Energy Savings and Utility Bill Reduction: The Underreported Law That Can Make Significant Impact on U.S. Households

The Inflation Reduction Act (IRA) was U.S. history’s most monumental climate action. After its initial hype, many consumers and energy professionals wondered how effective its implementation has been. Updates and reporting on project timelines and financial assistance distribution have been minimally publicized. So, how is it helping utility providers and workers save homeowners money and power? 

What the IRA Promised Energy Professionals

Energy workers communicate the IRA’s home improvement opportunities to residents. They can host workshops, share information during appointments or send informational materials to utility clients. These are the highlights to advertise to building managers and homeowners.

Heat Pumps

One IRA provision was to get more people interested in geothermal energy. The federal government started offering tax credits for heat pumps, which HVAC and energy specialists can offer homeowners looking to upgrade. This includes air source heat pumps, water heaters and biomass stoves. People can get 30% of the costs back up to $2,000.

Renewable Energy Systems

This includes residential wind turbines, solar power, battery energy storage, fuel cells and more. Get 30% back for tech installed before January 1, 2033. The rebate percentage goes down to 26% for 2033 and 22% in 2034.

Electric Vehicles (EVs) and Charging Stations

The Clean Vehicle Tax Credit program offers a $7,500 credit for eligible new EVs after 2023. Pre-owned models can net $4,000 back. The IRA lengthened the 30C Alternative Fuel Vehicle Refueling Property Credit, which pays back up to 30% of the cost for eligible chargers, or $1,000.

Energy Efficiency Tax Credits

Experts can recommend these solutions to homeowners, depending on which area of the home needs insulating:

• Attics: Loose-fill or batts
• Ducts: Duct mastic, vapor barriers or appropriate tapes
• Ceilings: Spray-foam, blanket-fill, loose-fill or structured panel insulation
• Exteriors: Injection foam, loose-fill blown-in cellulose, blown-in blanket or roll insulation
• Foundations: Insulating concrete or geographically appropriate materials

Garage doors require special attention because they are the most prominent heat loss point in the home. Garages affect adjacent living spaces, rooms and bedrooms. Insulation keeps the whole house more comfortable and can significantly increase a home’s energy efficiency and reduce energy costs. The Department of Energy suggests insulation with a high R-value, such as rigid foam and radiant barriers to reduce electric bills. Home improvements can only earn a lifetime maximum of $500 or 30% of the installation.

Home Audits

Before homeowners spend needless money on energy audits, professionals must inform them of the $150 yearly credit the IRA allows. However, some utility companies provide complementary inspections.

Additional Resources

Many communities may need to learn that extra assets are available for low-income areas, affordable housing developments and Indigenous land. This is an effort to promote environmental justice, which has never been seen in other energy-related legislation.

When America Sees Savings

Many Americans will reap the rewards of their eco-friendly replacements when tax season arrives. The most obvious savings are in the thousands of dollars of available credits, but it will save even more money and electricity over the products’ lifetimes.

The benefits compound. Improved storm windows could lower heat loss by up to 50%, plus the money from the Energy Efficiency Tax Credit. Eco-friendly lights lessen use by up to 75%, and outdated systems or leaks waste between $200-$400 annually in commercial and residential buildings. A hot water heater is in the top three most demanding expenses. Consider households moving to decentralized solar or geothermal and how this is no longer a financial or energetic concern.

Every switch the IRA advertises allows homeowners and building managers to feel the importance of their sustainable transition with these rewards. How successful has this been on a national scale?

The White House posted a recent report detailing its progress on power and financial savings. The findings are optimistic and understated in how much federal legislation and support incites change, even for individual households:

• Over $360 billion has gone to clean energy advancements in the private sector.
• Electricity rates are on track to reduce 9% by 2030.
• Public buy-in is increasing, with 65% and 54% in favor of solar and heat pump tax credits, respectively.
• Families claiming credits of up to $2,000 save around $500 yearly on electric.
• Around $8.8 billion is helping low- and middle-income households with energy rebates.

How U.S. Households Impact Global Emissions

The building sector already produces 39% of the world’s total emissions, so nationwide legislation will be pivotal for reductions. What metrics will this legislation change?

Energy Consumption Reductions

The most apparent win is encouraging homes to use less electricity. Lower demand is critical, primarily when energy poverty is an increasing problem in rural and urban areas alike. Efficient upgrades are non-disruptive ways to reduce fossil fuel reliance and burdens on power plants.

Renewable Energy Promotion

If embracing renewable energy is as cost-effective as using fossil fuels, homeowners are more inclined to see the benefits of green, decentralized power. Promoting renewable utilities also promotes energy independence, which is necessary in an era of blackouts and grid overloads.

Innovation Adoption

Many of the IRA’s interests lie in emerging technologies, and this mindset will stimulate innovation. It will mean more than improving EV batteries and solar panels — it will extend into other industries, like wearable technology or cybersecurity.

Every sector has a chance to support efficient devices by making them more compatible or easy to use. It is a prime opportunity for research and development into new business verticals.

Long-Term Emissions Reductions and Targets

The IRA demonstrates how the culmination of many homes’ efforts makes a significant impact. This should set a positive precedent for other nations contributing to climate objectives and accords like the Paris Agreement or the Sustainable Development Goals from the United Nations. The IRA’s foundation aligns with long-term sustainability, despite feeling localized to single households.

The IRA’s Legacy

Many citizens do not keep up with legislation, but the IRA is crucial for bettering building operations. Increasing awareness of its incentives and opportunities affirms why passing it was so monumental in the first place. Additionally, energy workers who prioritize publicizing its advantages will be the reason for future legislation to come to fruition, helping the planet even more.