Earlier this summer, the American people endured the longest, hottest, most expansive heat wave in recorded history. For the most part, we rose to the occasion. We looked out for our neighbors. We relied on each other to get through. In short, we adapted.
But now we have to pay for it.
Typically, for electricity consumers, “sticker shock” comes in September, when the bill for August’s air conditioning comes due. This year, it is coming now. We are paying for the mother-of-all heat waves before the risk of a second, more typical August heat wave has even subsided. This puts us all at risk to a one-two energy cost gut punch; a punch that will be felt most keenly by middle- and lower-income American households.
We are entering a vicious cycle of relentlessly hotter weather leading to more energy used for air conditioning and, in turn, greater greenhouse gas emissions. At the end of the day, we’re left with even hotter weather—our loved ones at risk, our energy bills through the roof, our climate goals that much further from reach.
But we are not powerless.
Breaking the circle is going to take time, but fortunately we have started. A year ago today, President Biden signed into law the Inflation Reduction Act, the most significant climate law in American history. It includes game-changing tax credits for clean energy manufacturing and rebates for Americans to make their homes and businesses more energy efficient. The best part: it’s going to unleash a new era of job growth—estimated upwards of 1.5 million—in communities across America.
Together with the previous year’s Bipartisan Infrastructure Law, this landmark law is already supercharging our new clean energy economy in record time.
New Department of Energy modeling around the impacts of the Inflation Reduction Act projects that by 2030, families will save up to $38 billion – with a B – on home electricity bills. U.S. greenhouse gas and industrial and manufacturing emissions will be down 40% below 2005 levels by the end of the decade. And here’s the key: it’s going to double the share of American electricity generated from clean sources to reach 80% clean by 2030. That means we can strengthen our domestic energy security and slash net crude oil imports by up to nearly 60%.
At the U.S. Department of Energy (DOE), we have launched a series of vast collaborative efforts between public sector and private, with states, local and Tribal governments, with energy producers and large energy buyers and hopefully with you and other American energy consumers to bring to life the $356 billion Inflation Reduction Act.
And there are already opportunities available now. For clean energy producers that means taking advantage of tax credits galore that can add up to 70% for projects in renewables. For American families, it means taking advantage of tax credits to save up to 30% on home upgrades like insulation, efficient windows, solar panels, and more.
For low-to-moderate income earners, the Inflation Reduction Act also includes a revolutionary consumer rebate program to help with purchasing home energy equipment like electric stoves, water heaters, and clothes dryers. Just last month, DOE announced it is accepting applications for states to its $8.5 billion home rebates programs. These programs, implemented by states, will increase energy efficiency in American homes and ensure more communities have access to affordable, reliable, clean electricity.
But that’s not all!
Through this historic law, commercial building owners can receive a tax credit up to $5 per square foot to support energy efficiency improvements that deliver lower utility bills. Small businesses can also benefit from tax credits that cover 30% of the costs to install low-cost solar power and purchase clean trucks and vans for commercial fleets.
And woven into each of these new actions is a commitment to advancing equity in more communities, including for those that live in underserved, rural, and remote and traditional energy regions. By slashing emissions and reducing air pollutants, we believe this law can prevent an estimated 3,900 premature deaths and 100,000 asthma attacks by 2030.
It’s just year one, and we are just getting started. We look forward to working more with you and your communities to make sure next summer, and all the summers thereafter, are better. Climate change is no longer about future generations; it is about us. Now we must act.