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Inflation Reduction Act

What is it & what does it mean?

The newly passed legislation makes a momentous down payment on deficit reduction to fight inflation. It will also decrease consumer energy costs, increase American energy security, and reduce carbon emissions by roughly 40 percent by 2030. With President Joe Biden signing the Inflation Reduction Act into law, this is the largest investment in clean energy and climate change solutions in US history (369 billion dollars to be exact)! 

 

Now, what does this mean for the average American? A whole lot! Peruse highlights you need to know in regard to climate change and clean energy that are covered in the bill. Explore the documents below to uncover the new incentives to take advantage of!

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Overview:

  • Lowers consumer energy costs:

    • energy bills: cuts energy bills by $500 to $1,000 per year

  • Creates manufacturing jobs: more than a $60 billion investment will create millions of new domestic clean manufacturing jobs

  • Invests in disadvantaged communities: cleaning up pollution and taking steps to reduce environmental injustice with $60 billion for environmental justice

  • Protects families and small businesses making $400,000 or less

SUN's Inflation Reduction Act August 2022 Webinar

Credit: GreenBiz  Rewiring America Video

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Some noteworthy provisions of the IRA:

 

  • Rebates for households (single and multi-family residential):

    • Energy efficiency measures, especially for income-qualified households, including for heat pumps

      • Goes into effect 2023

  • Residential solar tax credit:

    • ​30% of the installed cost

      • Effective immediately

  • Commercial solar tax credit:

    • 30% of installed cost: this includes battery storage

      •  Effective immediately

    • Potential to increase this tax credit depends on domestic content, low-income/tribal areas, etc. 

    • Tax-exempt entities (including local governments and nonprofits): direct pay option means that these entities can now access the benefits of the tax credit even though they don't pay taxes 

      • Goes into effect in 2023

  • Rural Energy for America Program (USDA REAP): Farms and rural small businesses loans & grants

    •  Funding is more than tripled, and grants can now cover up to 50% of project costs.

    • CERTs provides direct assistance on this program, including non-sales solar site assessments.

Paid for in part by funding from the UMN Northeast Regional Sustainable Development Partnership.

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