Seiji Matsumoto
By Nadja Popovich & Elena Shao February 1, 2023
American consumers can now save thousands of dollars on electric cars, heat pumps, solar panels, and other energy-efficient appliances.
These savings were made possible by the Inflation Reduction Act. This is a major legislation that aims at reducing planet-warming greenhouse gases emissions. The law addresses two main sources of these emissions: transportation and housing. It helps Americans electrify their homes and makes it more affordable to make the most efficient choices through tax credits and rebates.
Experts said that it will take some planning to make the most of the new law, especially when it is about major purchases or renovations. Although many of the benefits will still be available for at least a decade, not all of them are yet available. Federal tax credits went into effect on January 1, but rebates, which offer consumers billions in upfront discounts or partial refunds through state and tribal governments, will not go into effect until later in the year.
Here are the steps to make savings:
Home Improvements
There are many ways to save money if you own your home. You can make energy-saving improvements to your home or upgrade to more efficient electric appliances. Although many of the provisions could be applied to renters technically, experts say there is still uncertainty about what is covered. For example, it isn’t clear if tax credits for heat pump will apply to window units.
Get a home energy audit
Solar panels and other renewable energy options can be installed
Energy-saving renovations are possible.
Install a heat pump
Redeem your rebate for renovations that reduce your energy consumption +
Discounts for energy-efficiency upgrades for households with lower incomes are not yet available
Not yet available
Electric Vehicles
A renewed tax credit can lower the cost of an electric car, pickup truck, or SUV for many buyers. For the first time, credit is available for used electric cars. You won’t be able to save on other types of vehicles like e-bikes and motorcycles.
Buy an electric car, pickup truck, or SUV +
Buy an used electric car, pickup truck, or SUV +
If you live in a low-income or rural area, install an electric vehicle charger at your home
