Go Green to Save Green
Renewable energy and energy-efficient technologies help bring down energy costs and create jobs, while reducing dependence on fossil fuels and lowering greenhouse gas emissions. SoDak 350 is working to spread the word about new programs that will make these technologies more affordable for South Dakotans, paving the way for a clean energy future for all.
It's an exciting time for clean energy & climate action.
In 2022, Congress passed the largest ever federal effort to combat the climate crisis in U.S. history - the Inflation Reduction Act (IRA). This historic piece of legislation invests $369 billion over the next ten years to fight climate change and make clean technologies accessible and affordable for all Americans. The package of tax credits, rebates, grants, and loan programs will help state and local governments, tribes, businesses, utilities, nonprofits and community organizations, and individuals bring down greenhouse gas emissions and transition to a sustainable economy.
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The new climate law is expected to generate 1.5 million new jobs by 2030. Together with investments from the Bipartisan Infrastructure Law and the CHIPS and Science Act, the IRA is expected to reduce total U.S. greenhouse gas emissions by about 40% by 2030. It also includes historic investments towards addressing environmental inequalities in communities that have been historically overburdened by pollution.
How can South Dakota families benefit?
Thanks to programs in the new climate law, South Dakota households could save thousands of dollars on energy costs and tax payments. The average household could qualify for over $10,000 in rebates and tax credits and save $1,800 per year on energy bills.
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The first consumer incentives — tax credits on residential clean energy, energy efficiency upgrades and electric vehicles — launched in January 2023. The IRA also allocates over $68.5 million to South Dakota for home energy efficiency and electrification rebates aimed specifically at low- and middle-income families. These rebates will be rolled out in late 2023 and will bring down the up-front cost of whole-house renovations and efficient appliances ranging from stoves to clothes dryers, helping bring these cost-saving technologies to the families that need them most.
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The IRA also contains a host of new grant programs for state, local, and tribal governments that will be rolling out over the next year. Some of these grants are distributed automatically to states via formula grants, while some require competitive applications. These grants represent an opportunity to attract new businesses and cultivate a homegrown clean jobs economy in our state - an opportunity that South Dakota can't afford to miss. It is up to these government agencies to proactively prepare for funding opportunities and to take the lead in accepting and/or applying for these funds to ensure South Dakotans aren't left behind in the clean energy transition. Learn more about what state and local governments can do to take advantage of the IRA.
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Where to start?
With new programs rolling out over the course of 2023, South Dakotans should start planning soon to take full advantage of available funds. Start by scheduling a home energy audit to identify your home’s biggest energy efficiency needs. Tools like Rewiring America's IRA savings calculator can help to determine your eligibility and identify which programs may be best for you to maximize energy savings.
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Explore our summaries below to learn more about programs available now in South Dakota!
Energy Efficient Home Improvement Credit
What does it cover?
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The Energy Efficient Home Improvement Credit (25C) will pay consumers back 30%, or up to $1,200 per year, on the cost of home weatherization improvements, like insulation, air sealing or efficient windows and doors.
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25C also covers up to $2,000 per year for efficient heat pumps and heat pump water heaters. It includes a 30% tax credit up to $600 for households who need to upgrade electrical panels to accommodate new efficient appliances. Finally, it also offers an $150 credit per household to conduct a home energy audit,
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Who qualifies?
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All residents (both homeowners and renters) living in noncommercial housing qualify for the 25C tax credit.
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What's the benefit?
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Home weatherization, like insulation improvements and air sealing, helps make your home less "leaky" and reduces the amount of energy required to heat and cool your home. Reducing energy waste can save you hundreds of dollars a year and bring down carbon emissions.
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Heat pumps — which are really combined air conditioning and heating systems — are one of the most effective technologies for cutting residential energy costs, saving homeowners anywhere from $100 to $1,200 per year on utility bills and preventing 1-8 metric tons of carbon dioxide emissions per year. Modern heat pumps do well in cold climates, and can comfortably heat a home when outdoor temperatures are down to negative 31 degrees!
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When does it start and end?
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The credit applies to projects completed between January 1, 2023 and the end of 2032. These tax credits can be applied year after year, so a household can install projects multiple years in a row and receive the full tax credit each time.
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Where can I start?
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Start by scheduling a home energy audit to identify your home's biggest energy efficiency needs and map out which improvements you can make over the next few years to maximize your energy savings. Check the ages of your furnace and air conditioner to see if they are nearing the end of their useful life to determine if it's time to replace them with a heat pump system.
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Where can I learn more?
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Calculate your savings: Rewiring America IRA Savings Calculator
Frequently asked questions: IRS FAQs About Energy Efficient Home Improvements
Residential Clean Energy Credit
What does it cover?
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The Residential Clean Energy Credit (25D) covers 30% of the cost of home renewable energy projects. This includes rooftop solar panels, geothermal heat pumps, solar water heaters, fuel cells, small wind turbines and home battery systems that store energy from the sun to power electric appliances at night.
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The 30% credit applies to the full cost of the project, including labor, equipment, permitting and inspection fees, and necessary upgrades to roofs, wiring or electrical panels.
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Who qualifies?
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There are no income or location limits on this tax credit. If you don't own your own home, you can still qualify for a 30% tax credit if you subscribe to a community solar project.
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What's the benefit?
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Rooftop solar and other at-home renewable energy projects can save you tens of thousands of dollars by allowing you to generate your own carbon-free electricity instead of buying it from the utility. When paired with home battery storage, they can also help keep your home powered during grid outages caused by disasters like winter storms or derechos.​
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When does it start and end?
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This credit is applied retroactively to January 1, 2022, so any project completed in the last year can qualify. The full 30% credit will be available until the end of 2032. It then reduces slightly to 22% in 2033 and 24% in 2034.
Where can I start?
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Check out these tips for finding a solar installer:
Choosing the Right Solar Installer
Finding the Best Solar Installers Near You
Solar Installers in South Dakota
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Where can I learn more?
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Calculate your savings: Rewiring America IRA Savings Calculator
Frequently asked questions: IRS FAQs About Residential Clean Energy
Homeowner's Guide to Going Solar
Homeowner's Guide to the Federal Tax Credit for Solar Photovoltaics
Walk Me Through It: A Step-By-Step Guide for Consumers Going Solar
Clean Vehicle Credit
What does it cover?
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The Clean Vehicle Credit (30D) covers up to $7,500 for new electric vehicles (EVs) and $4,000 for used electric vehicles, depending on your income. The credit applies only to electric vehicles with a maximum Manufacturer Suggested Retail Price of up to:
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$55,000 for new electric smaller cars and sedans
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$80,000 for new electric SUVs, trucks, and vans
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$25,000 for used electric vehicles
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Additionally, new Made-in-America rules for final vehicle assembly and EV battery manufacturing will be phased in during 2023. Check this list to see which vehicles qualify.
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Who qualifies?
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To qualify for the new car credit, your income may not exceed:
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$300,000 for married couples filing jointly
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$225,000 for heads of households
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$150,000 for all other filers
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To qualify for the used car credit, your income may not exceed:
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$150,000 for married couples filing jointly
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$112,500 for heads of households
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$75,000 for all other filers
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What's the benefit?
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Despite their higher up-front cost, electric vehicles are about three to six times cheaper to operate than gas-powered vehicles - saving hundreds to thousands of dollars per year. Switching to an EV means you don't have to deal with volatile swings in gas prices. And as the typical driving range for EV batteries keeps getting larger, EVs can now meet the vast majority of driver's range needs.
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When does it start and end?
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The 30D credit started on January 1, 2023 and runs until the end of 2032. However, in 2024, a new mechanism will essentially turn the tax break into a point-of-sale discount, so families that can’t afford to wait for tax season can experience those savings up front. Families should review the rules to decide when may be the right time for them to purchase an EV.
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Where can I start?
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Find an EV dealer near you and check this list to find qualified models.
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Where can I learn more?
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IRS Guidelines on Used Clean Vehicle Credit
IRS Guidelines on New Clean Vehicle Credit
What You Need to Know About EV Tax Credits
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