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President Joe Biden signed the Inflation Reduction Act into law on Aug. 16. It’s a sweeping piece of legislation aimed at combating climate change, raising taxes on large corporations and lowering health care costs.
It’s unclear how effective the new law will be in actually tamping down record-high inflation.
An analysis by the University of Pennsylvania’s Penn Wharton Budget Model found that the legislation may eventually lower inflation by about 0.1 percentage points in about five years, a difference that’s “statistically indistinguishable from zero,” according to the analysis.
While the act may not immediately curb everyday consumer prices on things like food, it still contains several provisions that can help you save money.
The biggest savings are available for big-ticket green purchases and energy-efficient upgrades, though it will take a while for most Americans to realize these savings.
Here are four ways the Inflation Reduction Act could impact your family’s finances.
1. Energy-Efficient Home Improvement Rebates and Tax Credits
Tax credits and rebates could help American homeowners over $14,000 on new appliances and energy-efficient upgrades.
The scope of these rebates is pretty narrow, though you might be able to snag $840 off a new electric stove — not too shabby.
Here’s a roundup of appliance and equipment rebates. You could get up to:
- $840 for an electric stove, cooktop, range or oven. An electric heat pump clothes dryer also qualifies.
- $1,750 for a heat pump water heater.
- $8,000 for a heat pump for space heating or cooling.
You may notice heat pumps show up a lot. A heat pump is basically a high-efficiency system that heats and cools your home in lieu of a traditional HVAC system.
Heat pumps can range from about $4,000 to $7,500, so these rebates could save you thousands once the program rolls out.
And that may be a while.
States must apply and get approval for the funding first, and experts say it could take…
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