A recent article at Bloomberg points out some of the big advantages of the recent Inflation Reduction Act for people considering home solar. When it comes to the recently passed law, EV tax credits have gotten much of the attention, largely due to controversies in how they’re structured. But the new law also offers a 30% federal tax credit for solar systems on homes, with no cap. That’s a pretty big deal, but it goes far beyond that, with other tax credits to electrify your home as well, giving solar an even bigger edge.
“There are so many incentives to install solar that the Inflation Reduction Act of 2022 might be more aptly titled the ‘Electrify Your Life Act,’” the article says.
So Many Different Tax Credits
One of the biggest things they point out is that it’s not just solar that’s getting restored subsidies and tax credits. On top of giving you a 30% credit for panels, the new law also covers battery storage, including those installed in 2022. So, you can use that to get something like a Tesla Powerwall, which will help you store solar energy for use at night or during a power outage. Even if you don’t have solar, the credit can be used for other renewable energy sources like wind turbines.
In addition, the law also includes tax credits for electric vehicles and charging stations. For EVs themselves, it brings back the $7,500 federal tax credit that was allowed to phase out under the Trump administration. And, it also provides a credit of up to $1,200 for home chargers, which can help make solar-powered EVs much more practical.
While battery storage and electric vehicles make your home solar array more valuable and useful, while reducing the time it takes to achieve “break-even” with the cost of solar vs grid power, that’s only the beginning of what the bill does.
By subsidizing other electrification projects around your home, a solar/storage system can do much, much more. Rebates for home electrification can help cover a significant portion of the cost of some systems that heat and cool homes. The rebate of up to $1,750 for heat pump water heaters would pay the full price of many models. Induction stoves get an $840 government subsidy, which covers around two-thirds of the price of several high-efficiency cooktops. A $4,000 investment allowance is available to homeowners who wish to update their electrical system, which is frequently required before solar or battery storage systems may be installed.
So, people will have a much easier time getting set up to not only have solar power, but get the absolute most from it that they can. Families making up to 150% of the median income in their area (which can vary considerably) get access to the rebates, with a maximum of $14,000 available.
Why This Matters A Whole Lot
Personally, this is going to be a big deal for my family. We live in a home with gas heat, a gas stove, and a janky old power connection that can barely support one EV charging at a relatively low L2 rate (on top of what the house needs). This has not only made it difficult to lower our carbon footprint as a household, but has also kept us from upgrading things like air conditioning.
I know that many American families are in the same spot, with homes built for a bygone era when burning up fossil fuels and paying for a trickle of electricity was perfectly OK. Now, it makes better sense to electrify homes for several reasons.
The first one is obviously cost. In the oppressive July heat near El Paso, our electric bill jumped to an alarming $410 (which I’d consider drinking after paying today, but all money that could have gone to alcohol went to feed the air conditioning). Jokes about alcoholism aside (I actually don’t drink much), it’s a bad spot to be in, especially with summer heat becoming something we can’t really joke about with all of the suffering and even death that it causes. Solar can help keep those costs under control and predictable for a family.
Another advantage to electrifying everything and going solar with storage is the better emergency preparedness that gives a family. The areas surrounding El Paso weren’t part of the most recent Texas freeze, but they were hit with the worst of the last freeze in 2011.
Not only was electricity a problem (the plants in El Paso weren’t designed for that kind of cold), but so many people were using natural gas that there just wasn’t enough to go around. This meant that most people couldn’t get heat in their homes unless they had some sort of backup, like a fireplace.
Solar with storage, heat pumps, and electrifying everything else would have given people a chance to have a few days worth of power. Even though it was cloudy, the rolling blackouts would have given people the opportunity to keep their batteries up for a lot longer and kept the cold from getting dangerous. Many other grid emergencies would also be successfully treated by solar and storage just like this one could have.
All of these advantages should be enough, and that’s before we even get to the environmental advantages of upgrading power, getting solar+storage, and electrifying “all the things.” Getting all power from the sun, using it for heating, cooling, cooking, and even transportation makes a big difference for not only that family’s carbon footprint, but does this without reducing quality of life. So, it’s a trade people should be willing to make.
The only thing that was holding this back from happening for most houses was the cost. With rebates, tax credits, and other aid to homeowners considering a move to solar, this helps alleviate that final barrier to action for them.
There is still one thing this doesn’t do: help non-homeowners electrify. While there are tax credits, there’s still a lot of personal expense in upgrading a property like this, and they’d benefit the renter more than the owner. This will lead to rental properties lagging behind and renters not being able to take advantage of this. But, this is still a huge step in the right direction.
Featured image by Vijay Govindan, CleanTechnica.
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