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Consumer Resources: New Climate Bill

Saving the Planet, Saving You Money

As your Congressman, I am fiercely committed to promoting a future with enhanced energy options that are both clean and affordable. That’s why I voted for the Inflation Reduction Act, which includes historic climate legislation that cuts energy costs for hardworking area families while making enormous strides to protect the environment for future generations.

Thanks to the passage of the Inflation Reduction Act, you can save money through a wide range of tax credits and rebates for clean energy upgrades, including:

  • Tax credits of up to up to $1,200 for energy efficient home improvements such as insulation and energy-efficient windows and doors
  • Tax credits of up to $2,000 for electric heat pumps or central air conditioners and rebates of up to 100% for certain appliances for low- and moderate-income households
  • Tax credits of up to 30% for installing rooftop solar panels, which can save you over $300 per year in energy costs
  • Tax credits up to $7,500 for new electric vehicles and up to $4,000 for used electric vehicles, saving you money at the gas pump while making our streets and air cleaner

The historic investments included in the Inflation Reduction Act will bring down consumer energy costs and increase American energy security while substantially reducing greenhouse gas emissions. The combined investments will put the U.S. on a path to roughly 40% emissions reduction by 2030 and represents the single biggest climate investment in U.S. history.

Area residents who take advantage of the clean energy incentives listed below can generate thousands of dollars in savings. Available tax credits and rebate programs will make it easier and more affordable for you to weatherize your home, upgrade to more efficient appliances, purchase electric vehicles, install residential clean energy systems, and save money on your energy bills.

What tax credits are available now? 

Up to $7,500 for Purchasing a New Electric Vehicle

This new legislation makes it less expensive to purchase a new plug-in electric vehicle (EV) or fuel cell vehicle (FCV) by modifying the existing federal tax credit known as 30D and extending it for ten years. The law also introduces new eligibility requirements for the credit based on buyer income, vehicle price, vehicle assembly location, battery manufacturing location, and critical mineral/battery component origin. Learn more about how you can get up to $7,500 for buying a new EV here.

Eligible buyers are limited to individuals with a modified adjusted gross income less than $150K (or $300K for joint filers).

Qualifying vehicles must have a Manufacturer Suggested Retail Price (MSRP) of less than $55K (or $80K for vans, SUVs, or pick-up trucks), and meet certain battery manufacturing and component criteria. Click here for further details.

To claim the credit, file Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-in Electric Vehicles) with your tax return.

Up to $4,000 for Purchasing a Used Electric Vehicle

To help make EVs more affordable - and help you save money on gas long-term - the bill establishes a new tax credit for used EVs called the Previously-Owned Clean Vehicle Credit (25E). Learn more about how you can get up to $4,000 for buying a used EV at this link.

Eligible buyers can use this credit to get a discount of 30% off the cost of a used EV, up to a maximum of $4K. To qualify for this credit, buyers must have a MAGI of less than $75K (or $150K for joint filers).

Eligible vehicles must have a MSRP of less than $25K, weigh less than 14,000 pounds, and be at least two years old (model year must be at least 2 years older than the year of sale.) Purchases must be made through a dealer.

To claim the credit, complete Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-in Electric Vehicles and New Clean Vehicles), and file it with your tax return for the year you took possession of the vehicle.

Up to $1,000 for Installing a Home EV Charger

Homeowners residing in eligible lower-income or rural census tracts can get a tax credit of 30% of the cost of installing a home EV charger on their property, up to a maximum of $1,000. This credit could also help renters by encouraging apartment complexes and other businesses to install EV chargers for residents and customers through a tax credit of 30% (up to a maximum of $100,000) for installation of EV chargers on business and investment properties.

More information on the credit can be found here.

To claim the credit, complete Form 8911, Alternative Fuel Vehicle Refueling Property Credit, and file it with your tax return for the year you placed the EV charger in service. 

Up to $3,200 for Making Your Home More Energy Efficient 

This legislation expands and extends the 25C tax credit, now called the Energy Efficient Home Improvement Credit.

Homeowners can receive a tax credit equal to 30% of the cost of all eligible energy efficient home improvements made during the year.

The annual amount homeowners can claim for heat pumps, heat pump water heaters, or biomass stoves is capped at $2,000. Upgrades eligible for the credit includes equipment, installation and labor costs.

Homeowners can also claim up to $1,200 for other energy-efficient improvements including up to: $150 for a home energy audit, $250 for a new exterior door ($500 total for all exterior doors); $600 for new exterior windows and skylights; $1,200 for insulation; and $600 for an upgraded electrical panel.

For more information, check out this IRS FAQ on the 25C credit, this ENERGY Star Guide on qualifying purchases, and Rewiring America’s Fact Sheet.

30% Tax Credit for Rooftop Solar and Other Residential Green Energy

This 30% credit applies to purchase and installation costs for:

  • Solar panels;
  • Solar water heaters;
  • Fuel cell property expenditures; 
  • Small wind turbines;
  • Geothermal heat pumps; and
  • Battery storage systems.

For more information, check out this IRS FAQ on the 25D tax credit, this ENERGY Star Guide on qualifying purchases, and this Department of Energy guide to the Rooftop Solar tax credit .

What tax credits/rebates are on the horizon?

The Inflation Reduction Act will include the following rebates that have not yet been enacted. This page will be updated once that information is shared.

Up to $14,000 of Up-Front Discounts on Electric Appliances and other Home Electrification Upgrades

Electrifying homes can save families hundreds of dollars on their energy bills but can also have high up-front costs. The new law allocates $129 million to help low- and moderate-income households in Pennsylvania reduce their energy bills through the High-Efficiency Electric Home Rebate (HEEHRA) program.

Administered by the Pennsylvania Department of Environmental Protection (DEP), the program will provide point-of-sale rebates on the purchase of ENERGY STAR-certified electric appliances and other home electrification projects. It may take 1-2 years to get the program up and running, so it is not yet known when the rebates will be available to consumers in Pennsylvania.

Low-income households that make less than 80% of their Area Median Income (AMI) will be eligible for rebates that cover 100% of the purchase and installation costs for qualified electrification projects. That means an individual living in Lackawanna County who makes less than around $41K a year (or a family of four with an income of less than 59K) could be able to get a new electric stove, heat pump HVAC, and more installed in their home for free.

Moderate-income households making between 80-150% AMI will be eligible for rebates covering 50% of the cost of home electrification projects. To learn more about whether you might qualify, check out this IRA Savings Calculator resource from Rewiring America.

The maximum allowable rebate amount for qualifying upgrades is $14,000 and includes:

  • Heat pump HVAC for heating/cooling        $8,000
  • Heat pump water heater                             $1,750
  • Electric stove, cooktop, range, or oven        $840
  • Heat pump clothes dryer                             $840
  • Upgraded breaker box                                 $4,000
  • Upgraded electrical wiring                          $2,500
  • Weatherization (insulation, ventilation)      $1,600

Info for Renters: Renters may be able to use the rebates to purchase portable appliances like window-unit heat pumps and induction cooktops. Renters may also receive other indirect benefits if the owner of their rental unit makes use of the program.

Up to $8,000 off on Energy-saving Home Improvements

The new law will allocate $129 million to help families undertake comprehensive energy-efficient home improvement projects through the Homeowner Managing Energy Savings (HOMES) rebate program.

The rebate is designed to reward homeowners for making energy-efficiency retrofits that achieve greater energy savings. For example, households that reduce energy usage by 20% can get a rebate of up to $2,000, while households that achieve a 35% reduction in energy usage can get up to $4,000.

Low-income households (making less than 80% AMI) are eligible for larger rebates—80% of the project cost up to $8,000.

Administered by the Pennsylvania Department of Environmental Protection (DEP), it is unclear when the rebates will be available to Pennsylvania consumers.

Note: This resource page was compiled to raise awareness of new clean energy and electrification incentives for constituents and is not intended to substitute for professional financial advice.

Other helpful resources to check out include the White House’s Clean Energy for All site, Rewiring America’s IRA Savings Calculator, and the Database of State Incentives for Renewables & Efficiency (DSIRE).