The law passed by Congress in 2022 to promote the transition away from fossil fuels contained far more carrots than sticks–and Americans are gobbling them up.
The statute, called the Inflation Reduction Act, provides tax credits and other benefits for a wide range of actions that citizens and businesses can take to fight climate change. The five most popular credits during the first year were for solar panels, insulation or air sealing, exterior windows and skylights, exterior doors, and central air conditioners.
More than 3 million American households used the act’s subsidies for homeowners last year, collectively saving more than $8 billion, according to an August 7 report by the U.S. Treasury Department. It was the first detailed snapshot of how these more benefits were used in their first full year, by whom and where. The department called the $8 billion a “significant” number that is higher than initially expected, Nadja Popovich reported in The New York Times..
The bulk of the money, more than $6 billion, helped households install rooftop solar panels, small wind turbines and other renewable energy systems. These credits were most popular in sunny states, including much of the Southwest and Florida.
While those are encouraging numbers for tax credits, of the more than 137 million tax returns the government had processed by late May, some 3.4 million of them — or approximately 2.5 percent — took advantage of at least one of these two subsidies. That’s about 30 percent more people than used similar, though less generous tax credits in 2021, but it means that the vast majority of taxpayers are not participating.
Many experts believe that more taxpayers should be taking advantage of these opportunities. So a nonprofit group, Civic Nation, is launching a "Save on Clean Energy" campaign to educate Americans about the law. Civic Nation’s campaign involves more than 40 groups and messengers, including United Way, Carrier, Sunrun, the League of Conservation Voters, and a bipartisan group of mayors from around the country. The U.S. Department of Energy is also involved.
The intent is to help spread the word through trusted local messengers such as schools and community-based organizations. “It can't just be, you know, press releases,” Civic Nation CEO Kyle Lierman told Axios. “It has to be a kind of surround sound campaign, where folks are hearing about how they can take advantage of these opportunities on their phones when they read the news, but also at their churches, at the supermarket, at the door."
President Biden's top climate diplomat, John Podesta, who is overseeing the rollout of the IRA's clean energy provisions, considers the Civic Nation partnership a new effort in the energy space, whose goal is to make it clear to people that not only are energy rebates available, but also to show them how to complete the process by listing nearby contractors, for example. "Some of this is a lack of general awareness that these general programs are available," he said, but some is also a question of ‘What does it mean for you?’"