How To Save Money When Upgrading An Electrical Panel

Background
Electrical panels control the electricity you use. Electricity from your utility company is transferred to the electrical panel where energy is distributed to different circuits throughout your home. By upgrading your home’s electrical panel, more energy will be distributed throughout your home, enabling more appliances and devices to be simultaneously powered without overloading the panel. Upgrading your electrical panel can ensure your home’s electrical system can accommodate your future electrical choices such as adding a larger water heater or a faster electric vehicle (EV) charger. Improvements or replacements to panelboards, sub-panelboards, branch circuits, or feeders are considered upgrades to the electrical panel for federal tax purposes. As part of the federal Inflation Reduction Act, you may be able to use a tax credit to improve or replace your electrical panel (see below).

Federal Tax Credit and Requirements
1. Electric Panel Upgrade Tax Credit
a. The tax credit is in effect for home improvements purchased and made from January 1, 2023 – December 31, 2032.
b. The Electric Panel Upgrade Tax Credit is part of the Energy Efficient Home Improvement Tax Credit. The Energy Efficient Home Improvement Tax Credit may enable you to qualify for a tax credit up to $3,200. Of that amount, up to 30%, with a maximum of $600, may be claimed for any improvement to, or replacement of, an electric panelboard, sub-panelboard, branch circuits, or feeders. See our webpage for additional opportunities to save money and save energy with tax credits: www.savingenergytips.org
c. Electrical panel upgrades must be installed in conjunction with and enable the installation and use of any qualified energy efficiency improvements (e.g., heat pump water heater, heat pump cooling and heating system); be installed in a manner consistent with the National Electric Code; and have a load capacity of at least 200 amps.
d. To claim your tax credit, you will need to file Form 5695.

2. IRS Requirements
a. The electrical panel must be upgraded in the home that is your principal residence. The principal residence, which must be in the U.S., can be a house, mobile home, manufactured home, cooperative apartment, condominium, or a houseboat.
b. New construction and residences you rent out as a landlord are not eligible for this tax credit.

If you or someone you know need help paying for utility bills or appliances — including air conditioning, you can contact Wildfire, a non-profit organization with partnerships across the state of Arizona. The Arizona Department of Economic Security (ADES), through the Low Income Energy Assistance Program (LIHEAP), offers additional help with utility bills for qualified households.

*Please note the above information taken from federal government websites is subject to change. We recommend checking the relevant website(s) for updates. We also recommend checking out our webpage for additional opportunities to save money and save energy: www.savingenergytips.org

For more information: [email protected] or (602)252-9227.