Congress passed the Inflation Reduction Act (IRA) on August 16, 2022. The law includes the most ambitious climate legislation in U.S. history. It provides rebates and tax incentives to citizens and carbon-reduction grants to cities. Especially admirable is that it is the first law in this vein to put the needs of disadvantaged communities front and center.
The greatest share of funding (about 50 percent, or $207 billion) goes to “energy supply,” most of which is for shifting from fossil fuels to low-carbon, alternative energy sources. This funding comes primarily in the form of tax credits for investment in “clean energy infrastructure,” but there is also funding for not-so-clean energy supply, such as nuclear, carbon capture, and hydrogen. The IRA also provides $47 billion for a unique feature called “elective payment of applicable credits,” whereby government agencies (such as Pasadena Water and Power) that don’t pay taxes can get payments for clean electricity production and advanced energy projects.
Second, but also high on the priority list, are incentives for electrification of buildings, including housing and appliances. Let’s look at residential housing. There will be rebates or tax incentives for:
- Heat pumps* for heating/cooling, water heaters, and clothes dryers
- Electric stoves and ovens, including induction cooktops, to replace dangerous and health-harming gas stoves that contribute to asthma and other respiratory diseases
- Upgrades to electric panels, wiring, and insulation and air sealing
- Rooftop solar (including community solar) projects
The IRA also supports adoption of electric vehicles, providing rebates, tax credits, and grants for EVs, charging stations, city buses, large municipal trucks, and smaller vehicles in the city fleet.
Supporters of the IRA say that it not only will help address the climate crisis but also will integrate workforce development, adding almost 1 million new jobs between now and 2030.
The IRA will kick off phenomenal changes in our environment. It’s up to all of us and our area cities to take advantage of this unprecedented opportunity and, as League of Women Voter members, to encourage our elected officials to take every action possible to implement the beneficial provisions of this new law.
—Kitty Kroger and Cynthia Cannady, Chair, Natural Resources Committee
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*A heat pump controls your home’s climate by redistributing the heat that is already in the air. In the winter, it extracts heat from the outside environment and moves it inside your home. In the summer, the process is reversed: The heat pump takes heat from inside your home and moves it outside.
