‘We’re not breathing fumes’: Homeowners use tax credits to purchase new EV, water heater

When Liz Robinson and her husband, Paul Ricker, think of the future, they worry about the effects on the world their children and grandchild will inherit due to climate change.

To help curb some of the environmental fallout from climate change, including deteriorating air quality and severe flooding, the Philadelphia residents have for years worked to live more environmentally friendly lives.

That has meant installing solar power in their home nearly a decade ago, purchasing an electric induction stove, and using federal tax credits from the Inflation Reduction Act of 2022 to buy an electric vehicle last year and replace their gas water heater with a more energy-efficient heat pump water heater three weeks ago.

“Environmentally, we feel we need to do everything we can to slow climate change,” Robinson wrote to the Pennsylvania Independent. “The world we are leaving our children and grandchildren is becoming increasingly unstable, so we’re trying to contribute to the solutions and not keep making the problem worse.”

Federal tax credits have played a big role in Robinson’s and Ricker’s ability to do these home projects. On Sept. 3, they joined federal and state officials at their home to celebrate the second anniversary of the Inflation Reduction Act, the federal law that allowed them to claim tax credits for their new Tesla and water heater.

President Joe Biden signed the IRA on Aug. 16, 2022. The act is the largest federal investment in green technologies in U.S. history and is projected to cut U.S. greenhouse gas emissions by about 40% by 2030. Greenhouse gases are the largest contributor to global climate change.

In addition to containing provisions aimed at combating climate change, the Inflation Reduction Act caps insulin costs at $35 for some Medicare users and authorized Medicare to negotiate prescription drug prices with pharmaceutical companies. In turn, that has lowered the cost of a long list of prescription drugs.

“The Inflation Reduction Act is an extraordinary piece of legislation; it’s mind-blowing,” Robinson, who serves as the executive director of the Philadelphia Solar Energy Association, told the Pennsylvania Independent in an interview.

The celebration of the IRA’s second anniversary comes as more than 155,000 Pennsylvania households have claimed the act’s tax credits on investments in high-efficiency electric appliances and rooftop solar projects, according to the nonprofit Rewiring America, which helped to organize the Sept. 3 event at Robinson’s home. The law also created 14 clean energy projects in the state and more than 2,000 new jobs. AnneMarie Horowitz of the U.S. Department of Energy noted that more than 3.4 million families claimed about $8 billion in tax credits under the IRA in 2023, the first year that the they were available.

Robinson and Ricker, a retired construction manager who specialized in affordable housing, said the electric car and new water heater should save them money as well as leave them with a cleaner and healthier household.

The family qualified for $7,500 in federal tax credits for the electric vehicle, and Robinson said they’re saving about 60% of their previous annual gasoline costs with the new car. They also qualified for a tax credit amounting to 30% of the water heater installation cost, meaning they should receive $1,350 after they file taxes at the end of the year.

“So far, all of these new technologies have been a real step up,” Robinson said. “The cooking is better; there’s no indoor pollution. We’re not breathing fumes anymore.”

The decreased pollution is especially important, Robinson explained, not only for the environment but for Ricker’s health because he has asthma. Pollution can be one of the biggest triggers of asthma attacks.

Ricker noted that without the tax credits, he and his wife would not have been able to replace their 16-year-old water heater with the more energy-efficient system.

“Without this incentive from the IRA, I would not have done it economically,” Ricker said. “It would have been too far out of reach.”

The projects that Robinson and Ricker have undertaken are emblematic of a law that’s reshaping the environment across the country, said Adam Ortiz, the mid-Atlantic regional administrator for the U.S. Environmental Protection Agency.

“It’s a historic investment,” Ortiz said of the IRA. “It’s getting us to the place [where] we are truly responsible for our footprint on this earth.”

State Rep. Tarik Khan, a Democrat whose district includes a portion of Philadelphia, said he hopes more people take advantage of the tax credits.

“This is the two-year anniversary of the Inflation Reduction Act, and it’s incredible what the Biden-Harris administration has done, even in just this one bill,” Khan said. “As we know, the energy tax credits that are part of this bill are going to help us to reduce our greenhouse emissions by 40% by the end of the decade. But it also helps to lower costs for families, and I think it’s really a testament that this not only helps our environment, it also helps with health care stuff, too.”