You’re out of free articles.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
More than 3 million American households used the Inflation Reduction Act’s subsidies for homeowners last year, collectively saving more than $8 billion on things like solar panels, batteries, heat pumps, insulation, and other clean energy technologies and efficiency upgrades.
That’s according to new data released Wednesday by the Treasury Department, which provided the most significant insight yet into how Americans are actually using the IRA. Polling had so far suggested that Americans were curious — if confused — about the law’s benefits, but until today, there was no official data available to back up those impressions.
The data sheds light on usage of two tax credits in particular, one of which encourages Americans to make energy efficient changes to their home, e.g. installing a heat pump or a more efficient water heater, the other of which goes toward installing rooftop solar or another form of zero-carbon energy generation.
Of the more than 137 million tax returns the government had processed by late May, some 3.4 million of them — or approximately 2.5% — took advantage of at least one of these two subsidies. That’s about 30% more people than used similar, though less generous tax credits in 2021.
“The Biden Harris administration’s top economic priority is making life more affordable for Americans,” Wally Adeyemo, the deputy secretary of the Treasury, said during a briefing call this week. “The Inflation Reduction Act is doing exactly that.”
Not all of the data flatters the Biden administration’s goals, however. The tax credits — especially those that reward energy-efficient home upgrades — are used in large part by richer households who have the money and wherewithal to pay for costly upgrades to their homes in the first place. Here are four takeaways from this first crucial look into how the law is going.
More than 1.2 million Americans used the residential clean energy tax credit, which covers some of the cost of installing clean electricity-generating technology. A comfortable majority of those claiming the credit — some 750,000 — purchased rooftop solar panels.
When the IRA was first proposed in 2022, the Joint Committee on Taxation projected the government would spend $2 billion on the residential clean energy credit in 2023. In fact, it has spent more than triple that — a total of $6.3 billion and counting. The Biden administration expects more claims to appear as tax returns keep rolling in through November.
The top three states claiming the efficiency tax credit were Maine, New Hampshire, and Vermont. These states have some of the strongest state energy efficiency policies in the country, according to the American Council for an Energy Efficient Economy’s state scorecard, giving homeowners the chance to stack multiple subsidies to help them pay for upgrades. Northeast states also have some of the most expensive electricity in the country, and many homes there still use fuel oil heating systems, the priciest option for home heating.
But another set of states dominated the clean energy tax credits, which cover solar panels. The top three states to use that subsidy were Nevada, Florida, and Arizona — some of the sunniest places in the country, which have long led on rooftop solar adoption.
Ironically, West Virginia — home of Senator Joe Manchin, one of the IRA’s architects — was dead last of states that used at least one of the credits.
The Inflation Reduction Act revived an earlier, expired tax credit that helped Americans pay for energy efficient home upgrades and appliances. But while the new program increased the amount households could get back for installing electric heat pumps from $500 to $2,000, it also kept in place subsidies for “qualified” natural gas heaters. The government helped pay for taxpayers to install nearly 600,000 new natural gas-burning space heating and water heating systems in 2023. Those appliances have a useful life of at least 15 to 20 years.
The level of uptake is not necessarily surprising — the upfront cost of a natural gas boiler or furnace is much lower than that of a heat pump system. In many states, natural gas heating systems will also result in lower energy bills than a heat pump will.
Heat pump water heaters are more competitive on cost than space heaters, so there the mismatch may be more of a marketing issue. With the federal tax credit, the upfront cost can be nearly on par with natural gas water heaters, and they actually beat their natural gas-powered brethren when it comes to energy bill savings.
On a call with reporters on Tuesday, Adeyemo pointed out that nearly half the families who claimed one or both of the residential clean energy credits had incomes lower than $100,000 in 2023.
That’s true. But roughly 75% of filers had incomes lower than $100,000 in 2023. When you look at how many people claimed each tax credit as a percentage of the total number of filers in that bracket, it’s clear that both tax credits are more frequently adopted by higher income Americans.
There’s also an interesting split between the two credits. Wealthier households were especially enthusiastic about efficiency upgrades — roughly one in 25 of those bringing in more than $100,000 claimed the energy efficiency tax credit.
Adeyemo also pointed out that, since people invest in their home’s heating system rather rarely, the administration expects uptake to increase over time.
“Our expectation is that as more American families become more familiar with these tax credits, and they look for ways to save money, they’ll continue to see this as a means to do so,” he said. “Given what we’ve heard from some of the companies selling these products, our expectation is that this will continue.”
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
And more of this week’s top renewable energy fights across the country.
1. Otsego County, Michigan – The Mitten State is proving just how hard it can be to build a solar project in wooded areas. Especially once Fox News gets involved.
2. Atlantic County, New Jersey – Opponents of offshore wind in Atlantic City are trying to undo an ordinance allowing construction of transmission cables that would connect the Atlantic Shores offshore wind project to the grid.
3. Benton County, Washington – Sorry Scout Clean Energy, but the Yakima Nation is coming for Horse Heaven.
Here’s what else we’re watching right now…
In Connecticut, officials have withdrawn from Vineyard Wind 2 — leading to the project being indefinitely shelved.
In Indiana, Invenergy just got a rejection from Marshall County for special use of agricultural lands.
In Kansas, residents in Dickinson County are filing legal action against county commissioners who approved Enel’s Hope Ridge wind project.
In Kentucky, a solar project was actually approved for once – this time for the East Kentucky Power Cooperative.
In North Carolina, Davidson County is getting a solar moratorium.
In Pennsylvania, the town of Unity rejected a solar project. Elsewhere in the state, the developer of the Newton 1 solar project is appealing their denial.
In South Carolina, a state appeals court has upheld the rejection of a 2,300 acre solar project proposed by Coastal Pine Solar.
In Washington State, Yakima County looks like it’ll keep its solar moratorium in place.
And more of this week’s top policy news around renewables.
1. Trump’s Big Promise – Our nation’s incoming president is now saying he’ll ban all wind projects on Day 1, an expansion of his previous promise to stop only offshore wind.
2. The Big Nuclear Lawsuit – Texas and Utah are suing to kill the Nuclear Regulatory Commission’s authority to license small modular reactors.
3. Biden’s parting words – The Biden administration has finished its long-awaited guidance for the IRA’s tech-neutral electricity credit (which barely changed) and hydrogen production credit.
A conversation with J. Timmons Roberts, executive director of Brown University’s Climate Social Science Network
This week’s interview is with Brown University professor J. Timmons Roberts. Those of you familiar with the fight over offshore wind may not know Roberts by name, but you’re definitely familiar with his work: He and his students have spearheaded some of the most impactful research conducted on anti-offshore wind opposition networks. This work is a must-read for anyone who wants to best understand how the anti-renewables movement functions and why it may be difficult to stop it from winning out.
So with Trump 2.0 on the verge of banning offshore wind outright, I decided to ask Roberts what he thinks developers should be paying attention to at this moment. The following interview has been lightly edited for clarity.
Is the anti-renewables movement a political force the country needs to reckon with?
Absolutely. In my opinion it’s been unfortunate for the environmental groups, the wind development, the government officials, climate scientists – they’ve been unwilling to engage directly with those groups. They want to keep a very positive message talking about the great things that come with wind and solar. And they’ve really left the field open as a result.
I think that as these claims sit there unrefuted and naive people – I don’t mean naive in a negative sense but people who don’t know much about this issue – are only hearing the negative spin about renewables. It’s a big problem.
When you say renewables developers aren’t interacting here – are you telling me the wind industry is just letting these people run roughshod?
I’ve seen no direct refutation in those anti-wind Facebook groups, and there’s very few environmentalists or others. People are quite afraid to go in there.
But even just generally. This vast network you’ve tracked – have you seen a similar kind of counter mobilization on the part of those who want to build these wind farms offshore?
There’s some mobilization. There’s something called the New England for Offshore Wind coalition. There’s some university programs. There’s some other oceanographic groups, things like that.
My observation is that they’re mostly staff organizations and they’re very cautious. They’re trying to work as a coalition. And they’re going as slow as their most cautious member.
As someone who has researched these networks, what are you watching for in the coming year? Under the first year of Trump 2.0?
Yeah I mean, channeling my optimistic and Midwestern dad, my thought is that there may be an overstepping by the Trump administration and by some of these activists. The lack of viable alternative pathways forward and almost anti-climate approaches these groups are now a part of can backfire for them. Folks may say, why would I want to be supportive of your group if you’re basically undermining everything I believe in?
What do you think developers should know about the research you have done into these networks?
I think it's important for deciding bodies and the public, the media and so on, to know who they’re hearing when they hear voices at a public hearing or in a congressional field hearing. Who are the people representing? Whose voice are they advancing?
It’s important for these actors that want to advance action on climate change and renewables to know what strategies and the tactics are being used and also know about the connections.
One of the things you pointed out in your research is that, yes, there are dark money groups involved in this movement and there are outside figures involved, but a lot of this sometimes is just one person posts something to the internet and then another person posts something to the internet.
Does that make things harder when it comes to addressing the anti-renewables movement?
Absolutely. Social media’s really been devastating for developing science and informed, rational public policymaking. It’s so easy to create a conspiracy and false information and very slanted, partial information to shoot holes at something as big as getting us off of fossil fuels.
Our position has developed as we understand that indeed these are not just astro-turf groups created by some far away corporation but there are legitimate concerns – like fishing, where most of it is based on certainty – and then there are these sensationalized claims that drive fears. That fear is real. And it’s unfortunate.
Anything else you’d really like to tell our readers?
I didn’t really choose this topic. I feel like it really got me. It was me and four students sitting in my conference room down the hall and I said, have you heard about this group that just started here in Rhode Island that’s making these claims we should investigate? And students were super excited about it and have really been the leaders.