In 2023, more than 160,000 Pennsylvanian families saved more than $267 million on clean energy and energy efficiency investments
WASHINGTON – Today, in advance of the two-year anniversary of the Inflation Reduction Act, the U.S. Department of the Treasury (Treasury) released new data from the IRS and new analysis by the Office of Economic Policy showing that more than 160,000 Pennsylvanian families benefitted from more than $267 million in tax credits to lower the costs of clean energy and energy efficiency upgrades to their homes during 2023. Today’s announcement marks the first public release of data from 2023 tax filings showing the benefit of the Inflation Reduction Act’s clean energy tax incentives for consumers.
Nationwide, the number of families benefiting from these expanded credits for investments that lower their utility bills increased almost one third compared to tax year 2021, prior to passage of the Inflation Reduction Act, and the aggregate value of the credits increased by almost two thirds. The new data shows the Inflation Reduction Act is achieving its goal to lower both the upfront cost of clean energy and energy efficiency investments and monthly utility bills for American families.
In addition to upfront cost savings on home improvements, consumers will save on their energy bills for years to come. Recent research from U.S. national labs and analysis from Treasury’s Office of Economic Policy shows that after consumers adopt these upgrades, they can save hundreds or thousands of dollars per year on their utility bills, depending on the upgrades made to their homes. For example, household installing residential solar have saved a median of $2,230 annually, and households that install efficient heat pumps and improve building efficiency are expected to save up to $600, $1,200, or $3,100 per year, based on the type of heating and cooling system that is being replaced.
“The Biden-Harris Administration’s top economic priority is lowering costs for American families, and the Inflation Reduction Act is advancing that goal by making home energy upgrades more affordable and cutting monthly utility bills,” said U.S. Secretary of the Treasury Janet L. Yellen. “The law has lowered the cost of clean energy upgrades for more than 160,000 thousand Pennsylvanian families, saving them hundreds, if not thousands, of dollars annually on their utility bills for many years to come.”
“Thanks to the Inflation Reduction Act, Pennsylvania is experiencing a clean energy and manufacturing boom and Pennsylvanians are spending less on their prescription drugs, taxes, and more. This legislation invests in American industry, creates good jobs for Pennsylvanians, and ensures that the Commonwealth continues to power the Nation,” said Senator Bob Casey. “Pennsylvania communities and families are feeling the impacts of the Inflation Reduction Act and I will keep fighting for critical investments in our Commonwealth.”
“The Inflation Reduction Act serves as one of the most significant investments our country has ever made to advance the environmental industry, save families money, and create good-paying jobs,” said Representative Matt Cartwright (PA-08). “This historic legislation also provides incentives for firms to locate the next generation of renewable energy manufacturing in Northeast Pennsylvania, an area whose history was fueled by coal and is now poised for the next generation of manufacturing.”
“As we mark the second anniversary of the Inflation Reduction Act, its impact on Pennsylvania is undeniable. In fact, its impact on Chester and Berks Counties is firsthand evidence of its success,” said Representative Chrissy Houlahan (PA-06). “This generational investment continues to yield dividends across southeastern Pennsylvania, benefiting small business owners, seniors, and farmers alike. Just last month, I welcomed the Biden-Harris Administration to our community to talk about how the Inflation Reduction Act is boosting our agricultural economy – and that’s just one part of this historic legislation. By capping the cost of prescription drugs, reducing energy costs, creating new manufacturing jobs, and securing a cleaner future, this legislation fulfills our promise to combat climate change and build stronger communities. Simply put, the Inflation Reduction Act ensures that Pennsylvanians have new opportunities in an economy built for the long term."
Pennsylvanian families have claimed more than $149 million in credits for residential clean energy investments on 2023 tax returns filed and processed through May 23, 2024. This credit helps families afford investments in solar electricity generation, solar water heating, and battery storage, among others. Families have also claimed more than $118 million for energy efficient home improvements—which include heat pumps, efficient air conditioners, insulation, windows, and doors—during the same time span. These estimates are expected to increase as additional returns are filed and processed.
Home Clean Energy Investments Nationwide
- More than 750,000 families claimed investments in residential solar electricity.
Home Energy Efficiency Investments Nationwide
- More than 250,000 families claimed investments in electric or natural gas heat pumps.
- More than 100,000 families claimed investments in heat pump water heaters.
- Nearly 700,000 families claimed investments in insulation and air sealing.
Background
The Inflation Reduction Act provides incentives for consumers to lower their energy bills and shield themselves from future spikes in fossil energy prices. The Inflation Reduction Act:
- Extended and expanded the Energy Efficient Home Improvement Credit, providing a total credit of up to $1,200 annually for investments like installing insulation or efficient windows and doors, with a special credit of as much as $2,000 for electric heat pumps that provide super-efficient heating and cooling, including a $150 credit for a home energy audit conducted by an inspector to help determine the best home improvement options.
- Extended the Residential Clean Energy Credit, ensuring that households will be able to continue receiving a tax credit to cover up to 30% of the costs of installing, among others, rooftop solar and battery storage through 2034.
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