You and all Americans have basically been given an electric bank account to swap your old fossil fuel cars for new, clean electric ones. These funds are good for a decade, hold thousands of dollars, and essentially renew each year. These are the provisions of a new law, the Inflation Reduction Act (IRA), which directly benefits you and other Americans.
In addition to these benefits, you get a bonus: you save money every year by blocking the prices of the lower energy bills that come with switching to electricity. Furthermore, this new law has a pretty decent advantage: it is one of the most effective ways to tackle the climate crisis. This is why we need every family in America to know the benefits of the new law and how to use them.
In fact, 42% of energy-related emissions in the United States come from the decisions we make around the kitchen table: the cars we drive, how we heat air and water, cook food and dry our clothes, and where we get food. energy to power all these machines. There are 1 billion cars in 121 million households that need to be replaced or installed as electric over the next two decades. There is simply no way for us to stay within 1.5 degrees Celsius warming (to avoid the worst impact of climate change) unless we do.
President Biden celebrates the inflation reduction bill on Tuesday for good reason. The new law puts all of us at the center of US climate policy and recognizes that electrifying our lives is not only good business for the planet, but also for our wallets. Households switching to electricity save an average of $ 1,800 per year per household, each year. This is incredibly important in a country where 49% of Americans don’t have $ 400 in emergency savings. Switching to electricity also protects us from the inflationary shocks that come from megalomaniac dictators and profit-hungry fossil fuel companies because we no longer have to rely on them to power our lives.
The Inflation Reduction Act will offer approximately $ 100 billion in benefits to Americans through a combination of The Inflation Reduction Act will offer up to $ 858 billion in benefits to Americans through a combination of discounts, tax credits and low-cost financing, if we maximize its full electrical potential. This will offer Americans a lot of money to tap into as they replace their outdated machines with new, clean electric ones. It represents what will be the largest transfer of wealth in history from energy producers to American households, but only if we do.
This is because the key thing about these benefits is that if you don’t spend this free money, you lose it and, even worse, life becomes more expensive.
Let’s say I have a fossil fueled furnace and it will shut down next year. I could access a few dollars in tax credit to get a heat pump. If I didn’t know it’s an option, however, I could replace my gas oven with another gas oven. But since those machines last about 15 years, I would lose the money offered by the new law designated for a heat pump, because the spending window of the law on reducing inflation is currently 10 years and it would not make much sense for me to go out and replace a car I just bought. Instead of reaping the benefits of a cleaner, cheaper, more efficient and better machine, I would also have to pay for a fossil fueled appliance that will only cost more in the same window of time, as economies begin to value increasingly unsustainable costs. of a world powered by gas.
So how can we make sure Americans don’t get lost? We need to bring this policy to life in our collective hearts and minds. The idea of going electric is new to many. Only a quarter of Americans say they are familiar with heat pumps. This means that at most a quarter of Americans know that a heat pump is the best, and now most affordable, choice for heating or cooling, no matter where you live in this country.
Americans must plan for electrification, to “rewire ready” – upgrading their panels and wiring as needed – and the inflation reduction law helps them do that. My organization, Rewireing America, has created a calculator to help people understand the funds available to them and to start thinking about what they will do to maximize the benefits. The powerful thing about these new benefits is that money becomes more valuable over time. Because as more households become electric, the cost of these electric cars will decrease, while the value of discounts and other incentives will remain constant. Year after year, our purchasing power will become stronger and stronger.
These new benefits give Americans the ability to play their part in a turning point for our communities, the country and the planet. Electrifying your home is the contemporary garden of victory: one thing you can do to free America from dependence on fossil fuels, a way to help reduce our emissions, and an opportunity to help build America’s supply chains and encourage the establishment of well-paid works here at home.
But the key thing to understand about the Inflation Reduction Act is that it is a statement of potential, not a guaranteed outcome. Its success depends on the people who access these benefits. Otherwise, less will be spent on electrification and the resulting reductions in emissions, savings and benefits for families and the community will be lower. Conversely, there is hardly any limit to the amount of money that can be accessed through these new benefits. If the United States successfully ramps up electricity adoption to 100% by the end of the IRA, these $ 858 billion in residential electrification benefits will have been invested in every community in the country, thereby saving more money for the families.
The Inflation Reduction Act is the largest climate investment in our nation’s history, a unique opportunity to address affordability and the climate crisis, as well as rewrite history from now on. If Americans knew they had thousands of dollars to spend on making their homes cheaper to run, healthier to live in, and more comfortable, they would use that money. It’s up to those of us who know how to tell him.
Ari Matusiak is the co-founder and CEO of Rewiring America, co-founder of Purpose Venture Group and former special assistant to President Obama and director of the administration’s private sector.