Inflation Reduction Act: Incentives and Energy Programs for Delaware

The Inflation Reduction Act (IRA) of 2022 represents the largest climate and energy investment in U.S. history, designed to address the climate crisis, advance environmental justice, and put the country on track for a net-zero economy by 2050. The IRA offers numerous federal and state-level incentives for energy efficiency and renewable energy adoption, supporting Delaware’s efforts to increase energy resilience and reduce emissions.

Federal Incentives for Residential and Commercial Energy Efficiency

1. Residential Clean Energy Credit
   Homeowners can receive a 30% tax credit for purchasing residential clean energy systems, including solar panels, wind turbines, geothermal, and battery storage with at least 3 kWh capacity.
2. Energy Efficient Home Improvement Credit
   This credit provides 30% off qualifying energy efficiency improvements with a cap of $1,200 annually. Eligible upgrades include energy-efficient windows, doors, and HVAC systems, with a $2,000 cap for heat pumps and an additional $150 credit for home energy audits.
3. Clean Vehicle Credit
   A credit of up to $7,500 is available for new clean vehicles (e.g., battery electric, plug-in hybrids), while a $4,000 credit applies to qualifying used electric vehicles, encouraging EV adoption.

   
   

State-Supported Incentives: Delaware-Specific Programs

1. HOMES Efficiency Rebate Program
   Delaware’s HOMES program, with an award of $33 million, will offer rebates for comprehensive energy efficiency improvements. Rebate amounts vary by home type and energy savings, with rebates ranging from $2,000 to $8,250 per unit.
2. Electrification Rebate Program
   Another $33 million program focuses on providing rebates for installing efficient electric appliances in low-income households. Rebates from $500 to $8,000 are available for heat pumps, electric stoves, and other energy-saving appliances.
3. Greenhouse Gas Reduction Fund: Solar for All
   Delaware applied for a $100 million grant to support low-income residential rooftop solar, municipal microgrids, and other renewable projects. The initiative targets energy equity, aiming to reach 30,000 low-income households.
4. Training Programs for Energy Efficiency
   Delaware is expanding its clean energy workforce with $1.2 million to train energy contractors and $2 million to train energy auditors. This effort will increase expertise in residential energy audits and ensure Delaware’s energy goals are supported by a skilled workforce.

Additional Federal and State Compliance

Under the IRA, programs and grants are subject to the Davis-Bacon Act (DBA), Build America, Buy America Act (BABA), and the Justice40 Initiative (J40), which mandates that 40% of federal funding benefits disadvantaged communities.

Delaware’s commitment to energy efficiency and renewable adoption under the IRA aligns with the state’s broader Climate Action Plan, making these incentives accessible to Delaware residents and supporting Delaware’s path to a sustainable, energy-efficient future.