So, you’ve taken the first step and signed up for community solar. Since then, maybe you’ve been keeping tabs on our grazing sheep and pasture pigs while you wrack your brain searching for the next step to take on your decarbonization journey. Don’t worry, we have you covered, or rather, the Inflation Reduction Act does.
In August 2022, the Inflation Reduction Act (IRA) was signed into law. This historic legislation came with the largest climate investment in history, boasting $270 billion in tax incentives, supporting the United States’ goal of cutting greenhouse gas emissions by 40% by 2030. These tax incentives are available to you when you make certain energy-efficient changes in your home or purchase an electric vehicle. We’re going to break down some of the Inflation Reduction Act’s tax credits and their eligibility requirements, to help you take advantage of additional savings while supporting a cleaner future for all.
Let’s start with home improvement projects—whether you’re looking to install solar panels on your roof, or want to weatherize your home before winter, the Inflation Reduction Act has rebates to offer to make these upgrades more affordable for you.
Qualifying energy efficiency upgrades to the home may now be eligible for a 30% tax credit. These upgrades include the installation of heat pumps or biomass stoves as well as weatherization upgrades such as insulation and new exterior windows and doors.
Tackling the upfront costs of rooftop solar panels, this 30% tax credit applies to the cost of acquiring and installing new residential renewable energy products at home such as rooftop solar panels. This makes residential solar installation more accessible and affordable.
Designed specifically for low-to-moderate-income households, this rebate covers between 50% and 100% of eligible electric efficiency upgrades, such as electric appliances and heat pumps, depending on household income.
The HOMES rebate is offered to households that have reduced their energy use through energy efficiency upgrades in the home. With this rebate, you can reduce your energy usage, saving you money, while also saving on the cost of making these energy efficiency upgrades.
The Inflation Reduction Act’s incentives don’t stop at home improvements. In the United States alone, sales of electric vehicles have increased significantly from .6 million in 2016 to 1.6 million in 2023. The Inflation Reduction Act’s incentives for electric vehicles are likely to spur this growth even more, so if you’re looking to make the switch, there’s no better time than now.
Electric vehicles have a smaller carbon footprint than traditional cars and can simultaneously save drivers a significant amount on fuel costs. Now, with the Inflation Reduction Act’s incentive for EVs, you can take advantage of this credit when purchasing a qualifying electric vehicle and realize even greater cost savings.
Individuals who purchase a used electric vehicle through a licensed dealer may be eligible for this tax credit. The cost of the qualifying electric vehicle must not exceed $25,000. This credit further reduces the investment needed to purchase an electric vehicle.
The Inflation Reduction Act has been unfaltering in its efforts to support a cleaner United States economy by incentivizing clean energy options, but legislation is just the start. It is up to individuals and businesses to take advantage of the incentives and to transition their homes, vehicles, and lifestyles.
Signing up for community solar was a great first step. We encourage you to take advantage of everything the Inflation Reduction Act has to offer you and consider additional ways to reduce your carbon footprint and realize savings while doing so.