The Inflation Reduction Act has brought home upgrades closer within reach, with around $8,000 in incentives easily available — or expected soon in some areas — for Americans to make improvements that benefit their bottom lines.
The process doesn't have to be complicated, either. Here's how you can begin to take advantage of tax credits and incentives in the act to contribute to a healthier and cleaner future.
What is the Inflation Reduction Act?
Often referred to as the IRA, the Inflation Reduction Act is a piece of legislation signed into law in August 2022. The aim is — among other things — to support a transition to cleaner, more energy-efficient technologies.
According to the U.S. Department of Energy, the nearly $400 billion act allocated $8.8 billion for home energy rebates. Some incentives have previously been available.
Many Americans, for example, have been reaping the money-saving benefits of solar panels and electric vehicles thanks to the IRA. However, the DOE expected the home energy rebate part of the initiative to get underway in 2024.
Now, the rebates are available in New York state, and as of July 16, seven other states had their applications approved to begin their programs. The others are in the process of preparing the necessary documents or waiting for the official greenlight.
Why is the IRA important?
Switching to energy-efficient, electric appliances is a proven way to reduce utility bills, help the environment, and create healthier air, and the IRA is making these upgrades more accessible.
As the U.S. Energy Information Administration has noted, most power in the United States still comes from expensive and polluting dirty fuels like oil and gas. When burned, these fuels release pollution linked to health concerns like asthma.
The gases generated by dirty energy also trap heat in our atmosphere. Our reliance on dirty fuels has overwhelmingly driven the rise of global temperatures, making extreme weather events more frequent and dangerous, impacting access to and the cost of food, and contributing to the spread of disease.
However, when consumers upgrade to more efficient products, the power plants don't have to work as hard because your home needs less juice, meaning your bills may be lower. In turn, the operation of the plants generates less pollution.
Modernizing your home can even contribute to healthier indoor air. For example, gas-powered stoves pump toxic fumes right into your home, but an induction cooktop eliminates that issue — and is easier to clean to boot.
How do I find which incentives are available?
The nonprofit Rewiring America simplifies the process of discovering which incentives will work for you, whether you're a homeowner or a renter. Its free tools also allow its users to filter for household size, income, and tax filing status, among other things.
Once the savings calculator works its magic, users can see how much they are projected to save and receive details on recommended contractors and how to proceed.
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