How to make your Texas home more energy efficient and get money from the government

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As Texas summer temperatures rise, so do energy bills because air conditioners are working hard against the brutal heat. In some cases, they’re working extra to cool homes that are leaky and under-insulated. Old appliances also use more power than newer and more efficient ones.

Improving how well a house maintains its temperature and converting more appliances to run efficiently on electricity can lower bills, reduce harmful air emissions and make homes more comfortable, energy experts say.

Federal tax incentives from the Inflation Reduction Act can help homeowners reduce their tax bill. Additional federal rebates — at least some will be applied at the time of purchase — could be available for Texans as soon as 2025.

The average Texas household could save at least $481 a year by installing a heat pump to cool and heat their home, said Amanda Sachs, policy associate with Rewiring America, a nonprofit focused on electrification.

“It’s really important to make sure that folks can pay their energy bills,” Sachs said. “It’s important to make sure that we’re on track to meet our climate goals as a country, and we can’t do that without switching homes — residential buildings — to electrification and more efficient systems.”

Texas is especially vulnerable to heat, Sachs said, as climate change pushes temperatures higher. Operators of the state’s electric grid have flagged the potential for power outages this August and expect skyrocketing power demand in coming years.

Texas didn’t adopt a statewide energy code until 2001, according to the Building Codes Assistance Project. Many homes may be under insulated and leaky, said Jennifer Amann, senior fellow with the American Council for an Energy-Efficient Economy buildings program. A state bill to create a goal for utilities to reduce residential and commercial customer electricity use by 1% failed last session.

Federal tax credits can be used year after year, so Amann said “thinking of a plan for how to do the improvement that you need to do in your home over time really makes a lot of sense.”

We’ve put together a guide to help Texans decide whether to take advantage of federal money to lower their energy bills.

Step one: Assess energy use your home

Experts recommend starting with an assessment of what’s currently in your home and how it’s working. This is known as an “energy audit.” The review might include checking the efficiency rating of your heating and cooling system, figuring out how old your appliances are or testing where air might be leaking. There are several options for this:

Hire a professional

An auditor can go through your house using special gadgets to assess its performance, looking for air leakage and whether there’s enough insulation in the walls and attic. These typically cost hundreds of dollars depending on the size of your home and where you live.

To prepare for the inspection, the U.S. Department of Energy recommends gathering copies of past energy bills.

Call your electric utility

Some local utilities do home energy assessments in person or over the phone. They also might recommend professionals for hire.

Do it yourself

The Department of Energy has a guide here for how to assess your home. You can also consider a checklist from the solar consumer website Solar Reviews.

Step two: Consider your options

Get quotes for how much different options would cost. Do you want to do the work all at once or over time? Is your goal to save money, reduce emissions, or both? Some changes you could pursue:

Todd McAlister, executive director of the South Central Partnership for Energy Efficiency as a Resource, said smaller upgrades are still meaningful and good options for Texans who can’t afford to buy big-ticket items such as appliances, electric vehicles and solar panels.

“It’s just very difficult for the average Texan to be able to afford those things,” McAlister said. “But the average Texan can go out and make sure their windows are caulked, and make sure there’s weather stripping around their doors, make sure that there's adequate insulation in their attic … and then you start adding on when you have the funds to be able to move forward.”

Step three: Consider financial incentives to make your choice

Federal and local incentives can help you get money back. Check what options are available using Rewiring America’s calculator. The nonprofit RMI also created the green upgrade calculator that allows users to see the cost-effectiveness and emission reductions expected from making specific changes to their homes or transportation.

For example, the average Texan could save around $1,350 a year on fuel by switching to an EV, according to RMI.

Federal tax incentives

Homeowners can get tax credits for 30% of certain project costs if they meet certain efficiency ratings. ENERGY STAR, which labels energy efficiency for appliances and is backed by the government, has more detail. The Internal Revenue Service also provides more information, as does the DOE. The credits include:

• Up to $1,200 a year for projects including home audits (up to $150), exterior windows (up to $600), exterior doors (up to $500) and insulation
• Up to $2,000 a year to buy a heat pump or heat pump water heater
• Qualified project costs for geothermal heat pumps, rooftop solar panels and batteries
• Up to $7,500 for a new, qualified plug-in electric vehicle, or up to $4,000 for a used, qualified electric vehicle purchased from a dealer, for people who make a certain income

Local incentives

Check with your local utility to see what incentives they offer. This could include covering all or portions of energy audits, weatherization projects or equipment upgrades. Some programs are designed for low-income residents. The Public Utility Commission of Texas provides a map with links to more information.

The Texas Department of Housing and Community Affairs also administers the federally-funded Weatherization Assistance Program to help pay for energy audits and weatherization (such as caulking or adding insulation). More information on how to apply can be found on the Help for Texans website by selecting “weatherization.”

Every two years, the Texas Commission on Environmental Quality offers a maximum of 2,000 grants up to $2,500 each for purchasing or leasing a qualifying electric, hybrid or hydrogen fuel cell vehicle. If state lawmakers don’t eliminate or change the program, the next round of applications is expected to open Sept. 1, 2025.

Future federal rebates

The federal government earmarked $690 million for rebates for Texans to cover costs for home retrofits and appliances. Texas must submit an application by the end of January 2025 before the funding is awarded. The money will go toward two programs:

Home Energy Performance-Based, Whole House Rebate Program (HOMES)

The rebate program “incentivizes whole-home retrofits” and will give higher payments to low- and moderate-income households, according to the State Energy Conservation Office.

Home Electrification and Application Rebate (HEAR)

These rebates will cover certain appliances and will only be available to low- and moderate-income households, according to the State Energy Conservation Office.

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