The Inflation Reduction Act – Boosting the Energy Transition

The Inflation Reduction Act (IRA) ^[1] is making waves in the clean energy transition. The largest federal climate change legislation in U.S. history is directing $369 billion over the next 10 years to promote clean energy and pollution reduction. These clean energy provisions will transform not only how homes and businesses are powered, heated, and cooled but also the transportation sector. The IRA contains incentives for renewable energy, battery storage, electric vehicles, and home energy efficiency.

The IRA’s incentive financial provisions will both provide tax credits and direct consumer incentives. Features of the IRA include $9 billion in home energy rebate programs that focus on energy-efficient technologies and consumer tax credits for heat pumps, rooftop solar, and high-efficiency electric heating, ventilation, air conditioning, and water heating. The bill continues the $7,500 tax credit for the purchase of new electric vehicles while including a $4,000 tax credit toward the purchase of used electric vehicles. The bill also incorporates a 30% tax credit ($1,200 to $2,000 per year) and different types of rebates (reaching $14,000) for homeowners who improve the energy efficiency of their houses. Rules for the incentives will be finalized later this year.

Today, consumers’ preference for clean energy technology ^[2] is driven by lower operating costs and a desire to be self-sufficient. As the IRA moves towards full implementation, efficient and streamlined work processes will be needed to ensure the funds are effectively and prudently spent. ANB Systems offers a suite of products that can speed the consumer qualification process and the disbursement of incentive funds with a flexible platform that can scale as needed. Thousands of individual consumer decisions will drive the clean energy transition forward, and reducing transactional friction for consumer is critical.