by Alison Mitchell, Co-Executive Director, New Jersey Conservation Foundation
Interested in saving money on home energy bills? How about helping to fight climate change by reducing your carbon footprint? Or ensuring that the New Jersey communities most affected by environmental pollution get justice and help?
If so, the federal Inflation Reduction Act (IRA) of 2022 may have something to offer you – and your larger community.
A recent panel discussion moderated by the New Jersey League of Conservation Voters highlighted the many ways funding through the Inflation Reduction Act can be accessed by low- and middle-income families, along with community groups, schools, churches, nonprofit organizations and local governments.
“This is the biggest and boldest investment in our nation’s history – ever – that is taking action on climate change,” said Ed Potosnak, executive director of the New Jersey League of Conservation Voters. The law is projected to cut greenhouse gas emissions by 40% by 2030, positioning the United States to meet climate goals while investing in the economy.
The “Affordable Clean Energy Plan” within the IRA works by creating financial incentives for individuals and community organizations to invest in greener choices – whether it’s a family switching to a geothermal home heating system, or a school interested in moving to electric school buses.
“The IRA is paving the way for a cleaner and more resilient future, and it demonstrates that environmental policy can be a win-win for both our wallets and the planet,” said Potosnak.
At the same time, funding through the IRA’s “Thriving Communities Program” is advancing environmental justice for underserved and overburdened communities.
Thriving Communities grants are available for projects aimed at preventing and remediating pollution, improving climate adaptation and resilience, mitigating the urban heat island effect, and improving public health. Grants will also help train workers from disadvantaged communities for well-paying jobs in fields related to the environment and climate.
Consumer Incentives
The consumer clean energy incentives come through a combination of tax credits, rebates, and lower energy bills due to improved efficiency.
Millions of New Jerseyans are already eligible for tax credits, which make it more affordable to purchase an electric vehicle, install clean energy home heating systems, weatherize homes, and upgrade to high efficiency appliances. A tax credit is a dollar-for-dollar amount taxpayers can claim on their tax returns to reduce the income tax they owe or increase their refunds.
Rebates are not yet available in New Jersey, but the system is expected to be up and running by late 2024 or early 2025. Rebates differ from tax credits in that they will be given immediately, with no need to wait until tax returns are filed.
Here are some of the tax credits currently available under the program:
- Up to $7,500 on a new electric vehicle, up to $4,000 on a used electric vehicle, and up to $1,000 on an electric vehicle charger.
- A 30% tax credit on the cost of installing clean home energy systems, such as rooftop solar panels, geothermal heat pumps, battery storage systems, and small wind turbines.
- Up to $3,200 for weatherization home improvements to save energy. These include a home energy audit, new exterior doors and windows, insulation, and an upgraded electrical panel.
- Up to $2,000 off a heat pump water heater.
Want to know if you’re eligible for these incentives? Go to https://homes.rewiringamerica.org/calculator and fill in information about your zip code, household income, and the types of improvement projects you’d like. The calculator will provide detailed information about currently available tax credits, and rebates and upfront discounts that are expected to go into effect soon.
Environmental Justice
The panel discussion also outlined the ways IRA programs can help communities reduce pollution and become healthier. Jordana Vanderselt, director of operations for the organization WeAct for Environmental Justice, noted that 40% of the overall benefits of IRA must flow to marginalized, underserved or overburdened communities. WeAct has been designated as the regional hub for New Jersey and New York.
WeAct doesn’t carry out projects itself, but acts as a resource to help community groups find out what grants are available through the IRA, how to apply for them, how to design projects, how to develop partnerships with other organizations, how to engage the public and interact with local government, and how to manage grants and projects.
IRA funding is available for many kinds of initiatives, including building community gardens in urban areas, planting shade trees in cities to reduce the urban heat island effect and improve air quality, and turning parking lots into “pooling zones” to reduce flooding. All projects have a workforce development component, with training available to provide community members with the knowledge and experience to find well-paying jobs.
Could your community benefit from the Thriving Communities Program funding? Visit www.weact.org/tctac/training to find out more.
New Jersey is a state that is experiencing many impacts from environmental pollution and climate change. What’s more, not all communities are experiencing impacts equally. The IRA programs offer New Jersey a chance to reduce greenhouse gases, lower consumer energy bills, and help marginalized communities get the justice they deserve!
To review a recording of the New Jersey League of Conservation Voters’ panel discussion, go to https://youtu.be/Hp4POr0rEzg. New Jersey Conservation Foundation is pleased to have been a co-sponsor of the webinar.
And for information about preserving New Jersey’s land and natural resources, visit the New Jersey Conservation Foundation website at www.njconservation.org or contact me at [email protected].