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A practical guide to using the climate law to get cheaper solar panels, heat pumps, and more.

Today marks the one year anniversary of the Inflation Reduction Act, the biggest investment in tackling climate change the United States has ever made. The law consists of dozens of subsidies to help individuals, households, and businesses adopt clean energy technologies. Many of these solutions will also help people save money on their energy bills, reduce pollution, and improve their resilience to disasters.
But understanding how much funding is available for what, and how to get it, can be pretty confusing. Many Americans are not even aware that these programs exist. A poll conducted by The Washington Post and the University of Maryland in late July found that about 66% of Americans say they have heard “little” or “nothing at all” about the law’s incentives for installing rooftop solar panels, and 77% have heard little or nothing about subsidies for heat pumps. This tracks similar polling that Heatmap conducted last winter, suggesting not much has changed since then.
Below is Heatmap’s guide to the IRA’s incentives for cutting your carbon footprint at home. If you haven’t heard much about how the IRA can help you decarbonize your life, this guide is for you. If you have heard about the available subsidies, but aren’t sure how much they are worth or where to begin, I’ll walk you through it. (And if you’re looking for information about the electric vehicle tax credit, my colleague at Heatmap Robinson Meyer has you covered with this buyer’s guide.)
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There’s funding for almost every solution you can think of to make your home more energy efficient and reduce your fossil fuel use, whether you want to install solar panels, insulate your attic, replace your windows, or buy electric appliances. If you need new wiring or an electrical panel upgrade before you can get heat pumps or solar panels, there’s some money available for that, too.
The IRA created two types of incentives for home energy efficiency improvements: Unlimited tax credits that will lower the amount you owe when you file your taxes, and $8.8 billion in rebates that function as up-front discounts or post-installation refunds on equipment and services.
The tax credits are available now, but the rebates are not. The latter will be administered by states, which must apply for funding and create programs before the money can go out. The Biden administration began accepting applications at the end of July and expects states to begin rolling out their programs later this year or early next.
The home tax credits are available to everyone that owes taxes. The rebates, however, will have income restrictions (more on this later).
“The Inflation Reduction Act is not a limited time offer,” according to Ari Matusiak, the CEO of the nonprofit advocacy group Rewiring America. The rebate programs will only be available until the money runs out, but, again, none of them have started yet. Meanwhile, there’s no limit on how many people can claim the tax credits, and they’ll be available for at least the next decade. That means you don’t need to rush and replace your hot water heater if you have one that works fine. But when it does break down, you’ll have help paying for a replacement.
You might want to hold off on buying new appliances or getting insulation — basically any improvements inside your house. There are tax credits available for a lot of this stuff right now, but you’ll likely be able to stack them with rebates in the future.
However, if you’re thinking of installing solar panels on your roof or getting a backup battery system, there’s no need to wait. The rebates will not cover those technologies.
A few other caveats: There’s a good chance your state, city, or utility already offers rebates or other incentives for many of these solutions. Check with your state’s energy office or your utility to find out what’s available. Also, it can take months to get quotes and line up contractors to get this kind of work done. If you want to be ready when the rebates hit, it’s probably a good idea to do some of the legwork now.
If you do nothing else this year, consider getting a professional home energy audit. This will cost several hundred dollars, depending on where you live, but you’ll be able to get 30% off or up to $150 back under the IRA’s home improvement tax credit. Doing an audit will help you figure out which solutions will give you the biggest bang for your buck, and how to prioritize them once more funding becomes available. The auditor might even be able to explain all of the existing local rebate programs you’re eligible for.
The Internal Revenue Service will allow you to work with any home energy auditor until the end of this year, but beginning in 2024, you must hire an auditor with specific qualifications in order to claim the credit.
Let’s start with what’s inside your home. In addition to an energy audit, the Energy Efficiency Home Improvement Credit offers consumers 30% off the cost (after any other subsidies, and excluding labor) of Energy Star-rated windows and doors, insulation, and air sealing.
There’s a maximum amount you can claim for each type of equipment each year:
$600 for windows
$500 for doors
$1,200 for air sealing and insulation
The Energy Efficiency Home Improvement Credit also covers heat pumps, heat pump water heaters, and electrical panel upgrades, including the cost of installation for those systems. You can get:
$2,000 for heat pumps
$600 for a new electrical panel
Yes, homeowners can only claim up to $3,200 per year under this program until 2032.
Also, one downside to the Energy Efficiency Home Improvement Credit is that it does not carry over. If you spend enough on efficiency to qualify for the full $3,200 in a given year, but you only owe the federal government $2,000 for the year, your bill will go to zero and you will miss out on the remaining $1,200 credit. So it could be worth your while to spread the work out.
The other big consumer-oriented tax credit, the Residential Clean Energy Credit, offers homeowners 30% off the cost of solar panels and solar water heaters. It also covers battery systems, which store energy from the grid or from your solar panels that you can use when there’s a blackout, or sell back to your utility when the grid needs more power.
The subsidy has no limits, so if you spend $35,000 on solar panels and battery storage, including labor, you’ll be eligible for the full 30% refund, or $10,500. The credit can also be rolled over, so if your tax liability that year is only $5,000, you’ll be able to claim more of it the following year, and continue doing so until you’ve received the full value.
Geothermal heating systems are also covered under this credit. (Geothermal heat pumps work similarly to regular heat pumps, but they use the ground as a source and sink for heat, rather than the ambient air.)
Here’s what we know right now. The IRA funded two rebate programs. One, known as the Home Energy Performance-Based Whole House Rebates, will provide discounts to homeowners and landlords based on the amount of energy a home upgrade is predicted to save.
Congress did not specify which energy-saving measures qualify — that’s something state energy offices will decide when they design their programs. But it did cap the total amount each household could receive, based on income. For example, if your household earns under 80% of the area median income, and you make improvements that cut your energy use by 35%, you’ll be eligible for up to $8,000. If your household earns more than that, you can get up to $4,000.
There’s also the High-Efficiency Electric Home Rebate Program, which will provide discounts on specific electric appliances like heat pumps, an induction stove, and an electric clothes dryer, as well as a new electrical panel and wiring. Individual households can get up to $14,000 in discounts under this program, although there are caps on how much is available for each piece of equipment. This money will only be available to low- and moderate-income households, or those earning under 150% of the area median income.
Renters with a household income below 150% of the area median income qualify for rebates on appliances that they should be able to install without permission from their landlords, and that they can take with them if they move. For example, portable appliances like tabletop induction burners, clothes dryers, and window-unit heat pumps are all eligible for rebates.
It’s also worth noting that there is a lot of funding available for multifamily building owners. If you have a good relationship with your landlord, you might want to talk to them about the opportunity to make lasting investments in their property. Under the performance-based rebates program, apartment building owners can get up to $400,000 for energy efficiency projects.
For the most part, yes. But the calculus gets tricky when it comes to heat pumps.
Experts generally agree that no matter where you live, switching from an oil or propane-burning heating system or electric resistance heaters to heat pumps will lower your energy bills. Not so if you’re switching over from natural gas.
Electric heat pumps are three to four times more efficient than natural gas heating systems, but electricity is so much more expensive than gas in some parts of the country that switching from gas to a heat pump can increase your overall bills a bit. Especially if you also electrify your water heater, stove, and clothes dryer.
That being said, Rewiring America estimates that switching from gas to a heat pump will lower bills for about 60% of households. Many utilities offer tools that will help you calculate your bills if you make the switch.
The good news is that all the measures I’ve discussed in this article are expected to cut carbon emissions and pollution, even if most of your region’s electricity still comes from fossil fuels. For some, that might be worth the monthly premium.
Tax Credit #1 offers 30% off the cost of energy audits, windows, doors, insulation, air sealing, heat pumps, electrical panels, with a $3200-per-year allowance and individual item limits.
Tax Credit #2 offers 30% off the cost of solar panels, solar water heaters, batteries, and geothermal heating systems.
Rebate Program #1 will offer discounts on whole-home efficiency upgrades depending on how much they reduce your energy use, with an $8,000 cap for lower-income families and a $4,000 cap for everyone else.
Rebate Program #2 is only for low- and moderate- income households, and will offer discounts on specific electric appliances, with a $14,000 cap.
Read more about the Inflation Reduction Act:
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Here’s what stood out to former agency staffers.
The Department of Energy unveiled a long-awaited internal reorganization of the agency on Thursday, implementing sweeping changes that Secretary of Energy Chris Wright pitched as “aligning its operations to restore commonsense to energy policy, lower costs for American families and businesses.”
The two-paragraph press release, which linked to a PDF of the new organizational chart, offered little insight into what the changes mean. Indeed, two sources familiar with the rollout told me the agency hadn’t even held a town hall to explain the overhaul to staffers until sometime Friday. (Both sources spoke on condition of anonymity out of fear of reprisals.)
After conversations with multiple former agency staffers, including a senior political appointee who helped lead the Biden-era reorganization in 2022, here’s what stood out to me:
The spring 2022 overhaul Jennifer Granholm, former President Joe Biden’s secretary of energy, oversaw came with a detailed legal memo and extensive explanations about what the changes would mean.
“Overall, this seems sloppy,” the former senior staffer who led that process told me this morning. “If you’re trying to carry out a very coherent energy dominance strategy, you’d at least explain which boxes are moving where and what’s sitting under those boxes.”
Announcing the changes with so little detail, the former official said, “seems like a fundamental lack of leadership.”
“This, to me, just seems reckless,” the appointee continued. “People who are sitting within these offices don’t know where they’re going to work virtually on Monday.”
That, of course, may change by the end of today once the Energy Department holds its town hall meeting.
It’s unusual for an office at the agency to report directly to the secretary. Those that do typically straddle multiple types of responsibilities within the agency. For example, the Office of Technology Transitions reported directly to Granholm under the Biden administration because its purview fell under both research and deployment. The Office of Policy functions similarly. But the newly-created Office of Critical Minerals and Energy Innovation absorbed not only various mining-related sections of the agency, but also the now-defunct Office of Energy Efficiency and Renewable Energy. That puts a lot of money and grant-making powers under the new office.
Leading the Office of Critical Minerals and Energy Innovation will be Audrey Robertson, who was confirmed last month as the assistant secretary for the Office of Energy Efficiency and Renewable Energy. A former investment banker and oil executive, Robertson served on the board of directors of Wright’s former company, the fracking giant Liberty Energy, until earlier this year. Another agency source familiar with the organization said “it makes no sense for this office not to answer to an undersecretary of energy.”
“Audrey is Wright’s person,” the source told me.
That, the other former agency official told me, creates some political liabilities for Wright.
“For departmental oversight reasons, that’s a lot of grant-making money and authorities that typically you’d want to layer under additional oversight before it goes to the secretary,” the ex-official said. “This is the thing that sticks out like a sore thumb.”
All that said about the new Office of Critical Minerals and Energy Innovation, no one can blame Wright for wanting to consolidate some of the bureaucracy. One way to read the decision to eliminate certain offices, such as the Office of Manufacturing and Energy Supply Chains or the Office of State and Community Energy Programs, is that the new administration wanted to undo the changes made under its predecessor in 2022. While manufacturing work included a lot of what the U.S. is doing with batteries, funding for that work fell under the Office of Energy Efficiency and Renewable Energy in the 2021 Infrastructure Investment and Jobs Act.
“A lot of the moves that they’re doing to re-consolidate offices aligns with what was technically under the Bipartisan Infrastructure Law, which directed battery work to go through EERE,” one of the sources told me. “So some of this is realignment back to the original congressional direction.”
The stop-gap funding bill that reopened the government after the longest shutdown in history included a measure to prevent any dismissals until January 30.
But it’s unclear whether the agency plans to terminate workers as part of the reorganization starting in February.
In a sign that the Trump administration is taking efforts to commercialize fusion energy technology more seriously, the reorganization gives fusion its own office, moving the work out of the Office of Science.
“Overall this is a win for the private-fusion sector, and further cements a move from a discovery-based research model to milestone-driven, commercialization-focused policy,” Stuart Allen, the chief executive of the investment company FusionX Group, wrote in a post on LinkedIn. “All signs point to a federal strategy increasingly aligned and enmeshed with the rapid advancement of fusion energy.”
Under the new structure, geothermal and fossil fuels will live together under the new Hydrocarbons and Geothermal Energy Office.
There are some obvious synergies. The new generation of geothermal startups racing toward commercialization rely on drilling techniques such as fracking to tap into hot rocks in places that conventional companies couldn’t. Oil and gas companies are excited about the industry; Sage Geosystems, one of the big players, is led by the former head of Shell’s fracking division. And notably, most of the big companies, including Sage, Fervo Energy, and XGS Energy (whom I have written about twice recently in these pages) are all headquartered in Big Oil’s capital of Houston, Texas.
Nuclear power has long had its own office at the Energy Department, and that won’t change. But you’d think that the other source of clean baseload power that the Trump administration has anointed as one of its preferred generating sources might get slotted in with geothermal. Instead, however, hydropower is in Robertson’s mega-office.
Unsurprisingly, the bulk of the Energy Department’s work that deals with the nation’s nuclear arsenal was largely left untouched by the changes. Perhaps the agency had enough drama from the Department of Government Efficiency’s dismissals of critical workers in the early days of the administration, which led to an embarrassing effort to reverse the firings.
As was widely expected, the reorg killed the Biden-era Office of Clean Energy Demonstrations, which the new administration had already gutted. What becomes of key programs that office managed is still a mystery. Chief among them: the hydrogen hubs.
The Energy Department yanked funding for the two regional hubs on the West Coast last month, as Heatmap’s Emily Pontecorovo reported at the time. A leaked list that the administration has yet to confirm as real proposed defunding all seven of the hubs. It’s unclear whether that may happen. If it doesn’t, it’s unclear where those billions of dollars may go. The most obvious place is under Robertson’s portfolio, ballooning the budget under her control by billions.
When Wright announced the first totally new loan issued under the agency’s in-house lender earlier this week, he trumpeted his new approach the Loan Programs Office. He wanted to refashion the entity with its lending authority of nearly $400 billion as a source of funding primarily for the nuclear industry. The first big loan issued Tuesday afternoon went to utility giant Constellation to finance the restart of the functional reactor at the Three Mile Island nuclear station. But at a press conference last month, Wright hinted at the new branding, as Emily called in this piece. It’s now the Office of Energy Dominance Financing.
The new office isn’t just the LPO, however. The $2.5 billion Transmission Facility Financing Program will also fall under the new so-called EDF — an acronym it will aptly share with France’s biggest utility, which came under state control recently as part of Paris’ efforts to refurbish and expand the country’s vast nuclear fleet.
I’ll leave it to my source to level a critique at my colleagues in this industry:
“Even in The New York Times today there’s an article that says all these offices are eliminated,” one of the sources told me. “Their names were eliminated, but a lot of the projects for whatever remains that they haven’t terminated are just being reassigned.” The Wall Street Journal had a similar angle.
The actual thing to watch for, the source said, was how job descriptions change.
“What’s going to be more telling is when they have a new, updated mission of the Office of Electricity or a new, updated mission of the Office of Critical Minerals and Energy Innovation.”
The United Nations climate conference wants you to think it’s getting real. It’s not total B.S.
How to transition away from fossil fuels. How to measure adaptation. How to confront the gap between national climate plans and the Paris Agreement goals. How to mine critical minerals sustainably and fairly.
How to get things done — not just whether they should get done — was front and center at this year’s United Nations climate conference, a marked shift from the annual event’s proclivity for making broad promises to wrestling with some of the tougher realities of keeping global warming in check.
Friday is the last official day of the two-week gathering known as COP30, taking place on the edge of the Amazon rainforest in Belém, Brazil, although probably not the actual end of it. Despite early assurances from the Brazilian government that this year’s conference would finish on time, delegates are still hashing out a final decision text and are likely to keep at it until at least Saturday.
The Brazilian leadership and other COP veterans have framed this as an “implementation COP,” where parties to the Paris Agreement “move from pledges to action” and similar clichès. It’s certainly not the first time these words have been used at COP. The Paris Agreement itself was billed as “enhancing the implementation” of the UN Framework Convention on Climate Change, the foundational treaty underlying these annual negotiations.
“Action” may be a stretch to describe what ultimately happened this year. As is the case at every COP, the provision of finance, or lack thereof, from developed to developing countries dominated the discussion, preventing progress on other agenda items. “Climate finance just remains this ongoing obstacle,” Rachel Cleetus, a senior policy director for the Union of Concerned Scientists, told me. Global south countries and small island states argue they simply cannot increase their ambition, or work on adaptation, without finance. The conference’s repeated failure to come to terms with that is probably the biggest counterpoint to the idea that these meetings have become more grounded in reality.
It remains to be seen which, if any, of the efforts to work out the details of the transition will make it into the final agreement, but the success of these annual gatherings should not only be measured by what’s in the text.
Here are three key ways Belém has already pushed the conversation forward.
During a speech at the start of the conference, Brazil’s President Luiz Inácio Lula da Silva proclaimed that it is “impossible to discuss the energy transition without talking about critical minerals, essential to make batteries, solar panels, and energy systems.”
Never before had the negotiations broached the subject of all of the industrial earth-moving implicit in the fight against climate change. By the end of the first week, however, one of the working groups had released a draft text that acknowledged “the social and environmental risks associated with” extracting and processing critical minerals.
A later revision of the document added a note about “enabling fair access to opportunities and fair distribution of benefits of value addition,” a reference to breaking the pattern of rich countries extracting minerals cheaply from the Global South while keeping the more profitable processing and manufacturing of those minerals at home. (As of Friday morning, however, references to “critical minerals” were erased from the text.)
The text was released by the Just Transition Work Program, a newer workstream at the conference that was established at COP27 in Egypt. Outside of the critical minerals note, there was a larger push to get Just Transition program as a whole more grounded in reality. This area of the negotiations focuses on ensuring the goals of the Paris Agreement are achieved fairly and equitably, with recognition that the transition will happen at a different pace in different countries, with different implications for each one’s economy. It was primarily established as a forum for countries to exchange ideas and information, with biannual meetings.
At COP30, however, the G77, China, and many global south countries began pushing to turn it into more of an action-oriented group that guides the global transition and tracks progress using agreed-upon metrics.
The Just Transition mechanism is not to be confused with the much-talked-about roadmap to transition away from fossil fuels, although the two are closely tied.
Two years ago, the final agreement at COP28 in Dubai made history with the first-ever call for “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner.” Last year, however, that edict was dropped, as negotiations over a new climate finance target took precedence. Now it’s been revived, with robust support from countries to build on the statement with a more fleshed-out plan. Phasing out fossil fuels has vastly different implications for different countries, some of whose economies are deeply dependent on revenue from their fossil resources. The roadmap would start to work through what it would really mean to coordinate the effort.
Once again, the message came from the top. “We need roadmaps that will enable humankind, in a fair and planned manner, to overcome its dependence on fossil fuels, halt and reverse deforestation, and mobilize resources to achieve these goals,” Brazil’s Silva said in a speech at the opening of the conference.
This past Tuesday, a coalition of a whopping 82 countries came out in support of this planning effort, pressing for it to be included in the final decision text. “This is a global coalition, with global north and global south countries coming together and saying with one voice: this is an issue which cannot be swept under the carpet,” Ed Miliband, the UK’s energy secretary, said during a press conference that day.
Several more countries have joined since, bringing the count to 88 — nearly half of the 195 parties to the Paris Agreement. The biggest fossil fuel emitters, such as China, India, and Saudi Arabia, are not on board, however. As of Friday morning, all mentions of fossil fuels, let alone a roadmap, have been scrubbed from the draft decision text. Still, the huge coalition backing the roadmap is a sign of a growing and potentially powerful consensus.
One of the big questions looming over this year’s conference was whether and how countries would address their utter failure to live up to the Paris Agreement’s goal to keep warming “well below 2°C above pre-industrial levels,” let alone the more ambitious target of 1.5 degrees.
A report issued by the United Nations Environment Program just before the talks began concluded that countries’ latest climate pledges, known as their “nationally determined contributions,” or NDCs, would put the planet on a path to warm at least 2.3 degrees by the end of the century. It also stated definitively that global average temperatures would exceed 1.5 degrees of warming.
This wasn’t news — scientists have previously concluded that exceeding 1.5 degrees is basically guaranteed. “But this is the first time we saw it so bluntly in the UN report,” Cleetus told me. “So that was a pretty sobering backdrop coming into this COP.”
All countries were supposed to submit updated NDCs this year that contained targets for 2035, but more than 70 have failed to do so, including India, one of the world’s biggest emitters.
Island states, backed by Latin American nations and the EU, wanted the conference to make some kind of declaration that countries’ current pledges are not sufficient and should be revised. The draft text issued this morning, while acknowledging the insufficiencies of NDCs, does not spell out the implications or required response as bluntly as many want to see.
It does, however, introduce an important new concept that could become a key part of the negotiations in the future. For the first time, the text references a resolve to “limit both the magnitude and duration of any temperature overshoot.” This not only acknowledges that it’s possible to bring temperatures back down after warming surpasses 1.5 degrees, but that the level at which temperatures peak, and the length of time we remain at that peak before the world begins to cool, are just as important. The statement implies the need for a much larger conversation about carbon removal that has been nearly absent from the annual COPs, but which scientists say that countries must have if they are serious about the Paris Agreement goals.
"If countries (or the UNFCCC) want to keep talking about reaching 1.5C, they need to embrace net-negative emissions, moving even beyond net-zero,” Oliver Geden, a senior fellow at the German Institute for International and Security Affairs, and an IPCC report author, told me. “If they don't want to do this, then talking about reaching 1.5°C is not credible anymore.”
Things in Sulphur Springs are getting weird.
Texas Attorney General Ken Paxton is trying to pressure a company into breaking a legal agreement for land conservation so a giant data center can be built on the property.
The Lone Star town of Sulphur Springs really wants to welcome data center developer MSB Global, striking a deal this year to bring several data centers with on-site power to the community. The influx of money to the community would be massive: the town would get at least $100 million in annual tax revenue, nearly three times its annual budget. Except there’s a big problem: The project site is on land gifted by a former coal mining company to Sulphur Springs expressly on the condition that it not be used for future energy generation. Part of the reason for this was that the lands were contaminated as a former mine site, and it was expected this property would turn into something like a housing development or public works project.
The mining company, Luminant, went bankrupt, resurfaced as a diversified energy company, and was acquired by power giant Vistra, which is refusing to budge on the terms of the land agreement. After sitting on Luminant’s land for years expecting it to be used for its intended purposes, the data center project’s sudden arrival appears to have really bothered Vistra, and with construction already underway, the company has gone as far as to send the town and the company a cease and desist.
This led Sulphur Springs to sue Vistra. According to a bevy of legal documents posted online by Jamie Mitchell, an activist fighting the data center, Sulphur Springs alleges that the terms of the agreement are void “for public policy,” claiming that land restrictions interfering with a municipality’s ability to provide “essential services” are invalid under prior court precedent in Texas. The lawsuit also claims that by holding the land for its own use, Vistra is violating state antitrust law by creating an “energy monopoly.” The energy company filed its own counterclaims, explicitly saying in a filing that Sulphur Springs was part of crafting this agreement and that “a deal is a deal.”
That’s where things get weird, because now Texas is investigating Luminant over the “energy monopoly” claim raised by the town. It’s hard not to see this as a pressure tactic to get the data center constructed.
In an amicus brief filed to the state court and posted online, Paxton’s office backs up the town’s claim that the land agreement against energy development violates the state’s antitrust law, the Texas Free Enterprise and Antitrust Act, contesting that the “at-issue restriction appears to be perpetual” and therefore illegally anti-competitive. The brief also urges the court not to dismiss the case before the state completes its investigation, which will undoubtedly lead to the release of numerous internal corporate documents.
“Sulphur Springs has alleged a pattern of restricting land with the potential for energy generation, with the effect of harming competition for energy generation generally, which would necessarily have the impact of increasing costs for both Sulphur Springs and Texas consumers generally,” the filing states. “Evaluating the competitive effects of Luminant’s deed restrictions as well as the harm to Texans generally is a fact-intensive matter that will require extensive discovery.”
The Texas attorney general’s office did not respond to multiple requests for comment on the matter. It’s worth noting that Paxton has officially entered the Republican Senate primary, challenging sitting U.S. Senator John Cornyn. Contrary to his position in this case, Paxton has positioned himself as a Big Tech antagonist and fought the state public utilities commission in pursuit of releasing data on the crypto mining industry’s energy use.