The Inflation Reduction Act of 2022 was signed into law by President Joe Biden on August 16. As the most significant green legislation in recent U.S. history, it addresses climate change and strengthens energy security.
This new law contains billions of dollars of funds to lower costs for families, fight climate change, lower the deficit, and ask the biggest corporations to pay their fair share to the government. This policy would push Americans away from fossil fuels, and penalize fossil fuel companies for excess emissions if implemented effectively.
Here are the 5 main provisions that you need to know about the Inflation Reduction Act:
➡ Price reform for prescription drugs: The Inflation Reduction Act includes a provision allowing Medicare to negotiate drug prices, lowering the costs beneficiaries will incur for their medications.
➡ Subsidy extension under the Affordable Care Act (ACA): The federal government currently subsidizes medical insurance premiums under the ACA. They are being extended through 2025, which was originally set to expire at the end of this year. The U.S. Department of Health and Human Services noted that approximately 3 million Americans could lose their health insurance if these subsidies aren’t extended.
➡ Increasing the corporate minimum tax rate to 15%: A 15% tax rate will be implemented for corporations with a minimum income of $1 billion.
➡ Enforcement of IRS taxes: The IRS has been warning for years that it is underfunded and cannot meet its obligations. A 10-year investment is made in the nation’s tax agency.
➡ Investments in energy security and climate change: The bill includes a variety of climate-protection investments, including household tax credits, clean energy investments, and credits for reducing carbon emissions.
HVAC Upgrades Eligible for Incentives Under the Inflation Reduction Act
Several provisions of the Inflation Reduction Act are designed to incentivize homeowners to improve their energy-efficient homes. This includes the installation of highly efficient HVAC and water heating equipment.
Heat pumps qualify for the largest credits and rebates. It replaces your furnace and air conditioner with a high-efficiency system. By pairing a heat pump with cleaner electricity sources, you can control the temperature indoors more sustainably. While older heat pumps struggled with cold climates, many of the latest models are capable of working in extreme temperatures.
LOWER ENERGY COSTS: The Inflation Reduction Act will make it more affordable for California families to purchase energy-efficient appliances when they need to, make repairs around their homes, and save money on their utility bills each month, through:
➡ Rebates covering 50-100% of the cost of installing new electric appliances, including super-efficient heat pumps, water heaters, clothes dryers, stoves, and ovens. In California, millions of low- and moderate-income households are eligible for rebates.
➡ Rebates for households to make repairs and improvements in single-family and multi-family homes to increase energy efficiency.
➡ Tax credits cover 30% of the costs to install solar panels and battery storage systems, make home improvements that reduce energy leakage, or upgrade heating and cooling equipment. No income limits apply. For solar, uptake projections estimate that over 930,000 additional California households will install rooftop panels as a result.
➡ Tax credits covering 30% of the costs of community solar projects—owned by local businesses that sign up families to save on their electric bills—with additional bonus credits of 20% for projects at affordable housing properties and 10% for projects in low-income communities.
If you’ve been experiencing constant repairs that no longer keep your system working properly and prove to be a waste of your money, then we recommend replacing your AC.
With government provisions to incentivize you to make energy-efficient upgrades, now is the perfect time to convert to heat pumps for your home.
Equipment tax credits and rebates are available for heat pumps. ENERGY STAR-certified heat pumps with a SEER over 16 meet the eligibility requirements for a $300 tax credit, including high-efficiency furnaces at 95% and insulation.
Heat pumps powered by renewable energy produce zero emissions, making this a better alternative to make your home energy-efficient in the long run. Not only is it more sustainable, but a new system produces better air quality, reduces energy bills, and solves inconsistent airflow problems.
Convert to clean, non-polluting heat pump systems and get up to $2,000 in conversion incentives, or a 0% *financing offer for up to 12 months towards a full HVAC system.
Visit https://bit.ly/pacificaire_acreplacement or call us at 805-737-2564 to switch to an energy-efficient heat pump for your home.
