7 Ways the IRA Can Save You Money & Reduce Your Carbon Footprint

Climate change is a pressing issue that affects us all, but the Inflation Reduction Act (IRA) of 2022 offers hope for a cleaner and more sustainable future. This initiative aims to reduce greenhouse gas emissions, create millions of clean energy jobs, and lower energy bills for working families. So how can you contribute to this effort and benefit from it at the same time? The answer is through clean energy.

The IRA is designed to cut greenhouse gas emissions by 40% below 2005 levels by 2030, and it does so by creating Clean Energy Tax Credits for electricity, vehicles, new technology, and manufacturing. This will lead to the creation of new jobs and annual savings of up to $1,800 on energy bills for households. Additionally, the IRA includes Clean Energy Investments that promote cleaner manufacturing approaches, green technologies, and the improvement of transportation and shipping ports.

Reducing methane pollution is another key aspect of the IRA, as methane is a potent greenhouse gas that contributes to climate change. By reducing methane emissions, we can help mitigate the effects of climate change and improve public health, especially in areas that have been most harmed by past energy practices.

WHAT YOU CAN DO TO HELP

1. In the insulation.   Adding insulation is a tried-and-true way to prevent wasted energy and save money. With the passage of the IRA, some households are now eligible for a rebate of up to $1,600 just for improving their home’s insulation and sealing energy leaks — and that’s on top of the savings better insulation will yield on monthly utility bills. (The rebate for households with moderate incomes covers 50% of these costs). 

2. In the house.   The new law offers rebates to help defray upfront costs, prioritizing families with low and average incomes. For example, consumers who invest in an energy-efficient heat pump water heater will be eligible for a rebate of up to $1,750 and an upgraded breaker box may be eligible for a $4,000 rebate.
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3. In the laundry room.   Heat-pump clothes dryers, which are popular in Europe, but rarely used in the U.S., are an energy-efficient alternative to traditional dryers. Instead of releasing warm, humid air outside, a heat pump dryer sends moist air through an evaporator and then recirculates the dry hot air. The process takes a bit longer but only uses about ½ the electricity. The new law encourages consumers to switch to an electric heat pump dryer with a rebate up to $840. 

4. In the kitchen.    A Stanford University study recently found that gas stoves leak methane, a potent greenhouse gas, even when they aren’t being used. The researchers estimated that stoves across the U.S. emit as much climate pollution as about 500,000 gas-powered cars. The IRA provides for a rebate of up to $840 for an electric stove, cooktop, range or oven to make the purchase more affordable. 

5. At the AC unit.   What if there were a more efficient way to keep your home comfortable? Consider a heat pump. It can both heat and cool your home and uses less energy overall. Households can qualify for a tax credit of up to $2,000 for the purchase of an electric heat pump. And for households with low incomes, the new law provides a rebate of up to $8,000 on installation. (For the tax credit program, the incentives apply to equipment installed on January 1, 2023, or later.) MORE ABOUT QUALIFYING

6. In the garage.   The IRA rewards EV buyers with a tax credit of up to $4,000 for the purchase of a used EV and up to $7,500 for a new car. In 2024, the credit will be issued through dealerships at the time of sale. EVs also require less maintenance and cost less to drive, so are money-savers. Note that not all EVs will be eligible, so it's important to check the criteria before making a purchase.

7. On the roof.   There has never been a better time to add solar panels to your home. The Residential Clean Energy Credit included in the new law provides a tax credit of up to 30% to households that invest in clean energy such as solar, and it’s retroactive to the beginning of 2022. Considering that the average cost of installing a residential rooftop solar-powered system is about $19,000 — that’s $5,700 in savings. Beyond that, the average solar-powered home saves about $300 every year on electricity. 

When it comes to combating climate change, it's vital to remember that every person can make a difference. While homeowners have greater control over their living space's sustainability, renters can still take action to reduce their carbon footprint. For example, installing solar panels or upgrading appliances may not be possible if they don't own the property. Even buying an EV may be a challenge if there's nowhere to charge it. However, renters can still act by encouraging their landlords to invest in green upgrades, or by looking for eco-friendly features when searching for their next rental.

In fact, these types of decisions are often referred to as "kitchen table" decisions – choices that families make while discussing them at home. Considering the environmental impact of these decisions is crucial, and can lead to positive changes in the long run.

The Inflation Reduction Act offers hope for a cleaner and more sustainable future. To further this cause, we can all take individual action to reduce our carbon footprint and advocate for policies that prioritize climate justice. It's crucial that we take a thoughtful approach to the decisions we make about our homes and lifestyles. By working towards a more sustainable and equitable future, we can create a world where everyone can flourish. Let's take action now to build a better tomorrow for ourselves and for future generations.