The Inflation Reduction Act (IRA) is passed! What does it mean?
What savings can you expect from this legislation?
On Tuesday, President Biden passed the Inflation Reduction Act, the biggest climate legislation in US history. With $369 billion allocated to tackle climate, we could see a 40% emissions reduction, putting us on a path to a more sustainable future.
What does the Inflation Reduction Act mean for you?
Families can take advantage of the following benefits, according to the White House briefing:
- 30% tax credit for installing residential solar panels, which could add up to $9000 over the life of the system or $300 per year.
- Up to $7500 for purchasing a new electric vehicle, saving approximately $950 per year.
- Up to $14,000 for direct consumer rebates for families in home energy efficiency upgrades, including up to $8000 for a heat pump.
- An estimated $500 of energy savings per year for every family
The IRA aims to increase clean energy, including 950 million solar panels, 120K wind turbines, and 2300 grid-scale battery plants; all while increasing job opportunities. Additionally, it protects nearly 2 million acres of national forests.
Pennsylvania can expect an estimated $270 million of investment in clean power generation between now and 2030, bringing jobs across solar, wind storage, and other clean energy industries. Additionally, local and state governments can adopt the latest energy code, saving a new PA homeowner 13.5% on their annual utility bill (or $341).
It may be too soon to say exactly how these dollars will flow into Philadelphia, but there are indicators that homeowners will benefit.
When homeowners switch to climate-friendly homes powered by renewable sources and efficiency measures, it can reduce carbon emissions by up to 24%. In Pennsylvania, that means approximately a $787 reduction in utility costs for a single-family home per year, according to Climate Central.
There’s a lot to celebrate in this bill, but there are also a few not-as-climate-friendly compromises. To secure Senator Joe Manchin and Krysten Sinema’s votes, there’s provisions that include oil and gas development in the Gulf of Mexico and Alaska’s Cook Inlet, as well as the controversial carbon capture and storage.
Political experts consider these provisions necessary to pass the legislation and show that it’s a sign that a larger democratic majority needs to be in the Senate for more significant climate action.