Climate change measure offers tax breaks for energy-efficient California households
There’s $22,000 in savings waiting for many Sacramento area households willing to buy more energy-efficient products and services.
There are similar potential savings in Fresno, Modesto, Merced, San Luis Obispo and everywhere else.
Here’s why: The climate change legislation President Joe Biden signed into law last week offers a long list of financial incentives to buy or replace more efficient appliances, cars, solar energy systems and more.
That means that in the Sacramento area, a family of four with an annual income around $102,200, the county’s estimated median, could save as much as $22,020 over the next few years.
An individual renter with an income of $71,550, the area median, could save $18,189. The figure is lower because a renter would not necessarily pay for home improvements..
The estimates come from a calculator devised by Rewiring America, a nonprofit organization that says it is “focused on electrifying everything in our communities.”
Some of the savings are available immediately to those who qualify, such as a 30% tax credit for rooftop solar installation.
Most become effective next year, such as rebates on a heat pump air conditioner/heater (up to $8,000) and a tax credit for certain new electric vehicles (up to $7,500).
Some of the savings have been criticized as too tilted towards the wealthy. A Sacramento-area family of four with a $250,000 income, for instance, could still get $19,672 in incentives.
While they could not qualify for all the discounts, they could receive tax credits for buying a new electric car and the rooftop solar installation.
House Republican Leader Kevin McCarthy of Bakersfield charged that the Democratic-authored legislation “hands out tax credits like candy, with no accountability.”
Ari Matusiak, chief executive officer of Rewiring America, had high praise for the incentive package. He particularly liked how it gives consumers 10 years in many cases to use the incentives and credits, so as older appliances fail, people will have incentives to replace them with energy-efficient systems.
“You don’t have to go out and buy something today. It’s designed to meet you where you are,’ he said.
The savings generally break down two ways. Qualifying consumers can get up to $14,000 in rebates for energy-efficient devices over the next 10 years, and eligibility depends on median income. The tax credits depend on taxable income.
That’s why in the Fresno-Merced-Modesto area, a family of four with an income of roughly $80,600, close to the median, would qualify for $20,117 in savings. The difference between that figure and the one for Sacramento is that the tax credit is less because of the smaller income.
But in San Luis Obispo, where the family of four median is $109,200, the savings could total $23,960, thanks to more tax credits.
The calculator can be found at Rewiring America’s website.
This story was originally published August 23, 2022 at 5:00 AM with the headline "Climate change measure offers tax breaks for energy-efficient California households."
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