The New Climate Bill’s Secret Weapon? Tax Credits

On Wednesday, Democrats in the United States Senate announced they’d finally come to an agreement on a major climate bill, tucked inside the Inflation Reduction Act of 2022. It would allocate $369 billion toward energy security and climate action, juice domestic manufacturing of clean energy technologies like wind and solar power, steel communities against climate change, and prepare American agriculture for extreme heat, among many other campaigns.

Consumers, too, could benefit if this bill passes: It includes 10 years of tax credits to install all kinds of clean residential technologies, from rooftop solar to heat pumps. (Climate nerds love electric heat pumps, which extract heat from outdoor air, then reverse in the summer to cool like an air conditioner.) The bill would provide $9 billion in rebates for low-income Americans to switch to electric appliances and retrofit their homes to be more energy efficient, and give people a $7,500 tax credit for buying a new electric vehicle.