June 12, 2025

Tax Incentives for Georgia Insulation Upgrades

Did you know 9 out of 10 homes located in the United States don’t have enough insulation? That means most of us are living in homes that are drafty, uncomfortable, and wasting energy. The good news? Thanks to federal and state tax incentives and rebate programs, it’s now easier and more affordable than ever for Georgia homeowners to make energy-efficient upgrades.

Federal Tax Credits for Home Insulation Upgrades

Under the Energy Efficient Home Improvement Credit, homeowners receive a federal tax credit of 30% for the costs of insulating and air sealing products used for energy upgrades to their home. You can claim a maximum credit of $1,200 yearly for insulation and air sealing improvements, which is a big upgrade from the old lifetime cap of $500.

This credit applies to a wide range of qualifying insulation products including batt and blown-in insulation, rigid board insulation, and spray foam insulation. Many air sealing products also qualify including weather stripping, can foam, caulk, and house wrap. You can also claim up to a $150 credit if you get a professional home energy audit.

These credits are only available for your primary residence- rentals and new construction do not qualify. Remember that labor costs don’t count towards the credit, only the materials. Your upgrades must meet the state of Georgia’s most recently approved qualified energy efficiency standards set by the International Energy Conservation Code (IECC). And don’t forget to save your Manufacturer's Certification Statements as documentation for air sealing products.

To claim these credits, file IRS Form 5695 (Residential Energy Credits) with your annual tax return. While this federal tax credit won’t give you a refund if you don’t owe taxes, it can lower what you owe to zero.

Georgia-Specific Incentives for Insulation Upgrades

The state of Georgia offers homeowners up to $16,000 in home energy rebates through two home energy improvement programs. Here are some specifics about the two rebate programs:

Direct Insulation Rebates

Home Efficiency Rebates (HER)

HER offers performance-based rebates for comprehensive retrofits. Depending on your income and how much energy you save, the following applies:

20% energy reduction- up to $2,000 back (moderate income) or $10,000 (income-qualified).
35% energy reduction- up to $4,000 back (moderate income) or $16,000 (lower income).
Also covers 50% of project costs for most homeowners, and up to 80-100% for lower income households.
Requires the completion of a home energy assessment.

Home Electrification and Appliance Rebates (HEAR)

HEAR offers low- and moderate-income households up to $1,600 in rebates for insulation, air sealing, and ventilation upgrades. HEAR also covers items like heat pump water heaters and appliances as part of larger efficiency projects. Rebates can reduce out-of-pocket expenses at the time of installation.

Rebates are tied to a homeowner’s Area Median Income (AMI) so:

Below 80% AMI- receive a rebate up to 100% of the total project cost.
At or above 80% to 150% AMI- receive a rebate up to 50% of the total project cost.

You ‘ll need to work with a certified contractor for each program and these rebates can be combined with federal tax credits too. Simply subtract your rebate amount from your costs before calculating your 30% federal credit.

Utility Company Rebates

If you are a Georgia Power customer, you can get up to a $250 rebate for attic insulation upgrades through Georgia Power’s Home Energy Improvement Program (HEIP). There are also other rebates available for duct sealing, smart thermostats, and other efficiency measures. Local electric membership co-ops and municipal utilities may also offer additional energy savings and incentives. You can combine these utility rebates with state and federal offers for maximum savings.

How to Claim Your Savings- A Recap

Federal Tax Credit Process

Claim the credit on your annual tax return using File IRS Form 5695.
Save your receipts and manufacturer certifications.
Credit only applies to your primary residence, not rental properties.
You can turn to a tax professional for help with filing.

Georgia State Rebate Process

Work with state approved contractors who will handle most of the application paperwork.
Performance-based rebates require energy assessments before and after work.
Income documentation may be required.
Rebates are issued as checks, electronic funds, or point-of-sale discounts.

Utility Rebates

Submit a rebate form with your contractor’s invoice, usually within 6 months of installation.
Rebates are usually issued as a check or bill credit after a few weeks.

Remember you can stack incentives together for maximum savings. Your federal credit applies to the net cost after any other rebates are subtracted. For example, if you spend $5,000 on a project and get a $250 HEIP rebate, your 30% federal tax credit applies to your $4,750 balance for a credit of $1,425.

Why Upgrading Insulation is a Smart Investment

Financial Benefits

Insulation and air sealing upgrades can cut your energy bills by up to 15% and usually pay for themselves in a few years.

Comfort and Health Improvements

You’ll enjoy better comfort, fewer drafts, and less stress on your HVAC system. Proper insulation and air sealing also help prevent condensation, moisture buildup, mold, and structural issues. As well as protect pipes from freezing in insulated crawl spaces and attics.

Environmental Impact

You’ll be helping the environment by using less energy which reduces carbon emissions. You’ll also help the local power grid by reducing peak heating and cooling demand.

Home Value Benefits

Energy efficiency improvements increase your home’s resale value by making your home more attractive to buyers interested in lower operating costs and green features.

Now is the Best Time to Boost Your Home’s Energy Efficiency

With generous tax incentives and rebates on qualifying energy upgrades, this is the best time to invest in a more energy-efficient Georgia home. Combining incentives and energy upgrades creates a rare win-win scenario for you and other homeowners. You get paid back for creating a more comfortable home, lowering your energy costs, and leaving a smaller environmental impact. Take advantage of these programs soon, because they are time-limited and won’t last forever. At Woodman Insulation, our expert crew of insulation installers is here to guarantee your home upgrades meet all required standards. We’ll help you navigate every step of the available programs you may qualify for to ensure you receive the maximum rebate or tax credit for your project. Contact us today to get started on upgrading your Atlanta area home.