Inflation Reduction Act of 2022:
Are you interested in attaining energy independence and financial security? Then, look no further. In August of 2022, Congress approved the Inflation Reduction Act, which among other things, aims to provide financial assistance for energy upgrades over 10 years. Post Covid-19 pandemic, the government hopes to combat unprecedented inflation in America. Through investments in the public interest, and by closing taxpayer loopholes for the upper class, they hope to restore the affordability of everyday goods in average households.
To accomplish this daunting goal, they must address consumer demand while reducing the budget deficit. A budget deficit occurs when the government spends more than it makes, thus increasing United States’ debt. Throughout American history, elected government officials have been unable to stay within the budget. Only five times, ever, has the government budget been in surplus. One offered resolution to reverse this trend is by producing our own renewable energy. By investing in domestic energy production and infrastructure, the government hopes to decrease future expenses involving energy. Simultaneously, they hope to create a new booming industry for green-collar work in the United States.
Taxes are supposed to be used for the benefit of the public, in order to help everyone with access to basic needs such as energy, transportation, healthcare, and education. Instead, taxes traditionally seem to target the lower and middle classes while the upper class gets away with paying little to nothing. The Inflation Reduction Act of 2022 helps make the tax system fair for everyone.
Energy efficiency is one viable answer that addresses many core issues fueling inflation. For starters, providing the public with affordable energy efficiency helps everyone. While efficient technology such as electric vehicles and energy-efficient upgrades reduce energy demand, renewable energy sources such as solar rise to meet energy demand. All the while, clean energy creates new streams of revenue for the government and for small businesses. Energy independence puts the power back in the hands of the American people.
A Brighter Future
I think everyone, regardless of political party, could agree that improving the economy and creating a more reliable source of energy are positive goals. We might not all agree on how to get there, but we must admit that continuing to wrack up debt isn’t sustainable in the long term. If someone has a new solution where most presidencies have fallen short, isn’t it worth a fresh approach?
According to the estimated projections made by the Congressional Budget Office (CBO). The Senate forecasts that the Inflation Reduction Act may lower energy costs by as much as 40% in the average household. A new standard of tax enforcement also means families making $400,000 or more per year will no longer be able to evade taxes, which shall appropriately match their income bracket. Overall, the IRA of 2022 aims to increase the net income of average Americans, while collecting hundreds of billions in taxes from the ultra-wealthy; that’s an amount most Americans cannot fathom. CBO calculates that these measures can reduce budget deficits by $237 billion dollars over the course of ten years. As a result, we can combat factors driving inflation and reduce the budget deficit at the same time.
Energy Efficiency Incentives
So, what does all of this have to do with you? I’m glad you asked. Part of the $394 billion investment the Inflation Reduction Act makes is directly to American citizens in the form of tax credits and rebates. Tax credits from energy efficiency upgrades help reduce the amount of taxes you owe, or may even result in a refund. Contrarily, rebates give you money back for purchasing certain energy-efficient products. Both of these incentives help the public afford upgrades that they might have not otherwise been able to. In other words, the benefits of energy efficiency are more accessible to average homeowners.
The Inflation Reduction Act may cover up to 30% of the cost of qualifying improvements. Efficiency upgrades include but are not limited to windows, doors, weatherization, HVAC, appliances, solar, electric vehicles, and water heaters. Some of these items might be things that already need replacing. However, the long-term benefit of efficiency improvements is saving on utility costs, while at the same time reducing our carbon footprint. By reducing your dependence on utility companies, you also thwart their ability to continue raising your bills year after year.
How BarrierEnergy Can Help
Our goal is to make efficiency more accessible for all homeowners by offering our clients tailored research and consulting. With decades of experience, we have done years of research on efficiency incentives. We are here to guide you as you explore what options make the most sense for you. Please, don’t hesitate to book a free consultation.
“Tax Credits for Homeowners.” ENERGY STAR, United States Department of Energy, 30 Dec. 2022, www.energystar.gov/about/federal_tax_credits/non_business_energy_property_tax_credits.
“ENERGY STAR Rebate Finder.” ENERGY STAR, United States Department of Energy, www.energystar.gov/rebate-finder. Accessed 22 Aug. 2023.