What is Low GWP?

The Inflation Reduction Act of 2022 (IRA), signed into law on August 16, 2022, directs new federal spending toward reducing carbon emissions, lowering healthcare costs, funding the Internal Revenue Service, and improving taxpayer compliance.

Significant federal funding for climate efforts. The IRA directs nearly $370 billion in federal funding to clean energy, with the goal of substantially lowering the nation’s carbon emissions by the end of this decade. The funds will be delivered through a mix of tax incentives, grants, and loan guarantees. Clean electricity and transmission command the biggest slice, followed by clean transportation, including electric-vehicle (EV) incentives.

Consumer incentives. Some $43 billion in IRA tax credits aim to lower emissions by making EVs, energy-efficient appliances, rooftop solar panels, geothermal heating, and home batteries more affordable. Starting in 2023, qualifying EVs will be eligible for a tax credit of up to $7,500 and $4,000 for new and used vehicles, respectively. Qualifying home improvements will be eligible for a tax credit of up to 30 percent of the total cost, capped at $1,200 per year, like $600 for a gas furnace and $600 for an Air Conditioner. For heat pumps, the credit is capped at $2,000 per year.

This is an annual tax credit consumers can take advantage of each year thru 2032.