How you can cut energy costs through the Inflation Reduction Act – The Mercury News

by | Aug 18, 2022 | Energy

The Inflation Reduction Act signed by President Biden this week aims to shift America toward a greener future by lowering the cost of electric vehicles, energy-efficient appliances and rooftop solar panels.Many consumers will benefit. But it’s complicated — because limitations apply. You will get breaks, but most will come at tax time.
For instance, the Model Y is the only Tesla that will qualify for the next $7,500 tax credit. Why? Because the other models cost too much. Or the batteries that run the electric vehicles come from China. And there are income thresholds to qualify for the tax break.
The legislation is 730 pages of dense legalese. Many details are yet to be finalized.
We extracted the information that will be most helpful to people seeking to make climate-friendly purchases.
Electric vehicles
Buyers of new electric, plug-in hybrids and hydrogen fuel-cell vehicles will get a tax credit worth up to $7,500, depending on the battery. A rebate of $3,750 will be paid if at least 50% of battery components are produced in the U.S. or Free Trade Agreement countries, and an additional $3,750 will be paid if at least 40% of battery minerals originate in the U.S. or FTA countries. Starting in 2024, consumers can take that tax credit as a point-of-sale rebate at the dealership.
But only …

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