Saving Money on Electrification with the Inflation Reduction Act

02/13/23

Burning fossil fuels such as coal, oil, and natural gas release greenhouse gases (GHG) into the atmosphere, leading to a rapidly changing climate. Reducing GHG emissions is important in slowing climate change and minimizing the impacts that communities may face now and into the future. The County reduces GHG emissions through the Climate Action Plan (CAP), which contains a series of measures that will reduce GHGs over the next 30 years.

One opportunity to help slow climate change is electrification, which looks to replace technologies that run on fossil fuels with those that are more efficient and run on electricity. In the future, the electricity grid will be increasingly supplied by renewable sources, including solar photovoltaics, wind, and hydropower. The public have an opportunity to save money on electrification in their homes with the Inflation Reduction Act. 

Infographic of house with eligible clean energy equipment

Signed into law by President Biden in August 2022, the Inflation Reduction Act (IRA) addresses the climate crisis by reducing pollution, advancing environmental justice, and cutting energy costs. The IRA is the largest investment in clean energy in U.S. history and offers benefits such as discounts, tax credits, grants, and low-cost financing options to individuals, businesses, organizations, and local and state governments.

Benefits for individuals consists of rebates and tax credits for electrifying technology in their homes. Tax credits include improving home energy efficiency with electrification upgrades, installing rooftop solar, and the purchase of a used or new electric vehicle.

For help understanding the tax credits and what type of clean energy equipment is eligible, the U.S. Department of Energy has provided a consumer guide. The Home Energy Rebate Program will provide households with rebates to reduce the upfront purchase costs of appliances including, but not limited to, heat pumps and stoves. The rebates are still under development and are expected to be made available early 2023. Visit the White House’s Clean Energy For All website for an interactive infographic that provides additional information on the benefits available with the IRA.

Quick facts on available IRA benefits

  • A tax credit to cover 30% of the costs of installing rooftop solar
  • A tax credit for to cover up to 30% of the costs for certain energy efficiency improvements (windows, doors, electric heat pump, etc.)
  • Rebates for low and moderate-income households at the point-of-sale for electrical upgrades
    • For those who don’t qualify, the tax credit for electrification is the next best option
  • A tax credit of up to $7,500 for the purchase of a new electric vehicle

If you’re looking for more information, here are some additional resources that can help you understand the IRA tax credits and savings that may be available to you: