This past August, the Inflation Reduction Act was passed into U.S. law. The IRA includes $370 billion in funding for boosting clean energy and is the most impactful piece of climate legislation ever passed in U.S. history. While the document covers various topics regarding healthcare and corporate taxes, the renewable energy initiatives are marking a significant push toward clean energy and a greener planet. Following the passing of this legislation, we will take a deep dive into the new initiatives and incentives that will notably impact the solar and renewable energy industry.
Renewable Energy Initiatives in the Inflation Reduction Act
From tax credits to increased energy savings, here are the significant benefits of the IRA.
Investment Tax Credit
Ever wanted to switch to solar power for a more energy-efficient home? Well, now you can - with an added incentive. Homeown
ers that install solar panels on their roofs will receive a 30% tax credit, which will end up saving $9,000 over the life of the panel system. This initiative will apply to residential and commercial projects installed since the beginning of this year and will last until 2032. Previously, energy storage projects weren’t eligible for tax credits unless they were directly related to solar power installations. The IRA eliminates this, allowing energy storage installs to receive the same 30% tax credit even for stand-alone locations.
Tax Credits for Electric Vehicles (EVs)
If you want to reduce your carbon footprint on the road, the new law includes incentives for switching from a gas guzzler to an electric vehicle. Starting in 2023, those who purchase qualifying electric cars will be awarded a tax credit of up to $7,500 for new EVs and $4,000 for used EVs, which can help save your family $950 per year. The following year - 2024 - the credit will be issued through car dealerships during the purchasing process. Some EV models have already been selling for $30,000 or less, however, this initiative will allow EVs to be even more affordable since many American households spend hundreds on gasoline each month, especially this summer when gas prices were at their peak.
Tax Rebates for Energy-Efficient Home Appliances
It’s getting easier and cheaper to create a greener home. With the new legislation, those wanting to upgrade their home’s infrastructure will receive direct consumer rebates to buy heat pumps and other energy-efficient appliances, such as ranges, cooktops, and wall ovens. For example, if you acquire a new electric cooking appliance, you could receive a rebate of up to $840. Are you looking to convert your propane appliance to electric? There’s an additional $500 rebate to help cover that cost. The IRA has allotted $4.5 billion in funding for this initiative, and each state will decide how to utilize the funds. It’s important to note that funds will be prioritized for low and middle-income households.
Reducing Carbon Emissions
Reducing harmful pollution is a key component of the law, as the legislation aims to lower greenhouse gas emissions by 40% below 2005 levels by 2030. According to an Energy Innovation report, for every ton of emissions increase generated by IRA oil and gas provisions, at least 24 tons of emissions are avoided by the other solutions. Additionally, the law outlines a push toward reducing particle pollution from fossil fuel energy sources, aiming to prevent 3,900 premature deaths and up to 100,000 asthma attacks annually by 2030.
Jobs & GDP
In addition to reducing emissions and granting tax credits, the IRA marks a considerable boost to improve the economy. It is estimated that about 1.5 million new jobs will be created by 2030 from the push toward clean energy. This legislation is also poised to increase GDP by 0.84% by 2030.
Boosting Clean Energy for a Better Future
Adopting practices that will lead the U.S. to a future powered by renewable energy will be prosperous for the nation and the environment. AccuSolar is at the forefront of this transition towards boosting clean energy initiatives by providing an opportunity for businesses to leverage floating solar platforms that will enhance energy efficiency. Contact us today to learn more about how installing floating solar will benefit your company while creating a better planet.