Since the IRA passed, I think more people have asked me about how to use it to upgrade their homes — and buy heat pumps, install solar panels, etc — than about any other policy.
Now I can point them to this extremely useful, detailed guide by @emilypont: https://t.co/w8LaSGPeOD
— Robinson Meyer (@robinsonmeyer) August 16, 2023
Since there has been some discussion of these issues in the early morning threads recently, thought I’d give you all a link — “A practical guide to using the climate law to get cheaper solar panels, heat pumps, and more”:
… [U]nderstanding how much funding is available for what, and how to get it, can be pretty confusing. Many Americans are not even aware that these programs exist. A poll conducted by The Washington Post and the University of Maryland in late July found that about 66% of Americans say they have heard “little” or “nothing at all” about the law’s incentives for installing rooftop solar panels, and 77% have heard little or nothing about subsidies for heat pumps. This tracks similar polling that Heatmap conducted last winter, suggesting not much has changed since then.
Below is Heatmap’s guide to the IRA’s incentives for cutting your carbon footprint at home. If you haven’t heard much about how the IRA can help you decarbonize your life, this guide is for you. If you have heard about the available subsidies, but aren’t sure how much they are worth or where to begin, I’ll walk you through it. (And if you’re looking for information about the electric vehicle tax credit, my colleague at Heatmap Robinson Meyer has you covered with this buyer’s guide.)
What kinds of home improvements are covered by the Inflation Reduction Act?
There’s funding for almost every solution you can think of to make your home more energy efficient and reduce your fossil fuel use, whether you want to install solar panels, insulate your attic, replace your windows, or buy electric appliances. If you need new wiring or an electrical panel upgrade before you can get heat pumps or solar panels, there’s some money available for that, too.
How do the subsidies work, exactly?
The IRA created two types of incentives for home energy efficiency improvements: Unlimited tax credits that will lower the amount you owe when you file your taxes, and $8.8 billion in rebates that function as up-front discounts or post-installation refunds on equipment and services.
The tax credits are available now, but the rebates are not. The latter will be administered by states, which must apply for funding and create programs before the money can go out. The Biden administration began accepting applications at the end of July and expects states to begin rolling out their programs later this year or early next…
*Tons* more information at the link. Even if you’re not in the market at this very moment, remember: Sharing is caring!… and sometimes even the ‘most unlikely targets’ can be helped:
Solar has come to rescue in Texas https://t.co/eEz61ReOeb pic.twitter.com/dlcHulOnOq
— Science Is Strategic (@scienceisstrat1) August 17, 2023
Baud
Thanks for this info.
Betty Cracker
Meanwhile…
Remember that next time you vote, Mr. Milligan. And tell your friends!
Baud
@Betty Cracker:
Either DeSantis is feeling cocky, or some good soul wants citizens to know the truth.
ETA: Really odd for him to veto something his supermajority legislature passed.
satby
Good info AL, thanks! My old house needs an electric panel overhaul (probably) but living in IN it’s always a toss-up whether a good federal program will be available.
@Baud: Bet it’s someone at the FL Dept. of Energy who realizes that veto also put a lot of their jobs on the future chopping block.
Ericblair
70 percent of people have heard nothing at all about how to save thousands of dollars on heating and insulation. Obviously we need more media coverage of Hunter Biden’s laptop.
HeartlandLiberal
At our old home, which is on the market now, we having moved to a senior independent living community, and shed 2,000 sq ft, we at a geothermal unit for heating and cooling. The house was all electric. We kept contract to have the geothermal unit checked every six months. The loop well under the house is in excellent shape. It is a heat pump on steroids. The house was built 32 years ago, when tax breaks were encouraging people to put in geothermal units. The upfront expense is big, but the savings over the life of the unit are tremendous.
nonrev321
“A poll conducted by The Washington Post and the University of Maryland in late July found that about 66% of Americans say they have heard “little” or “nothing at all” about the law’s incentives for installing rooftop solar panels, and 77% have heard little or nothing about subsidies for heat pumps.”
Good God Almighty. How bad can Dems and the Whitehouse be at messaging? A: Pretty bad! If there is one common thread that runs through all Democratic administrations for the past 40 years its that they don’t know how to message.
Why aren’t there Dems on every talk show everyday, as much and as many as possible, talking about the accomplishments of this administration.
Baud
@nonrev321: When you have a ton of accomplishments, it’s hard to focus on a few.
Baud
Yet again, Today show describes Biden meetings with foreign leaders as “high stakes.”
Brachiator
A note on energy credits. The link has an example of using the credit for solar panels.
What happens with the $24,500 net cost of solar panels?
You add this to the cost or basis of your home to get a new adjusted basis. You would keep a record of this with other information about your home.
So, if the home originally cost $100,000, the new adjusted basis would be $124,500. You would use this amount to determine any gain if you later sell the house.
lowtechcyclist
There didn’t seem to be any information at the link about which tax years the credits apply to. We had to replace our heat pump system last summer, so whether we can take those credits on our 2022 taxes would be helpful to know. If so, it would certainly be worth amending our 2022 return to claim the credit.
Betty Cracker
I was reading an article at The Daily Beast about a Georgia teacher who was fired by a Repub-dominated school board for reading a book that includes a nonbinary character to 5th graders. This certainly isn’t the most important takeaway from the story, but I think I stumbled across the PERFECT Repub name: Randy Scamihorn. He’s one of the board members who voted to fire the teacher.
ETA: Not sure how it’s pronounced, but my guess is scammy-horn.
Geo Wilcox
@Baud: Even odder is them not over riding his veto. Unless that isn’t a thing in dictatorial Florida.
Brachiator
@lowtechcyclist:
You take the credit, if it is available, in the year in which the expense occured.
azlib
The 30% tax credit can be spread over several years. It starts after the installation of the system. What I am doing since I am restired is using the credit to offset the tax on my 401K required minimum distributions. The 30% credit is an incredible incentive. The system I am installing will in net replace all my electric utilization. Here in AZ I will be a net user of power from the grid in the summer, but a net provider of power in the winter.
The main thing is carefully vett the installer and ask for referecnes.
Spanky
@nonrev321:
They need to be invited, and no one is getting airtime.
JML
@Spanky: and the media would much rather talk about TFG than anything that’s policy related. Doing a story on tax credits requires that someone actually understands them, and even then those fools don’t know how to package it up in a way that’s interesting or accessible. (Most people will look at something on solar panels as being something that they can’t afford, and therefore meaningless to them, which risks them turning the channel) Our media, especially our political media is flat-out TERRIBLE.
smedley the uncertain
Thanks for the information. We are in the process of upgrading the utilities in our new down sized home.
Heat pumps replace gas heating, Induction kitchen stove and solar on the roof (later).
Information is not readily available locally. BJ comes through again.
Bupalos
I’m a little perplexed at how few folks on our side know about or talk about our signature legislative achievement. It’s our job to make this stick, politically, and to make it stick for the climate. Implementation of the rebate program through the states is going to be half the ballgame here, that’s the potentially really revolutionary part. Without energy and enthusiam on our side, political operatives can quietly strangle it.
I mean, I’m considering making it my job literally…but everyone shoukd understand the stakes, take advantage of the opportunities for decarbonization, and talk this up to everyone. This is political outreach through policy and good governance and looking to the future. It needs to be the Democratic brand.
Bupalos
@lowtechcyclist: Sorry to say the credit was only $300 in 2022. Still worth the amended claim though, if you didn’t take it.
Bupalos
21 comments, 6 hours later.
I guess I’ll start theorizing on the apathy.
One of the big concessions in this bill was routing the most structurally revolutionary and politically impactful part– free and half-priced upgrades for low and moderate income folks– through state energy offices. That meant a full 12-18 month delay and, as Desantis has shown, the opportunity for the worst kind of Rethugs to sabotage it on the down-low. That delay and uncertainty is probably why the administration hasn’t really been shouting about it, because it is maybe even counterproductive for folks who need to replace their unit NOW to be told “yes that’s going to be free or half-priced later, when the bureaucracy gets done wrapping all the red tape around it, and making the line you will need to get in as narrow and long as possible.” That actually could be a political net-loser. It can reinforce the “government is the problem” narrative team red has been running on for several decades.
It really needed to be a refundable tax credit. Lobbyists probably were aware of this and that’s probably why it is what it is. But what it needs now is people to be aware and stop other states from doing what Desantis is doing. There needs to be more political energy behind it, but that’s probably going to have to be more organic. I think the political stakes here are very, very high. There has been some optimism lately around Dobbs and climate change powering some political realignment. Democrats have to show that their actual governance makes a tangible difference with respect to climate action beyond the posturing.
StringOnAStick
We’ll be using this to get rid of a gas stove and maybe a much more efficient refrigerator. I’m eyeing our old builders grade furnace and it’s age, thinking a heat pump is in our near future as well. We got a 10% check from the state (OR, a state program not associated with the IRA) for the extensive insulation upgrade, and we got a tax credit last year for two solatubes that so improved the previously dark centre of this one story house. We gain so much cooling from the 100 year old Ponderosa that shades the house that I think it would be a net wash to cut it down so we could have solar, so we contracted to buy solar power from the utility company.
We were going to do these things anyway, and it has been frustrating finding out information about how the program works and where we’ll get the credits/rebates, but I chalk that up to the state having to set up the reimbursement scheme and that being slow because the R’s are still trying to claw back the IRA through budget terrorism, and they’re not done doing that yet since you know it will figure prominently in this fall’s game of chicken over shutting down the government by refusing to pass a budget.
Ms. Deranged in AZ
I had solar panels installed a couple of years ago but I did not get batteries to hold the charge so obviously in the winter months some of it gets wasted and at night I’m still reliant on the electric company. Have any of you Jackals installed batteries and if so, what kind? Also does anybody know if the tax credits would cover the batteries?
PaulWartenberg
I’m not sure what I can get, living in Florida, but if a home battery-backup installation for hurricane survival is doable is there money for that?
RaflW
@Baud: Clearly the HVAC lobbyists check didn’t arrive in Ron’s greasy hands fast enough.
RaflW
@nonrev321: VP Harris has been crisscrossing the country making appearances and trying to get local TV and newspaper coverage.
Cabinet members are out there. Joe too.
Yes of course the WH can do more, as can state and local Dem units. But the media has also treated this as a gigantic yawn.
It’s frankly awful. I listened to yet another 5 minute segment on NPR two days ago about how Biden can’t get his message out. That 5 minutes could have been a segment on how people feeling the pinch of inflation could be installing energy saving heating and cooling, but we all know that’s just not ‘sexy’ news. Also requires some reporting, not just jawboning on open mics.
Bupalos
@Ms. Deranged in AZ: Yes the tax credits cover batteries.
In Ohio, we have net metering, so we didn’t do batteries, just sized the installation so that the total yearly production would zero out. If you don’t have net metering then I think batteries make a lot of sense.
Geminid
@RaflW: Stories of new factories that were enabled by the IRA get covdrage in local news. When Cummins Engines added an electrolyser production line to their Fridley, Minnesota plant, state and local media reported on the event. Secretary Granholm, Governor Walz and other officials including Rep. Ihlan Omar spoke. Local TV stations and state newspapers love that kind of stuff.
Bupalos
@PaulWartenberg: I’m don’t think batteries are included outside of supporting a solar installation. But if you already have solar, or if that’s part of the plan (or you can make that part of the plan), then yes, unlimited 30% credit
Ms. Deranged in AZ
@Bupalos: I don’t understand how net metering solves the problem. Are you saying that your power company tracks your usage and keeps your excess and gives you credit for it? My problem is that at night the panels aren’t pulling in anything and here in Phoenix we run AC 24/7 at least 9 months of the year. So no matter how much we try to use during the day there are still costs after sundown. Without batteries to store up what was pulled during the day, my system still pulls from APS at night. AND APS won’t use or store any excess that I create. They should but it’s a huge problem here in AZ because they simply refuse to do so.
RevRick
If you’re on Facebook, share Robinson Meyer’s tweet. I am a Democrat. I’ll take ownership of getting the word out.
So, I shared to my newsfeed and two groups I belong to.
Chris T.
@Ms. Deranged in AZ:
It doesn’t solve the problem, it sidesteps it entirely. For this to work—i.e., whether it works for you—and to what extent, there are Conditions.
Specifically, the overall idea behind “net metering” is that if you generate more power than you use at (say) 2 PM, your electric meter spins backwards at that time. If you use more than you generate at 11 PM, your meter spins forwards as usual. If the amount of “spin backward” catches up to the amount of “spin forward”, the total movement of the meter, at the time the meter reader comes out and reads it, is zero—and therefore your bill is $0.
Naturally, power companies hate this. So they complicate it up as much as possible so that you won’t be able to understand how it works for your particular power company in your particular city in your particular state. The #1 complication is to put a doohickey on the (old style, spinning-dials) meter so that it never turns backwards. That way, if you’re “overgenerating” at 2 PM, you get no credit at all for it.
This is easy and cheap for them to do, especially with modern digital power meters that can simply not count backwards ever. If they can get away with it, that’s what they do.
If your local PUC is actually on the side of the consumer, they may be required to give you credit for generating power for your neighbor’s house. But they can convince the PUC that you shouldn’t get full credit, because they supplied the wires (and meters and stuff) and you should pay your electric company for this. There’s even a bit of sense to this argument! So they often get away with it, and the result is always, magically somehow, that power at 2 PM that you overgenerate is worth $.000001, while power you consume at 11 PM costs you $100. OK, I exaggerate slightly.
The bottom line, as it were, is that you have to spend about two months reading up on your local tariffs to figure out how it all works where you are, and then if you live in PG&E land (most of California) they’ll change it all up in a few years anyway. But in the meantime, net metering may work for you. It did for me, for almost five whole years, dropping my monthly bill from $200 to $20.
Ms. Deranged in AZ
@Chris T.: Thank you that was very helpful!