Tax credits for residential solar and battery storage systems are included in the inflation reduction act
Craig Ruttle/APIt would be cheaper for Americans to curb their climate-warming emissions if there was money in the inflation reduction act.
Most of the bill's climate benefits would come from incentivizing major shifts, but individual choices can add up.
The bill would pay consumers to make green choices if it passes the House of Representatives.
A tax credit for energy efficiency improvements is the first home benefit for Americans.
The inflation reduction act calls for reviving a credit that expired last year and extending it for a decade. Homeowners who front the cost of energy efficiency improvements, from new doors and windows to more efficient appliances, would be able to claim up to $1,200 a year at tax time.
The bill set aside more than $8 billion for two rebate programs for lower and middle income households. One way to cut down on energy wasted at home would be to replace old appliances with new energy efficient ones. States need to apply for the money and set up systems to implement the rebtes in order to get it.
The bill will allow for the rebates to take effect at the point of sale once that happens.
The director of Policy Partnerships and Equitable Electrification at Rewiring America says that the rebates mean a discount. Buyers with less than 80% of the area median income can get the most money, while those with more than 150% of the area median income can get less.
The rebates are listed.
ACEEE says that heat pumps are cheaper to run in most of the US. As more wind and solar power are added to the grid, electric appliances can be powered by renewable energy. It's a cleaner, better approach to home energy.
The Act would create a second program, which would pay between $2,000 and $8,000 for households to upgrade their energy efficiency.
Existing tax credits for residential solar and home energy storage systems would be expanded under the Act.
When everyone is running their air conditioners during a heat wave, these measures would reduce the building's draw on the electric grid.
The president of the Solar Energy Industry Association says that it strengthens the grid for everyone.
The homeowners could get up to 30% of the cost of home solar back at tax time, retroactive to the beginning of 2022. Storage would have the same incentive.
The electric vehicle tax credits are a mixed bag according to experts.
According to John Helveston, an assistant professor at George Washington University, some measures would make it easier for people to buy an EV. When claiming the credit for a new EV, eligible buyers can't make more than $300,000 a year on a tax return, and the money can't be applied to a car that sells for more than $55,000, or a truck/SUV/van priced higher than $80,000.
It's steering everything to make it more affordable for the mass market to own an EV. The direction we need to be going is that.
The credits can be transferred to car dealers at the time of sale.
Half of the tax credit is tied to increasing requirements that critical minerals used to make EV batteries come from North America or the U.S.
John Bozzella, president and CEO of the Alliance for automotive innovation, said in a statement that they can't meet the demand for critical minerals and batteries on their own.
The group estimated that the language in the bill would exclude many models from being eligible, and that none of them would be eligible for the full $7,500.
According to Helveston, the other half of the tax credit should be accessible for some vehicles.
He says it isn't all or nothing.
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