The Inflation Reduction Act, passed in 2022, established clean energy tax incentives for individuals, businesses, government entities, schools, and nonprofits. The incentives apply to everything from heat pumps to solar panels, electric vehicles, and home weatherization.
These incentives help reduce energy costs and greenhouse gas emissions, thereby protecting the climate. The recently passed “Big Beautiful Bill” legislation moved up the deadlines for these tax incentives, so it is important to act on them now.
Electric vehicles
For individuals and homeowners, the new and used electric vehicle tax incentives expire September 30, 2025. You must purchase the electric vehicle by that deadline to qualify for the tax credits. See qualified new models and regulations for a tax credit up to $7500. See qualified used models and regulations for a tax credit up to $4000. Tax credits of up to $1000 are available for electric vehicle chargers as well, with a deadline for installation by June 2026. Check out the details here.
Electric vehicles are cheaper to run and have lower maintenance costs than gasoline-powered vehicles. Plugging in saves money and the hassle of gassing up your vehicle, and electric vehicles are great performers on the road. Charging your electric vehicle in Alameda reduces greenhouse gas emissions compared to gasoline-powered vehicles, as Alameda Municipal Power provides 100% renewable energy electricity.
Home energy
Save on your home energy costs and earn a tax credit of up to $3200 with energy-efficient home improvements by December 31, 2025. Qualifying actions include installing insulation, sealing doors and windows, installing a heat pump HVAC or a heat pump water heater, and performing energy audits. You can receive 30% of the total cost for these energy improvements with various regulations applied.
Lastly, you can receive a residential clean energy credit of 30% of the system cost for installing renewable energy, including solar, wind turbines, geothermal heat pumps, and home batteries. There is no cap on the value of 30% of the system cost. You can carry forward the balance of any tax credit to the following year, if you don’t have enough tax liability to use the full credit in one year. See additional details.
Local businesses, nonprofits, schools, and local governments have later deadlines for these clean energy tax incentives, but they have been moved up as well. So check them out and start planning now.
Do not miss out on these tax incentives! It’s not too late to earn the tax credits, save money on your energy costs, and protect the climate, but you need to act quickly.
Joyce Mercado is the author of Save the Planet in Your Spare Time: A Climate Protection Handbook for the Busy Person, a member of Community Action for a Sustainable Alameda (CASA), and President of the Rotary Club of Alameda. Her columns are collected at alamedapost.com/Joyce-Mercado. She can be reached at [email protected].
