Important Stats On The Inflation Reduction Law

What the new law does, and what it means, by the numbers

Topline Benefits

The Inflation Reduction Law will…

• Help cut household energy costs by over $1,000 a year

• Help fight inflation by lowering costs for families. Over 126 economists agree

• Create 1.5 million new jobs

• Reduce the deficit by around $300 billion over a decade

• Prevent $1.9 trillion in costs associated with the impacts of climate change

• Make big corporations and the ultra-wealthy pay their fair share in taxes 

• Protect families making under $400,000 from tax increases

Clean Energy

Out of the $369 billion allocated to climate and energy in the Inflation Reduction Law, nearly $280 billion goes towards clean energy tax incentives. These clean energy investments will…

• Put us on track to reduce emissions by around 40% from 2005 levels

• Lead to the installation of 

  • 950 million solar panels

  • 120,000 wind turbines

  • 2,300 grid-scale battery plants

• The Solar market is projected to triple in size over the next five years due to tax credits from the Inflation Reduction Act. 

  • New report from Solar Energy Industries Association and Wood Mackenzie predict total solar installations will grow to 336 GW in five years.

  • Ten year extension of tax credits in the Inflation Reduction Act provides long-term certainty for solar investments. 

• The IRA will reduce the solar levelized cost of electricity by 20-35% in 2030 than business as usual scenarios.

• The IRA will reduce the wind levelized cost of electricity by 38-49% lower in 2030 than business as usual scenarios.

• The IRA is projected to lead to over $1.7 trillion in combined public and private sector spending in the next ten years. 

  • Expanded tax credits will lower prices of U.S. wind and solar to less than $5 per megawatt-hour.

Home Energy Efficiency

The Inflation Reduction Law greatly expands tax incentives and rebates for making homes more energy efficient. This means that homeowners can take advantage of…

• Up to $14,000 in rebates for home energy improvements, including…

  • Up to $8,000 for a heat pump

  • Up to $1,750 for an electric water heater

  • Up to $840 for an electric cooktop

• As much as $350 a year in future energy savings from installing energy efficient appliances

• The law allows homeowners to receive a tax credit of 30% the cost of home energy efficiency improvements for up to $1,200 a year.

• Homeowners can claim a federal tax credit of 30% off home renewable energy investments, including rooftop solar, geothermal heat pumps, and battery storage. 

Manufacturing

The Inflation Reduction Law includes incentives & support for manufacturing a wide range of clean energy and energy efficient products here in the United States, including…

• $50 billion in manufacturing tax incentives to boost domestic production of solar panels, wind turbines, batteries, and battery minerals

• $500 million to turbocharge manufacturing of energy-efficient technologies such as heat pumps under the Defense Production Act

• A 30% tax Advanced Energy Project tax credit for investments in projects that re-tool domestic manufacturing plants to produce clean energy technology

• $2 billion in grants and $20 billion in loans to build or convert electric vehicle manufacturing facilities

Rural Benefits

• New direct-pay provisions in the Inflation Reduction Act allow co-ops, municipalities, and non-profit utilities to receive payments for investing in or producing renewable power

  • According to U.S. Secretary of Agriculture Tom VIlsack, direct pay provisions will create jobs in clean energy and lower utility costs for rural Americans. 

Small Businesses

The Inflation Reduction Law includes incentives & support for small businesses looking to save on their day-to-day operating costs by making low-cost clean energy available and accessible to more small businesses. Thanks to the Inflation Reduction Law, small business owners can take advantage of…

• Up to $5 per square foot in tax deductions to support energy efficiency improvements that lower utility bills in commercial buildings

• Up to a 30% tax credit on the costs of installing solar panels

• Up to a $7,500 tax credit on the cost of purchasing light duty clean trucks and vans for commercial fleets

• Up to a $40,000 tax credit on the cost of purchasing clean heavy-duty semi trucks

Electric Vehicles

The Inflation Reduction Law includes tax credits on new electric vehicles made here in North America and on used electric vehicles to help make the switch to cheap electric driving more accessible to all. This means that drivers can benefit from…

• Up to a $7,500 tax credit for new electric vehicles made in North America with battery components sourced at home or from responsible trading partners

• Up to a $4,000 tax credit on affordable used electric vehicles

• More than $950 a year ($14,500 over 15 years) in overall savings by switching to an electric vehicle

• EV tax credits from the Inflation Reduction Act are bringing production from Asia to the U.S.

  • Hyundai and Kia are moving production to the U.S. so they are not excluded from expanded EV tax credits under the IRA. 

Clean Air

By ramping up the transition to more clean sources of energy, the Inflation Reduction Law will help reduce toxic pollutants from power plants and automobiles. By 2030, reductions in air pollution will…

• Prevent 3,700 to 3,900 premature deaths*

• Prevent 99,000 to 100,000 asthma attacks

• Avoid 405,000 to 417,000  lost workdays

*Avoided deaths are concentrated in communities of color, which have historically experienced the most harm from air pollution

The law also includes a methane emissions reduction program that will…

• Provide $1.55 billion in loans, rebates, contracts, and grants to help businesses monitor and reduce methane emissions and to help address legacy pollution from the oil and gas sector

• Make polluters pay by setting a fee on methane pollution at $900 per ton in 2024 and rise to $1,500 in 2026 to hold fossil fuel companies accountable for excess emissions

Environmental Justice

The Inflation Reduction Law prioritizes investments in communities who have been hit the hardest by the climate crisis and by fossil fuel polluters. While oil and gas lobbyists demanded major concessions in the bill, there are also significant investments that will begin to serve as a long overdue answer on the path toward justice. The Inflation Reduction Law includes…

• $3 billion for the Environmental and Climate Justice Block Grants to reduce pollution and climate risks through community-led projects in disadvantaged communities

• $3 billion for the Neighborhood Access and Equity Grants to improve transportation access for neighborhoods cut apart by highways

• $3 billion for grants to reduce air pollution at ports

• $1 billion for clean heavy-duty vehicles, like school and transit buses and garbage trucks

• $272.5 million to Native communities for climate resilience and adaptation, including drought mitigation programs and fish hatcheries

• $150 million for Tribal home electrification

• $75 million for loans to Tribes for energy development