The Inflation Reduction Act (IRA) Federal Incentives for Electrification

Thanks to the successful passage of the IRA, there is no time like the present to start planning your path to home electrification. Federal tax credits for upgrades  from fossil-powered appliances to uber efficient and nearly carbon-emissions free electric units can be applied now for everyone. There are some important aspects of the IRA, such as point-of-purchase rebates, that will take until late 2023 or early 2024 to become available to most Americans. But households with incomes more than 150% of the regional median income have little reason to wait, since the only incentives they can receive are already activated.  ($89,800 is the median in Shasta County according to the Fannie Mae website.) 

We’ll be watching and waiting also for news of the automotive industry delivering a plentiful supply of EV cars assembled in the U.S.A. that will qualify for the IRA incentives. Transitioning the automotive industry is a huge and complex task.  The IRA is constructed to provide the time that’s needed to bring the supply chains for EV batteries and more into the United States.  

The IRA is about making a smart transition away from fossil energy and towards greener energy sources. The manufacturing carbon footprint of any of the major home appliances is large, consequently replacing an HVAC system, for example, that has more than a couple years left in its average “life” span, could wastefully increase one’s personal carbon footprint. Wise use of resources is part of slashing carbon emissions.  

The Biden administration has an easy-to-use website about the IRA. And the not-for-profit, Natural Resources Defense Council (NRDC), has put together a very helpful guide to the IRA.