Helping lawmakers talk about the clean energy benefits of the Inflation Reduction Act and the Infrastructure Investments and Jobs Act.
Presented by Rewiring America and the League of Conservation Voters.
This toolkit seeks to equip federal and local policymakers with the tools necessary to educate constituents and stakeholders about the climate and clean energy investments in the Inflation Reduction Act and the Infrastructure Investment and Jobs Act. To maximize the opportunities to cut carbon pollution, save consumers money on energy bills, create quality jobs, and expand environmental justice, we all need to be educated about what these investments offer. We are committed to ensuring that families, school districts, businesses, and municipalities have the information they need to access the wide array of clean energy and transportation benefits contained in the affordable clean energy plan.
Content on this page is up-to-date as of August 1, 2024. Check the Google Doc above for additional and new content.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
Taken together, the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA) comprise an affordable clean energy plan. This creates a historic opportunity to shape our future by tackling the climate crisis and cutting pollution, rapidly expanding our clean economy, creating good union jobs, and investing in disadvantaged communities.
The affordable clean energy plan investments in the Inflation Reduction Act will help bring the U.S. 80% of the way toward reaching President Biden’s 2030 climate commitments. Further policy actions will take the country across the finish line.1President Biden’s climate action goal has been to reduce our nation’s carbon pollution by at least 50-52% by 2030 and achieve net-zero greenhouse gas emissions by 2050. As the largest clean energy investment America has ever made, the IRA will invest more than $369 billion (perhaps over $570 billion2Estimated Revenue Effects Of Division A, Title III Of H.R. 2811, The “Limit, Save, Grow Act Of 2023”. Joint Committee on Taxation, April 26, 2023. https://www.jct.gov/publications/2023/jcx-7-23/, https://www.cbo.gov/system/files/2023-04/59102-Arrington-Letter_LSG%20Act_4-25-2023.pdf) across the country in solar and wind farms; manufacturing batteries, electric vehicles, and other clean energy components; reducing pollution in environmental justice communities; rebuilding clean industry in places losing fossil fuel jobs; and ensuring the clean energy transition lifts up communities previously left behind while creating millions of family-supporting jobs. It also offers money to help you convert your household to run fully on electricity, backed by clean renewable energy. Programs available now and rolling out soon will help lower the cost of a new or used electric vehicle, install solar panels, and swap out your old, fossil-fueled appliances for new, clean electric alternatives.
You can use the money to modernize your machines: the cars you drive, how you heat the air and water in your home, cook your food, dry your clothes, and get your power. You can also use the money to install additional home energy improvements like solar panels, a home storage battery, and an upgraded electrical panel and wiring. Your neighborhood school, place of worship, or local non-profit could also tap into this financial support to make similar upgrades.
The affordable clean energy plan includes upfront discounts, money back on your taxes, and low-cost financing that you can use over the 10 years to electrify at the pace that works for you. See the specific ways you can benefit from the Inflation Reduction Act’s tax credits and upfront rebates in “Electrifying Your Home or Apartment”.
The affordable clean energy plan also invests in the infrastructure — including roads, bridges, rail, ports, electrical grids, and internet access — that keeps our country running. Specifically, these investments are housed in the Infrastructure Investment and Jobs Act.
Our current systems were constructed decades ago, and the U.S. has fallen behind other developed nations in updating infrastructure for reliability, efficiency, and safety. The Infrastructure Investment and Jobs Act will help modernize our infrastructure, which will lead to massive economic benefits, improvements in public health, and a vital surge in high-quality, family-supporting jobs.
For households across the country, some major benefits people will experience in their daily lives include cleaner water, cleaner air, better buses and trains, faster internet, reliable clean electricity, and improved access to electric vehicle charging. A new Grid Deployment Authority will build a modern and clean electric grid for the 21st century and many school and transit buses on our streets will be upgraded to electric, making important gains in cutting toxic air pollution.
Content on this page is up-to-date as of August 1, 2024. Check the Google Doc above for additional and new content.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
These two federal climate funding initiatives complement one another. The Inflation Reduction Act provides financial incentives to businesses, schools, non-profits, and households to generate clean energy, improve efficiency, and swap out old fossil fuel-based systems, vehicles, and appliances for new, healthier, electric alternatives. The Infrastructure, Investment and Jobs Act provides a huge, and sorely needed, investment to modernize the United States’ infrastructure. Some of the investments in these laws come through grant programs that ensure that federal funding is accessible and prioritizes disadvantaged communities for investment.
Combined, these massive investments are fostering the clean energy transition and building modern, efficient, and reliable infrastructure. These policies will help us generate clean energy to power our homes and transportation systems. Neighborhood by neighborhood, they’ll enable us to modernize our homes and schools, access solar energy, purchase clean, electric appliances, and transition to electric vehicles. The result will be a healthier climate and healthier communities.
See the next section on Justice40 — or J40 for short — an equity-centered effort that ensures funds from federal programs are used to invest in communities that have been historically disinvested in or neglected so that they are not left behind in the U.S. transition from polluting systems to clean electric ones.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
In January 2021, President Biden issued an executive order titled “Tackling the Climate Crisis at Home and Abroad.” It included several important climate initiatives including Justice40.3The 2021 Executive Order “Tackling the Climate Crisis at Home and Abroad,” also established the White House Office of Domestic Climate Policy, Civilian Climate Corps, and the White House Environmental Justice Advisory Council (WHEJAC).
Justice40 is an initiative where multiple government agencies and departments must work together with states to ensure at least 40 percent of the overall benefits from federal investments are directed to disadvantaged communities.4The working definition of “Disadvantaged Communities” is based on cumulative burden and includes data for 36 burden indicators collected at the census tract level, grouped by fossil fuel dependence, energy burden, environmental and climate hazards, and socio-economic vulnerabilities.
Federal agency programs covered by Justice40 fall into one or more of the following seven investment areas:
The initiative aims to begin addressing high levels of pollution, chronic disinvestment, and lack of access to funds in communities of color and low-income communities. This legacy of inequity has been driven by discriminatory environmental, housing, infrastructure, and economic policies. Learn more about the Justice40 Initiative here. Explore the White House and Council on Environmental Quality’s Climate and Economic Justice Screening Tool here to view census tracts that have been identified as overburdened and underserved.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
Since the Inflation Reduction Act was enacted in August of 2022, it has spurred $361 billion in private investments, largely in building clean energy and associated manufacturing, leading to over 312,900 new jobs. As a solar company leader remarked: “We will always look at the history of our industry in two eras now … [before and after] the Inflation Reduction Act.”
The impact is powerful and widespread. These investments and new jobs are being created all around the country, in 41 states — red, blue, purple — and counting. The IRA is projected to create more than 9 million new, family-supporting jobs over the next decade. The U.S. Department of Energy has been tracking these new clean energy jobs. What’s more, these jobs cannot be offshored or outsourced to other countries. We’ll need tens of thousands, if not hundreds of thousands, of new electricians and HVAC (heating, cooling, and ventilation) technicians as well as manufacturing workers in EV, solar, and other clean energy industries. The economic engine of this century is just getting started.
Finally, the affordable clean energy plan is specifically designed to bring manufacturing supply chains back to the U.S., so that our nation receives the economic benefits of creating and delivering products from start to finish. Not only does this help with job security and economic revival but it will help the U.S. achieve energy independence. Reducing our reliance on pricey and unpredictable energy sources like oil and gas means lessening our dependence on anti-democratic forces in rich fossil-fuel exporting countries. As the largest clean energy investment in our history—the plan has put the U.S. back in the (EV) driver’s seat, ready to lead the world in the clean energy transition.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
Replacing polluting gas, propane, or fuel oil furnaces with clean, electric heat pumps is the best thing you can do to reduce the climate impact of your home and lower your bills. Heat pumps are three to five times more efficient than furnaces, using heat extraction and compression technology, and don’t burn fossil fuels to create heat. Today’s heat pumps even work well in sub-zero winter temperatures, making them an increasingly popular option in cold climates.
Despite their name, heat pumps don’t just heat – they also cool, meaning you can replace both your gas furnace and existing air conditioner with a single, more efficient, heat pump. In an era of growing heat waves, heat pumps are a great option for those in traditionally milder climates seeking air conditioning for the first time. If you’re adding a heat pump, weatherization upgrades such as adding insulation or sealing windows will allow you to keep your home at a comfortable temperature even more efficiently.
You can also electrify your water heating, your clothes drying, and your cooking, and use the money you’ll get back on your federal taxes—in addition to direct discounts for middle-income families—to lower the cost of making the switch. While older electric stoves also don’t burn fossil fuels inside your home, modern, electric induction stoves are even better, offering quicker heating and more control.
These upgrades to better electric appliances will save on energy costs in most cases. Rewiring America has an incentives calculator that will provide information and resources on state, local, and utility incentives for these home upgrades.
If you don’t know where to start, you might consider getting an energy audit from a building professional who can detail which appliances and energy upgrades can deliver the best long-term savings, comfort, and healthier indoor air (see the section below on the tax credit for home energy audits). If you know which of your appliances are older or failing, look for recommendations for efficient, electric replacements (e.g. heat pumps), and talk to contractors in your area about the smartest way to do the work. Not all contractors are experts in electric appliances, so finding some options and getting a few quotes is a great first step. Rewiring America has a helpful contractor network tool for households: simply enter your zip code and project, and the tool will provide lists of contractors that have been independently qualified by the network.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
The federal clean energy tax credits work by reducing the money you owe on your federal taxes. Read on to learn how you can receive federal tax credits when you invest in energy efficient home improvements, rooftop solar, a new or used electric vehicle (EV), an EV charger, and more.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
The IRA also provides funding for states, tribes, and territories to create upfront discount programs on home efficiency upgrades and electric appliances. These two Home Energy Rebates programs are called the Home Efficiency Rebates (HER) and Home Electrification and Appliance (HEAR) programs respectively.
States, territories, and tribal governments have the authority to determine how to utilize rebate program resources. Programs may vary significantly in who is eligible, what projects are covered, what building types are supported, when the rebates are available, and how people can claim rebates. In addition, some states are designing their programs to supplement existing rebates so that households can “stack” benefits, enabling them to make more improvements and capture more cost savings.
Before a state can launch its Inflation Reduction Act Home Energy Rebate Program, it is required to submit an implementation blueprint to the U.S. Department of Energy (territories and tribal governments must do the same). These implementation blueprints must include, among other things, a Community Benefits Plan, Education and Outreach Strategy, and a Consumer Protection Plan. These documents outline specific details around rebate program implementation.
Several states started up these programs in 2024, and many more will launch in 2025. See DOE’s rebate rollout tracker here to see the status of your state program. The Department of Energy Home Energy Rebates fact sheet provides helpful information and resources. Rewiring America’s incentives calculator provides customized information about what benefits you are eligible for and will be continually updated to include states’ rebate program information.
Here is more information about the federal benefits that states will incorporate into their program design:
Note that you can’t combine Efficiency Rebates with Electrification Rebates for the same upgrade, but you can use both programs for different upgrades in a single project. Learn more about the Home Energy Rebate Programs including all the latest program guidance from DOE here.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
The affordable clean energy plan’s investments in our homes and infrastructure can help individuals and families in all zip codes cut down on their energy bills, improve indoor and outdoor air quality, and modernize the technologies we use every day to help curb climate change.
In addition to saving money annually, going fully electric in our homes can shield the economy from energy price spikes and help combat inflation.
The Inflation Reduction Act is a remarkable achievement projected to position the U.S. to reach 80% of our 2030 climate target. The climate provisions of the Infrastructure Investments and Jobs Act will result in additional progress.
Figure 1 shows state-by-state how much the average household would save annually on their utility bills if they switched from electric resistance heating to an electric heat pump. The large number represents the dollar amount of savings and the smaller number at the bottom right corner represents the percentage of the state that uses electric resistance heating, thus, the percentage of the state that could expect this kind of savings.
Figure 2 shows state-by-state how much the average household would save annually on their utility bills if they switched from propane or fuel oil heating (also known as “delivered fuels”) to an electric heat pump. The large number represents the dollar amount of savings and the smaller number at the bottom right corner represents the percentage of the state that uses propane and fuel oil heating, thus, the percentage of the state that could expect these kinds of savings.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
In the United States, the transportation sector accounts for 28% of carbon pollution — representing the single largest source of climate-warming emissions in the country. The clean vehicle incentives and programs coupled with the incredible investments in building out the nation’s electric grid and charging infrastructure put us on track to decarbonize our mobility systems, reduce pollution in our communities, and meet our national climate goals.
Some of the affordable clean energy plan’s most talked about benefits will save most car-buyers (depending on income) up to $7,500 on the purchase of a new electric vehicle (EV) and up to $4,000 on the purchase of a used electric vehicle. You can also reduce or get money back on your taxes for battery storage systems and dedicated EV chargers that will let you charge your electric vehicle up to 3 times faster than using a standard outlet. (Find out if your community qualifies by using the U.S. Department of Energy’s 30C Tax Credit Eligibility Locator.)
For many people, the switch to electric vehicles has been hindered by no EV charging access or installation opportunities where they live, or unreasonable detours and intense trip planning for long trips or commutes. Fortunately, Congress provided $7 billion of funding for more charging stations nationwide. Through corridor and community charging grant programs, EV charging infrastructure will be available not only along busy highways, but also in places like public parking garages, multifamily buildings and grocery store parking lots, and public parks (updated information here). Ohio, New York, Pennsylvania, and other states have opened their first NEVI-funded charging stations to the public. There are now more than 188,000 public charging ports across the country, with an average of 900 new chargers opening each week.
You may also be able to install an EV charger at your home using the tax incentives (see “Electrifying Your Home or Apartment“), petition your workplace to install faster chargers (called Level 2 or 3 DC fast chargers), and ask your landlord or housing association to provide charging for residents. (These tax incentives are also available for the first time to non-profit groups, tribal and municipal governments, and other entities — see “Schools, Community Centers and Local Government”.)
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
The Infrastructure Investment and Jobs Act provided up to $108 billion in much-needed support for public transportation systems across the country. First and foremost, the public transit provisions require that all new projects center investments and create jobs in disadvantaged communities. Specifically, projects that electrify and expand transit services in disadvantaged communities are prioritized for funding. The plan also includes funding for technical assistance and capacity building in these communities. In July 2024, the Biden-Harris administration announced another $1.5B in grants to replace old polluting transit buses with cleaner alternatives, including electric buses, which can also save agencies on the cost of operating the buses while cleaning up communities’ air.
These public transit investments also encourage municipalities to develop affordable housing near new transit facilities — this helps to ensure that communities that have been separated by highways and damaged by redlining (discriminatory practices that increase pollution in disadvantaged communities) can have access to safe, affordable transportation and housing options. In addition to connecting communities, the clean energy initiative provides funds for the development of commuter rail projects. This helps to reduce dependence on vehicles for those traveling to urban areas for work.
Support for public transit in the affordable clean energy plan goes beyond subways and buses – it focuses on micromobility, too. This is the idea that bikes, e-scooters, and pedestrian paths can help to supplement other forms of transportation. Fortunately, the infrastructure law includes $7.2 billion in formula funds to develop micromobility options.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
The U.S. Environmental Protection Agency’s (EPA) Clean School Bus Program launched in 2022 and will distribute $5 billion over 5 years to replace polluting buses with electric school buses. Propane and compressed natural gas buses are also eligible for some support, but to maximize carbon pollution reduction and reduce exposure to harmful toxins, all-electric buses are best for school children and the communities buses drive through. The program prioritizes funding for low-income, rural, and tribal school districts. The EPA aims to distribute at least $1 billion each year through 2026 in the form of grants and rebates.
Since opening in 2022, the EPA Clean School Bus Program has awarded nearly $3 billion for almost 8,500 new school buses at over 1,000 school districts through three rounds of funding (a mix of upfront rebates and grants). Applicants from 50 states and multiple tribes and territories have submitted nearly $8 billion in funding requests, with the overwhelming majority requesting electric school buses.
The program is expected to open another rebate opportunity in the later part of 2024. Here is more information on EPA’s clean school bus program.
The EPA’s Clean School Bus Program funds can be paired with IRA tax credits newly available to tax-exempt entities like school districts, thanks to a new process called elective payment. Under elective payment, by filing some forms with the IRS, tax-exempt entities that make qualifying investments will receive a check reimbursement or direct payment equal to the value of the tax credit they are claiming. Starting in 2023, school districts can receive up to $40,000 for buying an electric school bus and up to $100,000 for installing its charging station, if the charger is placed in a low-income or non-urban community. These credits are non-competitive and there is no limit on the number of credits that can be claimed.
Together, these federal investments are lowering the total cost of electric school buses and transforming how millions of children get to school.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
The Inflation Reduction Act introduced and expanded tax credits for a wide array of clean energy technologies, providing unprecedented opportunities over the next decade. In addition to providing incentives to spur private-sector investment, this affordable clean energy plan includes game-changing new provisions that will enable tax-exempt and governmental entities—such as states, local governments, tribes, territories, rural electric cooperatives, and nonprofits including places of worship, to take an active role in building the clean energy economy, lowering costs for working families, and advancing environmental justice.
Thanks to the Inflation Reduction Act’s “direct pay” provisions (also known as “elective pay”), tax-exempt and governmental entities will now be able to receive a payment equal to the full value of tax credits for qualifying clean energy projects. Unlike competitive grant and loan programs in which some applicants may not receive an award, direct pay allows entities to get their payment if they meet the requirements for both direct pay and the underlying tax credit. For more information about using direct pay on projects that are receiving grants and forgivable loans, click here.
Applicable entities can use direct or elective pay for 12 of the clean energy tax credits, including for generating clean electricity through solar, wind, and battery storage projects; building community solar projects that bring clean energy to neighborhood families; installing electric vehicle (EV) charging infrastructure; and purchasing clean vehicles for state, city, or school vehicle fleets. To get started, register with the IRS or check out their FAQ.
K-12 Schools and colleges and universities are central parts of many communities across the U.S. They are also major consumers of electricity and gas.
For many local governments, K-12 schools represent one of their larger, if not the largest of, budgetary investments. For the first time, school districts can tap into clean energy tax incentives through new direct pay opportunities, as well as other new or expanded grant and loan programs, from the federal clean energy plan. Transitioning school buildings and buses to clean energy enables school districts to save money that they can reinvest in students and classrooms. Many school districts around the country are already embracing this transition. The direct or elective pay opportunities in the Affordable Clean Energy Plan will enable K-12 school districts to speed their clean energy transition.
The same holds true for colleges and universities. Because they are often housed on larger tracts of land, in many cases they are able to generate energy through larger clean energy installations, like solar arrays, in addition to transitioning their buildings and fleets to clean energy. Like K-12 school districts, they stand to benefit a great deal from taking advantage of direct pay opportunities.
The affordable clean energy plan provides a lot of new grant support and, for the first time, provides tax incentives to enable school districts and institutions of higher learning to scale renewable energy–including solar and geothermal–to power their buildings and to expand energy efficiency. Cutting the use of fossil fuels to power our nation’s K-12 schools and colleges through investments in rooftop solar, geothermal heat pumps, battery storage and more teaches students about these essential climate solutions in a tangible, hands-on way.
Diesel school buses pollute the air in neighborhoods and harm the lungs of millions of school children riding to and from school, affecting their attendance and school performance. Diesel and engine maintenance pose significant costs to school districts and school bus operators. The federal clean energy plan provides a variety of new and expanded tax incentives and grants to local and tribal governments that encourage the transition to zero-emissions school buses. This will help improve air quality for students riding buses, and enable schools to reap the financial benefits of electric school buses, which are cheaper to operate and maintain over their lifetimes. Electric school buses can also be integrated into local grids to assist utilities in providing energy storage and quick response electricity capacity when the buses are not being used to transport students.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
State and local governments will play an integral role in ensuring projects that expand access to clean renewable energy take root and deliver cost savings and air pollution reductions to those who most need the help. Not only do local governments have the opportunity to directly receive funding to create renewable energy projects for their residents through initiatives like community solar, but they also have the opportunity to receive grant awards for establishing new efficient building codes to reduce carbon emissions in new construction projects, and to receive funding for air pollution monitoring systems. Municipalities are also going to have the chance to apply for funding to transition to renewable energy and create the much-needed electrical vehicle charging infrastructure we will need as we shift to zero tailpipe emissions cars and trucks. Also, governmental entities will now be able to receive a payment equal to the full value of tax credits for qualifying clean energy projects through “direct pay” provisions (also known as “elective pay”); register here with the IRS.
To ensure that local governments with fewer resources and staffing are informed of elective pay opportunities, the Department of the Treasury has identified 150 Comeback Communities from across the country that are characterized by high poverty and population decline for targeted outreach and education. The Treasury Department is meeting with leaders of these cities to provide essential information about how elective pay resources can benefit their communities.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
In many communities across the country, non-profit organizations are the lifeblood of the community and provide needed services. Some of these nonprofits build affordable housing, provide transportation for senior citizens, or assist with job training and placement. Thanks to the provisions in the affordable clean energy plan, for the first time, these organizations are eligible to receive tax credits as direct payments, known as elective or direct pay, so they can better afford to take on needed projects and perhaps even expand or enhance their services. Non-profit groups that build affordable homes can now receive money back for adding solar panels and heat pumps to those homes. Faith-based institutions delivering food to the elderly or homeless can now get money back if they purchase electric vehicles to deliver those meals. By allowing non-profits to apply for grant programs and receive the tax credits as direct payments, they can not only expand their programs but also multiply their effectiveness, all while decreasing overall costs to run their programs while combating the climate crisis and reducing air pollution. Register here with the IRS.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
A hallmark of American ingenuity involves harnessing our entrepreneurial spirit. Thanks to the Affordable Clean Energy Plan, the opportunities to secure energy independence and encourage up-and-coming entrepreneurs are plentiful. Tax credits that will help establish more efficient buildings and manufacturing processes will not only help reduce carbon emissions but will reduce operational costs for businesses in the country. Additionally, the clean energy incentives create pathways for the United States to onshore and secure the supply chains needed to build out new clean renewable energy infrastructure.
Energy Efficiency Upgrades – Tax Deduction of up to $5 per square foot (179D)
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
Commercial Clean Vehicles – Tax Credit up to $40,000 for a large vehicle (45W)
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
Clean Electricity Investment Tax Credit – up to 70% of installation costs (48)
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
Clean Energy Production Tax Credit – up to $33 per MWh (45)
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
Rural Energy for America Program (REAP) – Loans and grants for renewable energy and energy efficiency
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
EV Charging – Tax Credit of up to $100,000 per charging facility (30C)
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
Advanced Energy Projects – Capped Tax Credit (48C)
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
Clean Energy Financing – Loans and Loan Guarantees
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
Replace Energy Infrastructure — Loan Guarantees
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
Everyone can play a role in ensuring that the historic benefits and resources offered by the Affordable Clean Energy Plan — the climate and energy provisions from the Inflation Reduction Act and Infrastructure Investment and Jobs Act — are used to transform our homes, transportation systems, and communities. If we fully implement these federal investments, we’ll cut the carbon pollution fueling the climate crisis, create millions of jobs, and expand environmental justice. We can do all this while reducing our energy bills.
Spread the Word:
Interested in making sure that local communities, municipalities, schools, or places of worship are aware of how the Inflation Reduction Act and the Infrastructure Investment and Jobs Act can help them transition to clean energy and save money? These talking points can help.
DO: Talk about the ways the Affordable Clean Energy Plan is bringing benefits to your state or district right now, and on an ongoing basis. Get specific when possible, and tell your community’s stories.
DO: Emphasize the benefits of clean energy that people already believe in—less pollution, better health, and energy independence. Also, talk up grid upgrades and job creation—which people like, but don’t immediately believe are happening.
DO: Emphasize the affordability of a clean energy future, and use specific examples of cost savings when possible.
DO: Make it personal. Tell your story of how you are (or want to be) taking advantage of the affordable clean energy plan to improve your home and/or community.
AVOID: Using the acronym “IRA” or “IIJA” without also explaining what the affordable clean energy plan is and does. In fact, lead with the “Affordable Clean Energy Plan” when talking about these investments as this most accurately describes these investments.
If you’re a homeowner or a renter and would like to better understand how your household can benefit from the Inflation Reduction Act, Rewiring America has an IRA Savings Calculator that can determine what benefits you qualify for and how much money you’re eligible to save. Rewiring America has a dedicated guide for renters to electrify their homes and help push for the transition toward building electrification.
For additional information, see the Electrify Everything in Your Home Guide. In each chapter, you’ll find information about the different choices you have for your electric appliances, tips on getting started, questions you can ask contractors, suggestions for running the appliance efficiently, and links to find more helpful details.
Rewiring America’s Go Electric Guide includes everything you need to know about IRA incentives and electric equipment. It also offers a checklist to help you build your own electrification plan and case studies so you can see what happens when a household like yours decides to tap into these incentives. Additionally, there is a Rewiring America tool to help you find contractors that have been independently qualified through a network. All you need is to enter your zip code and the project you’re seeking a contractor for!
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
PlanetED published a helpful guide outlining how K-12 schools can take advantage of the direct or elective pay resources in the Affordable Clean Energy Plan. In addition, they—along with Second Nature and MIT—published a similar and comprehensive guide focused on how institutions of higher learning can benefit.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
If you’re interested in exploring how your community could benefit from the Justice40 program (a federal initiative to ensure that at least 40 percent of the overall benefits of overall investments in IRA and other programs are directed to disadvantaged communities), reach out to your state and local elected officials and state agencies to ask about their plans to apply for or implement Justice40 program funding and to urge them to use the funds in ways that maximize benefits to communities. The affordable clean energy plan presents an unprecedented opportunity to expand clean energy and transportation in all of our communities.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
The climate and clean energy investments in the Inflation Reduction Act and the Infrastructure Investment and Jobs Act are already helping cut carbon pollution, create local jobs, and expand environmental justice. If you’re interested in learning about investments that are already happening in your community or state, you can visit the interactive map at Invest.gov to view ongoing projects funded by the Affordable Clean Energy Plan (the clean energy and climate investments in IRA and IIJA). It also highlights private sector investments that are leveraging other federal investments to create jobs and manufacture the components of the future here.
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
Carry Forward refers to the ability to “carry forward” the value of a tax credit to future years if you cannot use the full tax credit value in one year. The 25D Residential Clean Energy tax credit carries forward but not the 25C Residential Energy Efficiency credit.
Direct Pay or Elective Pay, in the context of the Inflation Reduction Act, means tax-exempt entities can claim the equivalent amount of a tax credit in the form of a direct payment from the IRS. Direct pay applies to commercial tax credits in IRA programs, not consumer tax credits. If you are a non-taxable or governmental entity, you can register here with IRS to receive elective pay on qualified projects.
Income Limits refer to eligibility based on a set amount of income as a factor. The electric vehicle (EV) tax credits and electrification rebates under the Inflation Reduction Act are subject to income limits.
Non-taxable Entities refers to organizations that are exempt from paying federal and state taxes. This includes religious organizations, educational institutions, and charitable organizations. Other examples of non-taxable entities include cooperatives such as rural electric cooperatives, municipal utilities, and Tribal organizations. These organizations can use direct pay for 12 of the Inflation Reduction Act’s tax credits, including for generating clean electricity through solar, wind, and battery storage projects; building community solar projects that bring clean energy to neighborhood families; installing electric vehicle (EV) charging infrastructure; and purchasing clean vehicles for state, city, or school vehicle fleets.
Point-of-Sale Rebate gives you that cash back when you make the purchase, effectively reducing the cost of the item purchased as opposed to a coupon that you submit and are reimbursed for later on. IRA consumer rebates are point-of-sale rebates.
Rebates are upfront discounts that give cash back, typically more quickly than a tax credit.
Retroactive means taking effect from a time in the past.
Non-Attainment Areas are areas of the country where air pollution levels persistently exceed the national ambient air quality standards.
Non-Refundability indicates that a taxpayer claiming the credit can only use it to reduce or eliminate their tax liability and will not receive a tax refund for any amount that exceeds their liability for the year. Neither 25C nor 25D consumer credits are refundable.
Tax Credits are provisions that reduce a taxpayer’s final tax bill, dollar-for-dollar. A tax credit differs from deductions and exemptions, which reduce taxable income, rather than the taxpayer’s tax bill directly.
Tax Deductions are an amount that one can subtract from their taxable income to lower the amount of taxes owed.
Tax Liability refers to the payment owed by anyone to a government authority. Under the Inflation Reduction Act, the amount of one’s tax liability determines whether or not they are eligible for consumer tax credits.
Tax Credit Transferability allows project owners to transfer tax credits to other taxpayers and receive cash in return.
Withholding refers to the amount of income withheld and submitted to the government directly, usually by an employer. Withholding amounts are not too important to understanding Inflation Reduction Act programs and their applicability, but should not be confused with tax liability.
Presented by the League of Conservation Voters and Rewiring America
The information on this page is not intended as legal or tax advice for specific individuals or organizations or actual determination of eligibility for tax credits and/or deductions of any particular project or activity. Please visit the IRS website for more information on tax credits and deductions under the Inflation Reduction Act of 2022, and you may choose to consult with a tax advisor.
President Biden’s climate action goal has been to reduce our nation’s carbon pollution by at least 50-52% by 2030 and achieve net-zero greenhouse gas emissions by 2050.
Estimated Revenue Effects Of Division A, Title III Of H.R. 2811, The “Limit, Save, Grow Act Of 2023”. Joint Committee on Taxation, April 26, 2023. https://www.jct.gov/publications/2023/jcx-7-23/, https://www.cbo.gov/system/files/2023-04/59102-Arrington-Letter_LSG%20Act_4-25-2023.pdf
The 2021 Executive Order “Tackling the Climate Crisis at Home and Abroad,” also established the White House Office of Domestic Climate Policy, Civilian Climate Corps, and the White House Environmental Justice Advisory Council (WHEJAC).
The working definition of “Disadvantaged Communities” is based on cumulative burden and includes data for 36 burden indicators collected at the census tract level, grouped by fossil fuel dependence, energy burden, environmental and climate hazards, and socio-economic vulnerabilities.
Defined as earning less than 80 percent of their Area Median Income
Defined as earning between 80 and 150 percent of their Area Median Income
Tax Deductions are an amount that one can subtract from their taxable income to lower the amount of taxes owed.
Grants and loan guarantees can also be combined to provide funding up to 75% of total eligible project costs.