Oregon Homeowner’s Guide to Energy Rebates & Tax Credits

Good news for Oregon homeowners – you have access to a variety of energy incentives and tax credits that can drastically reduce the cost of energy upgrades.  These incentives range from cash-back rebates from local energy companies to long-term tax credits. Trying to sort out energy credits, rebates, and tax incentives can be a bit overwhelming and it may be hard to know where to start.  In this guide, we will explore the different types of energy efficiency incentives available in Oregon, how you can qualify for them, and which programs are best suited for your HVAC or energy efficiency upgrade project.

Tax Credits vs. Rebates

A tax incentive is an exemption, deduction, or credit allowed by the government which allows a homeowner to reduce their taxes owed or increase a tax refund. Tax credits are typically available for certain energy-efficient products and upgrades.

Energy rebates are incentives offered by energy companies, local governments, or other organizations to encourage consumers to purchase energy-efficient products and conserve energy. Rebates are typically a one-time payment or discount given directly to the customer after they buy and install an eligible product.

What Programs Are Available?

If you have been waiting to do an energy efficiency upgrade there is no better time than 2023. Oregon homeowners can take advantage of rebates that energy companies such as PGE and NW Natural Gas offer, as well as through the Energy Trust of Oregon. 

Energy Efficient Home Improvement Credit

Section 25C of the Inflation Reduction Act of 2022 is a tax credit that allows homeowners to claim up to 30% of the cost of qualified energy efficiency improvements to their homes. The credit is available for a variety of improvements, including:

• Variety of heat pump products
• Air conditioners
• Gas furnaces

Certain improvements must meet applicable Energy Star requirements. The credit is capped at $1,200 per year, with an additional annual limit of $2,000 for heat pumps. The credit is available for improvements made after December 31, 2022, and before December 31, 2032.

Energy Trust of Oregon – Savings Within Reach 

Savings Within Reach is an Energy Trust of Oregon program that makes home energy upgrades more affordable for households that qualify based on income. The program offers cash incentives for qualifying projects, allowing you to enjoy a more comfortable home while spending less on energy-saving upgrades.

NW Natural Gas

NW Natural Gas has ongoing rebates for first-time and existing customers. Qualifying new homeowners can receive a rebate when switching a home heating system from electric or oil to a new high-efficiency natural gas furnace after natural gas is brought to your home for the first time. Existing customers can get money back when upgrading to a high-efficient natural gas furnace with a NW Natural Preferred Contractor like Jacobs.

PGE Peak Time Rebates

PGE’s Peak Time Rebates is a program that offers rewards for adjusting your energy consumption during peak hours when energy demand and prices are highest. You can choose how to participate in each event and there is no fee for joining. Reducing your energy usage during the Peak Time Event, which usually lasts for 3 to 4 hours when energy demand and prices are high shifts energy use away from peak times and makes a positive impact.

Carrier Cool Cash

The Carrier Cool Cash promotion encourages homeowners to purchase high-efficiency Carrier systems for residential add-on and replacement purposes. Under this promotion, homeowners are eligible for a rebate if they buy a qualifying Carrier system or a qualifying unit and control. However, this offer cannot be combined with any other rebates sponsored by Carrier. Additionally, Carrier dealers may have their own local offers on financing, service agreements, or extra rebates. You should reach out to your Jacobs to learn more about what kinds of offers you should know about.

Energy Star Rebates

Energy star rebates are also widely available throughout the state. Energy Star is a program created by the EPA to help consumers save money and reduce energy usage by selecting energy-efficient products that have been approved by the government. By purchasing an eligible product you can qualify for up to $500 in rebates from your local power company.

Are There Other Programs Available?

In addition to the federal and state tax credits and energy star rebates, Oregon homeowners can also access additional incentives such as low-interest loans, grants, and other renewable energy programs. The state offers several loan programs for energy efficiency projects through the Oregon Department of Energy Home Performance with Energy Star Program. In 2022, the Oregon legislature passed SB 1536 which, among other things, supports heat pump installation in rental homes.

How Do I Apply For These Programs?

The IRA tax credits are available to qualified Oregon homeowners who have purchased and installed energy-efficient products or upgrades. To apply for this federal tax credit, homeowners must submit Form 5695 with their state and federal income tax returns. The form must include proof of purchase, such as a receipt or invoice. Application for other programs can be found on their website or you can get a home evaluation at the Energy Trust of Oregon to see how you qualify.

What Type of Residence Qualifies For These Credits?

The Energy Efficient Home Improvement Credit is a great way for homeowners to save money on their energy bills and reduce their carbon footprint. If you are considering making energy efficiency improvements to your home, be sure to see if you qualify for this tax credit.

Here are some additional details about the Energy Efficient Home Improvement Credit and deductions under the IRA:

• Guidelines are being updated regularly as the IRS works on guidelines.
• The credit is available for existing homes.
• The credit is not refundable, meaning that it can only reduce your tax liability, not give you a refund.
• The credit is available to homeowners.
• The credit is not available for improvements that are made to rental properties.
• There are some business credits available that allow a business owner to claim a credit for each qualified energy-efficient home sold or leased to another person as a residence during the tax year.

If you have any questions about the Energy Efficient Home Improvement Credit, please consult with a tax professional.

Can I Combine These Rebates With Other Incentives?

Sometimes. The IRA can be combined with other local incentives to maximize savings. It is important to note that not all local rebates and credits are compatible with the Inflation Reduction Act tax credits. Some rebates and credits may have restrictions on who is eligible to claim them, or they may only be available for certain types of improvements. It is important to check with each program to see if there are any restrictions on the rebates and credits you are interested in claiming.

Are These Credits Refundable Or Nonrefundable?

Credit refunds vary from program to program. Both the Energy Efficient Home Improvement Credit and the Residential Clean Energy Property Credit are nonrefundable personal tax credits. A taxpayer claiming a nonrefundable credit can only use it to decrease or eliminate tax liability. A taxpayer will not receive a tax refund for any amount that exceeds the taxpayer’s tax liability for the year.

How Long Do These Programs Last?

It depends on the program. Almost all of the IRA tax incentives will be around for another 10 years so you don’t have to tackle all your projects at once. In fact, in some cases, it is best for you to stagger them and claim upgrades each year.  Some programs, like NW Natural, PGE, and Energy Trust of Oregon, change incentive amounts about every 6-12 months or so.

Understand and Take Advantage of Energy Incentives

Financing energy-efficient home upgrades can be expensive, but by understanding the different Federal, State and corporate programs available, you can take advantage of these incentives and start saving money on your energy bills today.