Here’s What the Inflation Reduction Act Can Do for You
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Illustration: Delphine Lee
One person alone can’t solve the climate crisis, but the Inflation Reduction Act is full of incentives for individuals to collectively invest in a healthier future–and save money while doing it. There are ways to take advantage of provisions in the landmark legislation today, with more opportunities available next year and beyond.
Benefit: At $67,000, the average price of a new electric vehicle (EV) is about one-third more than a conventional car. Federal tax breaks, worth up to $7,500 for new EVs and $4,000 for used ones, will help close the gap, though manufacturing requirements and income caps may initially limit some consumers’ savings. Reap the Rewards: Consumers who buy EVs in 2022 or 2023 will see a dollar-for-dollar reduction on their federal tax bill. Those willing to wait until 2024 can transfer their credit to dealers and get the full discount at the point of sale.
Benefit: A bevy of rebates, taken directly off the bill from the manufacturer or contractor, and federal tax credits are available. Put in solar panels or energy-efficient windows, for example, and claim a 30 percent tax break. And low-income families are eligible to have electrification projects covered completely.Reap the Rewards: Projects completed before 2032 qualify for the rebates. More info about how to claim rebates is expected in 2023; for those looking to get a jump start on choosing their upgrades, check out the savings calculator at rewiringamerica.org.
Benefit: Tenants could save $220 on average on their energy bills each year thanks to the IRA’s investment in renewables. The package also includes nearly $1 billion for affordable housing owners who improve energy efficiency, indoor air quality, and more. Billions of additional dollars are available to local and state governments to create sustainable public transportation, implement green building codes, and advance an array of other upgrades. Reap the Rewards: Encourage your landlord to make energy-efficient improvements and tell your elected officials to make the most of IRA funds in your community.
This piece originally ran in the Winter 2022 issue. To receive our print magazine, become a member by making a donation today.