TL/DR –
The law signed by President Donald Trump on July 4, known as the “one big beautiful bill”, is expected to disrupt various facets of American life, including climate policy. The legislation significantly rolls back policies in industries like renewable energy, hindering the nation’s efforts to reduce greenhouse gas emissions and potentially impacting consumers’ finances. The 2022 Inflation Reduction Act, which previously provided tax credits for climate-friendly purchases through 2032, now leaves a narrow window for taxpayers to make use of these benefits.
Impact of Climate Legislation Rollback on Taxpayers
The “major bill” signed by President Donald Trump impacts many areas, including climate policy. Backed by Republicans, it could drive up costs for consumers and hinder efforts to reduce greenhouse gas emissions.
The bill’s significant rollbacks target industries such as renewable energy, but taxpayers aiming to decarbonize their homes will also feel the effects.
The 2022 Inflation Reduction Act provided tax credits for climate-conscious purchases like heat pumps and solar arrays through 2032, but this has been drastically reduced.
Lowell Ungar, director of federal policy for the nonprofit American Council for an Energy-Efficient Economy, warns this will remove assistance for consumers.
Despite this, existing funds from the Act for state efficiency and electrification rebate programs will remain available beyond the federal sunsets. These tax credits can still save people thousands of dollars before they disappear.
Act Now to Maximize Credits
For those looking to make the most of these credits, here is a breakdown of when they will expire.
Buy an EV before October
New electric vehicles qualify for a tax credit of up to $7,500 if they meet federal domestic manufacturing requirements. Credits on foreign-made EVs and used EVs under $25,000 are also available. These credits will vanish after September 30, making new electric vehicles more expensive and less accessible for many Americans.
Make Home Improvements by the End of the Year
The Energy Efficient Home Improvement Credit provides up to $2,000 toward qualified heat pumps, water heaters, biomass stoves or boilers, and up to $1,200 toward efficiency upgrades. These credits will end on December 31.
Invest in Solar This Year
The Residential Clean Energy Credit, which covers 30% of clean energy systems like solar panels, wind turbines, and geothermal heat pumps, will also end this year. With the average cost of a solar system in the U.S. just above $28,000, it’s key to make these investments soon to secure the credit.
While the credits are advantageous, Ungar suggests these home improvements could still make financial sense over time due to energy savings.
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