The Inflation Reduction Act, which is expected to be signed by President Joe Biden on Tuesday, will offer several financial incentives for people to change their way of living to be more energy-efficient.
These provisions aim to make rooftop solar panels, electric vehicles, and energy-efficient appliances more affordable for homeowners through tax breaks and rebates offered for people purchasing these appliances. Consumers who qualify for these incentives can receive up to $10,000 or more in tax breaks and rebates, according to CNBC.
“The legislation itself is clearly a win for the climate in terms of the emissions it would drive, and is structured in a way that it ends up being a win for consumers, as well,” said Kevin Rennert from Resources for the Future, a nonprofit group focused on environmental and energy research.
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For anyone seeking to purchase an electric vehicle, either new or used, buying one before 2032 would give people a tax credit worth several thousand: $7,500 for a new car or $4,000 for a used one. Some exemptions include if one’s vehicle is worth over $80,000 or if a person makes over $150,000 a year.
For people looking to install solar panels or other forms of renewable energy at their homes, another tax credit will be available to them called the “residential clean energy credit.” Any homeowners who purchase a form of renewable energy for house installation will qualify for a 30% tax credit from whatever costs are brought on through their purchases from 2022-2032. This tax credit would gradually decrease to 26% in 2033 and then 22% in 2034.
Individuals who purchase renewable energy installations for their homes could get a 26% break in 2022 and a 22% break in 2023 before it is scheduled to end.
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In addition, people who purchase certain electric appliances, such as a heat pump water heater or electric stove, can be eligible for the “high-efficiency electric home rebate program.” Anyone who buys electric appliances under this program will receive rebate money in return, getting up to $14,000 for their purchases.
