Wisconsin Electrification Incentives
Tax credits, rebates, and other incentives for electrification available to Wisconsin homeowners.
The incentives for home electrification in Wisconsin include Focus on Energy home electrification and appliance rebates, home efficiency rebates, and federal tax credits.
Focus on Energy is a special agency that administers energy and efficiency rebates for Wisconsinโs utilities, including We Energies and Alliant Energy. They issue three types of rebates that could be used to cover the costs of electrification:
First, the Wisconsin Home Efficiency Rebates (โHOMES rebatesโ) applies to upgrades that significantly improve the energy efficiency of your home. You can use this for things like insulation and air sealing, but in the context of electrification you could also use it to pay for an upgrade from a fossil-fuel heating system to a electric heat pump. The Wisconsin HOMES rebates arenโt income-limited, but can be rather complex to apply for.
The Wisconsin Home Electrification and Appliance Rebates (โHEAR rebatesโ) are perhaps the most obvious rebates for electrification. These are pretty straightforward to apply for, but high-income households will not qualify for them.
Focus on Energy calls the HEAR and HOMES rebates collectively the โWisconsin IRA Home Energy Rebatesโ because funding for them was provided under the federal Inflation Reduction Act of 2022.
Finally, Focus on Energy also provides some smaller rebates and โinstant discountsโ for heat pumps you can use to cover costs not covered by HOMES or HEAR rebates.
Now letโs look at each of these rebates and the federal tax credits in more detail.
Wisconsin Home Efficiency Rebates
The Wisconsin HOMES rebates cover the costs of โwhole-homeโ energy efficiency upgrades. With this program, you start with an efficiency audit. Your auditor will give you a report identifying the things you could do to improve the overall energy efficiency of your home. If you ultimately make upgrades whose modeled effect is over a 20% improvement in overall efficiency youโll be eligible for a HOMES rebate. If you make improvements with a modeled improvement of 35% or more in efficiency, youโre eligible for a higher rebate.
Examples of things you could do that would qualify would include: replacing an older fossil-fuel powered heating system with a heat pump HVAC system, replacing or adding insultation, or sealing ducts. You may need to make more than one improvement to get to the 20 or 35% improvement threshold.
Wisconsin Home Efficiency Rebate Categories
up to 80% of AMI
up to 150% of AMI
Notes:
- Wisconsinites of any income can benefit from the these home efficiency rebates.
- To determine which tier of rebate you are eligible for, compare your household income to your Area Median Income (โAMIโ), which is determined by the federal Department of Housing and Urban Development (details below).
- If your primary goal is electrification, consider using the HEAR rebates instead โ they are more straightforward to apply for. However, HEAR rebates are income-limited, so for higher-income households HOMES rebates may be the way to go.
- You can potentially use both the HOMES and HEAR rebates to maximize your total benefit from incentives, but you (or your contractor) will be need to be thoughtful about which rebates to apply to each improvement.
Wisconsin Home Electrification and Appliance Rebates
The Wisconsin HEAR rebates are more straightforward than the HOMES rebates because they donโt require an audit or modeling. If you make an investment in an eligible improvement (and meet the income qualifications), youโll be eligible for the rebate.
Focus on Energy is waiting for final approval from the federal Department of Energy for its program. We expect the Wisconsin HEAR rebates to be available by the end of 2024.
Expected Wisconsin HEAR Program Rebates
up to 80% of AMI
up to 150% of AMI
Notes:
- You can take up to $14,000 of these rebates, total, across multiple years.
- To determine which tier of rebate you are eligible for, compare your household income to your Area Median Income (โAMIโ), which is determined by the federal Department of Housing and Urban Development (details below).
- You canโt claim both a HEAR and HOMES rebate for the same thing.
- Your โMain Service Panelโ is where the circuit breakers for your home are. Youโll need an electrician to tell you if you need to upgrade your panel. (See Preparing your Home for Electrification for more information.)
- The combined total of rebates for qualifying cooktops, ranges, and clothes dryers canโt be more than $840.
- These rebates will not be available retroactively, so if you think you meet the income qualifications you might want to wait a few months on your electrification work.
- In the IRA, these rebates are called High Efficiency Electric Home Rebates. Sometimes people refer to the part of the IRA that includes them as the High Efficiency Electric Home Rebate Act, which leads to the somewhat tortured acronym HEEHRA and the phrase โHEEHRA rebatesโ.
Additional Wisconsin Electrification Rebates and Discounts
Focus on Energy also administers rebates and โinstant discountsโ for heat pumps that are not funded by the IRA. Given their size, youโll probably want to use the IRA energy rebates first if you qualify for them:
Focus On Energy Electrification โinstant Discountsโ and Rebates
($500-700 for household income up to 80% of AMI)
Notes:
- Your utility must participate in Focus on Energy for you to be eligible. (Customers of the two largest utilities in southeast Wisconsin โ We Energies or Alliant Energy โ are eligible. Check your utility.)
- To determine if you are eligible for the higher rebate amounts, compare your household income to your Area Median Income (โAMIโ), which is determined by the federal Department of Housing and Urban Development (details below).
- You canโt use these rebates to get paid twice for what the HEAR or HOMES rebates cover, but you can use them to cover portions of the cost not covered by those rebates.
Income Qualifications for Wisconsin Home Energy Rebates
The Wisconsin home energy rebates and additional heat pump rebates have tiers and/or eligibility rules based on hour household income and how it compares with your Area Median Income (โAMIโ). The Department of Housing and Urban Development maintains AMI data, which varies by location and the number of people in your household. This is the 2024 AMI data for the Milwaukee area:
Income TIERS for Wisconsin IRA ENERGY Rebates (Milwaukee Area, 2024)
The information in the table above applies to homeowners in Milwaukee, Ozaukee, Washington, and Waukesha counties. Check HUDโs web site if you live in another county.
According to Focus on Energy, the fastest and easiest way to get income-qualified is to share your most recent federal 1040 tax return. For 2024, they use the sum of lines 1abc, 2ab, 3b, 4ab, 5ab, 6ab, 7, and 8 from your 2023 tax return as your income for this purpose.
Federal Electrification Tax Credits
Wisconsinites can also use certain federal tax credits to offset electrification costs not covered by rebates.
Most of the federal tax credits for home electrification are from Section 25C of the Internal Revenue Code. You can claim them on Form 5695 as part of your annual tax return. There is also an EV charger tax credit in Section 30D of the Code. Claim it on Form 8911 if you qualify.
Federal Tax Credits for Home Electrification
Here are some important details and suggestions:
- You can only claim up to $2,000 per year in credits for heat pump water heaters or heat pump HVAC, but you can claim the full credit in multiple years. It may make sense to make those upgrades in different years, therefore, to get maximum benefit (i.e., $4,000).
- The credit for wiring upgrades for heat pump water heaters and HVAC is also limited to $600 per year, again making it likely to be more beneficial to make those investments in different years.
- You must have a tax liability in excess of the value of the credits to use these effectively. The IRS will not send you a check if you donโt owe tax. However, note there is a difference between having tax liability and needing to write a check to the IRS in April, because you likely have tax withheld from your paycheck. If your tax liability after your tax credits is lower than what you have had withheld, the IRS will send you the difference. This is how most people benefit from these credits.
- You can include a contractorโs labor in your cost when you claim the credit.
- Homeowners can only claim the credit for home energy audits from individuals with certain credentials. Those typically cost over $1,000 in the Milwaukee area, so use this credit if you can, but donโt let it drive your decisions.
- Only taxpayers in eligible census tracts can take the EV charger credit. The eligible tracts are those the government considers โnon-urbanโ and or โlow incomeโ. You can check your eligibility with this tool from the federal Department of Energy. You might be pleasantly surprised by what the government considers non-urban or low income.
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