On August 16, 2022, President Joe Biden signed the Inflation Reduction Act (IRA) into law. Over the next 10 years, the IRA will provide $391 billion in climate and clean energy funding.
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Some of the most exciting parts of the IRA for speeding the transition from fossil fuels to clean energy are:
- Tax credits for renewable energy, batteries and new or used electric vehicles.
- Bonus credits for commercial solar installations in low-income communities or those historically reliant on fossil fuels.
- “Direct pay” credits so tax-exempt entities can finally benefit from clean energy tax credits.
- Tax deductions and rebates on home weatherization and electrification (heat pumps, electric stoves, etc.); up to 100% rebates for low-income households.
- Grants and loans to states, municipalities and Tribal governments to fund greenhouse gas reduction projects, especially in low-income areas.
- Grants and rebates up to 100% for heavy-duty EVs like school buses.
- Block grants for community-led projects to reduce emissions, reduce pollution-related health risks, improve resilience and increase participation of disadvantaged communities in policymaking.
- Programs to support clean energy manufacturing.
Tax credits on solar are available immediately! (If you installed solar this year and expected a 26% tax credit, you will now be eligible for 30%.)
Other tax credits will be available starting in the 2023 tax year. Grants and rebates will roll out as the government finalizes implementation details. Some funds will be funneled through state agencies, and those processes also have yet to be finalized.
You should consult your tax professional to confirm the details of any of these programs. But if you’re thinking of going solar, adding a battery, buying an EV, switching from gas to electric appliances, or lobbying your municipal government to start acting on climate, now’s the time!
More questions? Email firstname.lastname@example.org.