The green energy movement was boosted following the passage of the Inflation Reduction Act into law, increasing the number of tax credits and rebates that homeowners can claim. This marks the start of a major transition from fossil fuel to clean energy. The IRA has been tagged "the big climate bill," mainly because it's the most expensive climate undertaking in U.S. history. The IRA seeks to solve several issues by making non-fossil fuel options available to more Americans. Climate change is an unpleasant reality that the U.S. government has taken a bold step to fight. The U.S. government hopes the bill's passage will make the country a unique model for green energy.
This bill follows the $700+million investment in the country's electric vehicle space, targeting the availability of more charging stations. Although EVs are incredibly expensive today, building sustainable national charging infrastructure in partnership with some automakers and charging station providers should encourage more Americans to get an EV. The IRA is also designed for a couple more causes. For instance, it was made to increase the number of people that can access healthcare facilities. Additionally, citizens could be billed significantly less for energy consumption.
As part of a strategy to encourage the switch to clean energy, the IRA opens up a vast amount of tax credits that'll reward homeowners for choosing to undertake energy-saving home improvements. According to the Office of Energy Efficiency & Renewable Energy, families that invest in energy efficiency will enable them to cut down on energy consumption, pay lower utility bills and ultimately experience improved health and comfort. By using environmentally conscious technologies like energy-saving electric heat pumps and heat pump water heaters, households can save up to $6,500 in operating costs. Homeowners also stand the chance of saving $650 yearly on utility bills.
New Tax Credits That Homeowners Can Claim
Homeowners with investments in green energy systems like solar water heating, fuel cells, and solar electricity can claim a 30 percent tax credit, as provided by The IRA. The credit may amount to approximately $7,500. This is a good deal when the fee for installing rooftop solar panels is compared to the volatile prices of fossil fuels-based devices. This means that households can save over $9,000 for the duration of the system's usage or almost $400 yearly.
The IRA also introduces immediate rebates for purchasing new, energy-efficient electric equipment. Homeowners can get rebates worth up to $8,000 for installing a heat pump or an air-conditioning system. Households must belong to the low and moderate-income categories to be eligible. Additionally, home energy-efficient furnishing efforts will be rewarded with a rebate worth around $4,000. Again, only families with either low or moderate income qualify. The IRA also offers tax credits for purchases of brand-new energy-saving appliances. One notable thing about this incentive is that buyers can claim the credit immediately after a purchase is confirmed.