The Inflation Reduction Law Is Already Having An Impact
President Biden signed the Inflation Reduction Act into law just weeks ago, but there’s already plenty to celebrate. The legislation is delivering tax credits to consumers and turbocharging private sector investments in clean energy manufacturing and renewable projects nationwide.
Consumers can already take advantage of tax credits under the Inflation Reduction Act.
Homeowners undergoing clean energy installations are taking advantage of the law’s residential clean energy credits, which are retroactive to the start of 2022. This means existing projects both completed this year and under construction qualify for a 30% tax credit to help homeowners offset the cost of installing solar panels and any other renewable energy equipment. It’s not just those installing renewable equipment that are benefitting from the law, but homeowners with energy efficiency installations in the works that will be completed after January 2023 are also eligible for tax credits. The law provides rebates of up to $1,200 to help offset the cost of energy efficient features including insulation, external doors and windows. Homeowners looking to save even more on their energy bills can by installing heat pumps, heat pump water heaters and biomass stoves and boilers which are eligible for a $2,000 tax credit.
The Inflation Reduction Act is turbocharging investments in clean energy projects.
From EV batteries to solar panels, private companies have already attributed their new investments in America’s clean energy industry to the law’s passage. As the New York Times reports, in the weeks since President Biden signed the bill into law, “corporations have announced a series of big-ticket projects to produce the kind of technology the legislation aims to promote.” Toyota and Panasonic Holdings, Tesla’s battery supplier, will build new manufacturing facilities for electric vehicle batteries in North Carolina and Oklahoma, respectively. Honda recently announced a joint venture with LG Energy Solutions to build a $4.4 billion battery factory. Solar manufacturer First Solar plans to invest $1 billion for a new factory in the Southeast and spend $185 million in their existing Ohio factory, which will expand the company’s solar production capacity to 10 gigawatts in the next three years. Companies also announced plans to increase production of key inputs for clean energy projects, such as silicon wafers and processed lithium, in the US. These are just the beginning of a period of massive clean energy investment.