The White House has reported 3.4 million families saved $8.4 billion in tax credits on home energy projects since the Inflation Reduction Act passed two years ago under the Biden-Harris administration, and with new leadership coming in, you may want to act now to get in on some of those benefits for your home.
The scoop
In 2022, Congress passed the Inflation Reduction Act (IRA), which offers rebates and tax incentives for home upgrades that save you money and are environmentally friendly too. You can earn up to $14,000 from installing things like solar panels, induction stove tops, and other electric appliances in your home, as well as renovations like weatherization.
Understanding your options can be a little tricky, but there are programs like Rewiring America, an electrification nonprofit, which offers a free online savings calculator to help you figure out what upgrades make the most sense for your home and identify which rebates and tax credits apply.
There are other programs available too, like Arcadia, which focuses on solar energy, and WattBuy, which also offers personalized electrification plans, to help you find the best way to upgrade your home, save money, and help the climate while you do so.
If you are interested in taking advantage of these incentives, the time to act may be now. President-elect Donald Trump said he intends to gut the IRA in September: "We will rescind all unspent funds under the misnamed Inflation Reduction Act." However, any changes to the IRA would require an act of Congress.
How it's working
Electrifying your home has proven to be an amazing money saver, even considering some of the upfront costs, many of which are offset by the IRA benefits. For example, induction cooktops run at 85% efficiency, versus 32% for traditional gas stoves, which rely on dirty energy for fuel but also release harmful pollutants like methane into your home. Those can lead to long-term health problems, like asthma, not to mention contributing to the larger greenhouse gas problem.
Forbes also reports that homeowners can save $1,600 per year on average after they install solar panels, adding up to $25,500 to $33,000 over the typical 25- to 30-year lifetime of the solar panel.
Weatherizing your home by adding improved air sealing and insulation can also save 15% on heating and cooling costs, reducing the need to use dirty energy and reduce your environmental impact.
What people are saying
Pedro Pizarro, the head of Edison International, parent company to SoCal Edison, told Reuters in November that his company is very much on board with the incentives offered by the IRA.
🗣️ Do you think the federal government should give us tax breaks to improve our homes?
🔘 Definitely 💯
🔘 Only for certain upgrades 🏡
🔘 Let each state decide instead 🇺🇸
🔘 No way 🙅
🗳️ Click your choice to see results and speak your mind
"One of our big priorities as an industry is going to be to articulate the benefits of the IRA," Pizarro told the outlet at the COP29 climate summit in Azerbaijan. "Most of those (IRA) benefits don't actually accrue to our shareholders. They go straight to our bills and down to our customers."
On top of the savings offered by the IRA, the green energy upgrades have created thousands of jobs. The White House reported that 330,000 jobs have been created since the IRA's passage, and companies have announced $265 billion in investments in clean energy across almost every state in the U.S.
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