ways to make an impact on how much energy we use is to tighten up our buildings so that HVAC does not have to run as much.

A big part of the bill gives rebates to homeowners who make recommended energy-efficient upgrades to their homes.

It will start with Energy Audit Inspections that may lead to Home Performance retrofitting for measured (modeled) results.

Examples include: 

-Air Sealing
-Duct Sealing

How to Take Advantage of the New Bill

First, a few Key Unknown Answers

  • Likely be some time in 2nd half of 2023
  • Unsure if new rebates can be "stacked" on top of the existing Maryland rebates through the Empower Program (BGE/Pepco)
  • Modeled savings is critical and it will be interesting to see exactly how the rebates tie in.

exampled report of modeled savings

Example of a modeled house through the existing Maryland Home Performance with ENERGY STAR® Program 

Home Performance/ Insulation Rebates

$4.3 Billion for HOMES (Home Owner Managing Energy Savings) Rebate Program

  • Rebates up to $4,000 for home energy efficiency retrofits with modeled energy savings of 35% or more

  • Rebates up to $2,000 with modeled energy savings of 20-34%

  • Services can include insulation, air sealing, heat pump/HVAC upgrades, and more

  • Additional rebates up to $8,000 available for low and moderate-income homeowners

  • Rebates cannot be combined with other federal grants or rebates


WATCH: Check out a HOME PERFORMANCE job and the measured results.

Whole house solutions look to seal your house so your HVAC works less - saving you energy.

This provision of the bill incorporated elements of legislation that Maryland lawmakers voted for called “HOPE for HOMES.”

U.S. Sen. Chris Van Hollen said there are “tremendous savings” in using energy more efficiently.

He pointed to the biggest hold up to a homeowner making improvements in their home to lower energy usage is the up-front cost.

Sometimes the up-front costs overshadow the savings gained over time and the 2022 bill makes getting the work done more attractive and affordable.

Under the Inflation Reduction Act, many homeowners will be eligible to recoup up to 50% of energy improvement costs — up to a maximum rebate of $4,000. Lower-income homeowners could be eligible for more generous rebates of up to 80% of costs, a maximum of $8,000.

Rebates & Training Grants

Maryland residents can expect two major rebate program roll outs, better tax incentives and training dollars for local contractors to learn the key principles in order to keep up with demand.


$4.5 Billion for High-Efficiency Electric Home Rebate Program

  • Rebates for low and moderate-income homeowners for electric system/appliance purchases and energy efficiency upgrades

  • Maximum rebate of $14,000; individual rebates are as follows:

    • Heat pump water heaters: $1,750

    • Heat pump HVAC systems: $8,000

    • Electric stoves: $840

    • Heat pump clothes dryers: $840

    • Electrical panel upgrades: $4,000

    • Insulation, air sealing, and ventilation: $1,600

    • Electric wiring: $2,500

  • Rebates cannot be combined with other federal grants or rebates

Tax Credits

More immediately, the new bill makes changes to tax credits for energy efficiency upgrades.

25C Tax Credit - Energy Efficiency Home Improvements (The Nonbusiness Energy Property Tax Credit)

  • Credit revived and made retroactive for 2022 (at original 10%). It went away and it is back!

  • Starting in 2023, the credit increases to 30% of total installation costs through 2032

  • The current lifetime cap of $500 will be replaced by cap of $600 per measure, with $1,200 annual total limit (exceptions listed below)

  • Eligible services and home improvements include:

    • Heat pumps and heat pump water heaters ($2,000 credit)

    • Insulation and air sealing

    • Energy audits ($150 credit)

    • Energy-efficient HVAC systems (including furnaces, boilers, and central AC)

    • Electrical panel upgrades

    • Energy-efficient windows and doors ($500 credit for doors)

    • Roofs are no longer eligible

25c tax credit table

Stay Informed!

Subscribe to my blog or revisit for updates and they piece things together. We are watching this daily.

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