Climate IRAs benefit you and the planet

“Think of an IRA as a free electric bank account with your name on it…” Go Electric Now’s guide to deinflation

Have you ever wanted to put solar panels on your roof or drive an electric car, but couldn’t afford it? Do you want to insulate your home to keep it warmer in the winter and cooler in the summer, but find it too expensive?

Well now, the people-friendly/climate-friendly fiscal stimulus built into the new Inflation Reduction Act, or IRA, signed into law by President Biden last August, can provide the money to help you achieve your personal environmental goals as a citizen.

If that sounds like a sales pitch, it is, because the more you learn about an IRA, the more you’ll be sold on its benefits to people—homeowners, renters, and workers—and to the planet. The provisions of the law could put the United States on a path toward a near-zero-emissions energy system, to be achieved within two or three decades.

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With America being the world’s largest per capita emitter of greenhouse gases, and the second largest emitter overall, there will be a ripple effect from our progress. Since we will mostly electrify our biggest emitters—the transportation and housing sectors—our fossil fuel consumption will drop dramatically. This will likely drive up fossil fuel prices around the world, making alternative energy production – for which we can save a lot of technology – more attractive to poor countries.

Meanwhile, the European Union is on its way to reducing emissions. As I noted in my last column, the International Energy Agency, which tracks energy financing and investment, noted in its 2022 annual report that “renewable energy is charging as countries seek to boost energy security (in the aftermath of the Russian invasion of Ukraine).”

By 2022-2027, the report continues, “global PV capacity (alone) is set to (outstrip coal and) become the world’s largest power capacity.”

How can an IRA help you save the planet? Benefits to property owners are of two primary types, direct and upfront deductions for building energy upgrades, and tax deductions for installing new alternative energy equipment. All incentives are great.

For example, you can get up to $4,000 in advance for upgrading your electrical panel to a new “smart” panel. Getting rid of the furnace and installing a heat pump can earn you $8,000, and upgrading windows and insulation can earn you $1,600.

These improvements will lower your annual energy bills while reducing the demand for electricity, most of which is still generated from fossil fuels. (The IRA also provides incentives for energy companies to upgrade, but these will be discussed in a different column.)

Tax credits covering 30% of the cost of a rooftop solar installation are now available. A $7,500 credit will be available for each new electric vehicle ($4,000 for a used model) this year, as will many other discounts and IRA credits. In addition, direct deductions can be combined with tax credits in many cases.

To learn more, go to Rewiringamerica.org/app/ira-calculator. For a more in-depth overview of the IRA, with clear basic explanations of each technology that drives it and detailed, illustrated case studies of how it works for people with diverse incomes and housing conditions, see Rewiring America: Go Electric Digital Guide, follow the links and download the PDF.

Finally, to get a broad view of the IRA’s many facets outside of home energy upgrades, such as its investments in Indigenous communities and schools, simply Google “Home – Rewiring America.”

IRAs and similar renewable energy investments around the world could put us on a course to keep planet warming below the critical 1.5°C threshold, a goal that seemed increasingly out of reach just a year ago. Suddenly, the future is looking much brighter in our eco-home.

Philip S. Wiens is an environmental researcher and writer. Read more articles from his series Your ecological home on his website at firebirdjournal.com.

So the EPA could simply ask the coal-fired plants to clean up their act and, unable to offer them positive alternatives, let them figure out how to do it — forcing a much more expensive transition in the long run. Preventing that would require a much deeper foray into the legal quagmire to adjudicate Congress’ regulatory intentions than the Court would have had to wade through in the first place.

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