What does the IRA actually do?

At this point, no one needs a primer on inflation. We know it’s currently historic, we know the Fed is addressing it by raising rates and tightening monetary policy, and we know the impact that has had on public markets.

The Inflation Reduction Act takes a different approach, by making investments that lower the cost of energy, transportation, healthcare, and prescription drugs for people feeling that wallet crunch a bit more every month.

It’s not a no-strings-attached giveaway, and people do need to put skin in the game to benefit – but it can offer both immediate and long-term quality of life improvements, and (like SOLRX) lets people participate in climate solutions without just donating or taking concessions.

Here’s a blueprint for your clients to maximize their return on the IRA. Note: most publications are posting the highest amount possible, which assumes the LMI income bracket. The below is for those that are earning 80-150% of AMI.

Immediate Rebates and Tax Incentives

The IRA offers benefits to everyone, like extending healthcare subsidies and capping drug costs – but most households can plan ahead to maximize rebates for upgrades that may have already been budgeted and save money over the long term:

Those incentives help with immediate needs, like aging home upgrades, relief at the gas pump, or a break from volatile and constantly-increasing utility bills – to the tune of $1800 annual savings on energy costs for each household – while creating solid jobs and cleaner air for everyone to breathe.

Your Strategy to Maximizing the Inflation Reduction Act

A tax credit for ongoing cost savings is compelling, and the impact can be maximized with some upfront investment and planning. We suggest your clients approach these rebates as follows:

• Step 1 – Consider the switch to an electric car. Electric Vehicle rebate: the used car market is inflationary, so trade-in values are strong. This is a straightforward way to gain freedom from the gas pump. These are available now, no need to wait.
• Step 2 – Planning home efficiency upgrades with a focus on electrification. These 30% tax rebates are per year. With some minor planning of major expenditures that fall into these categories, taxpayers could reap thousands in savings. If these plans focus on electrification, a change over to rooftop solar could lead to dramatic savings. As a lot of the Inflation Reduction Act needs to be converted into per-state policies, there is plenty of time to start the planning process.
• Step 3 – Rooftop Solar. Properly sizing a rooftop solar system can offer utility savings on Day 1. With careful planning in Step 2 that gradually moves the home to a higher reliance on electric appliances with some efficiency upgrades, properly sizing the solar system will be much easier. The savings from a properly sized system help hedge against further inflation as the majority of energy needs are generated by the rooftop system.

Bottom Line – What Now?

Start the conversation. There is still a lot of paperwork that needs to be done between now and when these incentives will be available.