IRA has tax breaks, rebates for modernizing homes

2022-08-13 06:37:32 By : Ms. ada Guo

Homeowners interested in adding rooftop solar panels, installing heat pumps and otherwise green-ifying their houses have plenty to like in the big climate, health and tax package likely to pass Congress in the coming days.

Why it matters: For consumers, the bill — called the Inflation Reduction Act (IRA) — has an array of rebates and tax breaks that will reduce green tech's upfront costs. That tech, in turn, generally leads to lower long-term energy bills, among other benefits.

Among the IRA's most important green home provisions: It extends a 30% federal tax break for rooftop solar installations for 10 years.

What they're saying: "In transitioning from a fossil fuel economy to a clean energy-powered, efficient electric economy," says Ari Matusiak, CEO of electrification advocacy nonprofit Rewiring America, "what we will be doing is effectively transferring wealth back from energy producers to energy consumers."

The IRA's tax breaks and rebates will also benefit companies that do the actual work of modernizing homes.

Baird also argues that electrification will have big public health benefits, citing recent research saying gas stoves emit pollutants that can worsen or cause respiratory illnesses.

Yes, but: Modernizing homes will still be expensive, even with the IRA's rebates and tax breaks — yet options like leasing equipment can reduce up-front costs for many.

What's next: The IRA has already cleared the Senate, and it's broadly expected to pass the House by the end of this week. If that happens, the various homeowners incentives will phase in over time after President Biden signs the bill into law.