The following commentary was written by Charles Hua, policy analyst at Rewiring America; Ana Sophia Mifsud, a manager within the Rocky Mountain Institute’s (RMI) carbon-free building team; and Robin Lisowski, managing director of policy at Slipstream. See our commentary guidelines for more information.
The Inflation Reduction Act is an unprecedented investment in clean energy and provides a transformative opportunity for Michigan to move toward a healthier, more affordable, and safer future.
By signing this groundbreaking bill into law last year, President Biden directed nearly $400 billion in federal funding for climate initiatives through a mix of tax incentives, grants, and loan guarantees. Depending on household income, Michigan residents can take advantage of tax credits — and soon up to $14,000 in rebates — for making homes less dependent on fossil fuels and more efficient, including technologies like heat pumps and insulation.
But still, states like Michigan have a huge role to play by leveraging these millions in federal funding to invest in clean energy and ensure households are powered by resilient, healthy, and affordable sources of energy.
Michigan has already taken steps toward securing the benefits of clean energy. In 2020, Governor Whitmer committed the state to economy-wide carbon neutrality by 2050. A year later, the state developed the MI Healthy Climate Plan (MHCP) that charts a path to reach a goal halving emissions by 2030. Just last week, Governor Whitmer was one of the 25 members in the bipartisan coalitions of the U.S. Climate Alliance who committed to collectively reach 20 million residential electric heat pump installations by 2030 — potentially quadrupling the number of residential heat pumps currently in operation. The state legislature is currently considering implementing a clean energy standard, which could single-handedly put Michigan over three-quarters of the way to its 2030 climate goals.
Unfortunately, bad faith actors determined to keep homes reliant on inefficient and dirty energy sources would have you believe that Michigan lawmakers are wheeling and dealing behind closed doors to ram through sustainable initiatives without any public debates. But nothing could be further from the truth.
The Department of Environment, Great Lakes, and Energy has been soliciting feedback from the public on implementation priorities for the MHCP, and Governor Whitmer has already signed several bipartisan pieces of climate legislation into law.
The benefits these clean energy initiatives will bring to Michigan households can’t be understated.
This June, Michigan paid the 11th highest rate for energy in the country: 19 cents per kilowatt per hour — well above the national average. This is even more harmful to low-income communities. While the average Michigan household spends 3% of its annual income on energy, low-income households spend upwards of 15%. Furthermore, in the Midwest the cost of fossil fuel expenditures for heating has steadily increased since 2019. We can expect for fuel costs to continue to increase in Michigan. A recent analysis of Michigan’s gas utility, Consumer Energy, which provides gas service to nearly 2 million Michigan households, predicts that gas bills will increase 49% in 2030 compared to 2021. This is partly because the utility plans to spend $11 billion in infrastructure investments in their gas distribution system between now and 2030.
By installing a heat pump, which can both heat and cool a home using electricity, the Department of Energy estimates that many American households can save significantly on operating costs. Households will have one appliance that does the job of both a fossil fuel heating system and a traditional AC unit — and does both jobs better. Heat pumps are more effective at maintaining a comfortable and consistent temperature, even during peak summer or winter days, and are 3 to 5 times more efficient than most fossil fuel heating systems. Households that heat with delivered fuels, like propane, are expected to benefit most.
Induction stoves are also safer than gas options. Induction stoves are also safer than gas options. 12.7% of childhood asthma cases in the US are linked with emissions from gas stoves, and cooking for just one hour can aggravate the condition. In fact, 75% of emissions from a gas stove — including the carcinogen benzene — leak even when the stove itself is off.
Of course, Michigan will have to build out the infrastructure to support carbon neutrality by 2050. But doing so will mean jobs. Since the IRA was signed a year ago, nearly 200,000 clean energy jobs have been created in the Great Lake State to support electric vehicle manufacturing alone. In fact, the state is predicted to see a GDP growth increase of 2.5% above the current baseline growth rates by 2050 as a result of the clean energy jobs and IRA investments.
Clean energy is the future Michigan residents want. More than half of Michiganders supported the IRA when it first came out, and a whopping 71% wanted the state to secure more federal dollars. A poll released in April showed 73% of Michiganders want their government to do more to keep energy bills affordable — and these federal incentives offer a distinct opportunity to do just that.
Federal funding offers the state a huge opportunity to bring in long-term jobs and help households switch to safer, more affordable, and more efficient appliances. It’s the future that all Michiganders deserve.