- The IRA will result in $14,000 in consumer rebates for families to buy heat pumps or other energy-efficient home appliances.
- It will also preserve the American Rescue Plan’s premium tax credit supports for Affordable Care Act (ACA) plans by extending them through 2025.
- The IRA includes a number of provisions that will save small business owners money on energy costs.
On August 16, President Joe Biden signed the Inflation Reduction Act (IRA) into law, which many call the most comprehensive legislation ever to fight climate change. The IRA will result in $14,000 in consumer rebates for families to buy heat pumps or other energy-efficient home appliances, saving families at least $350 per year.
Lowering Costs for Small Businesses
The White House reported that the IRA will reduce costs for small businesses by maintaining lower health care costs, supporting energy-saving investments, and bolstering supply chain resiliency. It will also preserve the American Rescue Plan’s premium tax credit supports for Affordable Care Act (ACA) plans by extending them through 2025.
The ACA Marketplace serves as an important source of coverage for 2.6 million small business owners and self-employed adults, according to a recent analysis of 2021 tax data issued by the Department of Health and Human Services. This investment will continue to spur new business starts and job creation, as entrepreneurs may take the leap of starting a business without the risk of going uninsured.
Cutting Energy Costs for Small Businesses
The IRA includes a number of provisions that will save small business owners money on energy costs:
Small businesses can receive a tax credit that covers 30% of the cost of switching over to low-cost solar power — lowering operating costs and protecting against the volatile energy prices that are currently squeezing small businesses.
Lower Utility Bills
Small business building owners can receive a tax credit up to $5 per square foot to support energy efficiency improvements that deliver lower utility bills.
Small businesses that use large vehicles like trucks and vans will benefit from tax credits covering 30% of purchase costs for clean commercial vehicles, like electric and fuel cell models.
Making History with Climate Change Initiatives
This new bill could have a significant impact on retailers, and will likely bring about some far-reaching changes. Not only is the IRA meant to help residents save on energy bills and health care, it also makes the largest investment in climate action taken by the U.S. government in history, with a whopping $369 billion toward energy security and climate change initiatives.
According to Modern Retail, the investment is estimated to help reduce carbon emissions by about 40 percent by 2030, and it is doing so with a suite of incentives and tax credits affecting both consumers and manufacturers alike. Retail experts say the move could have a domino effect by increasing the popularity of goods like electric cars and efficient appliances while ushering in more domestic clean energy production.
The pandemic has put many different small businesses and communities at risk of devastation and disruption, and the goal of the IRA is to help them out while also combating the climate crisis. With more economic stability for Main Streets across the country, small businesses can once again begin to focus on growth instead of just survival.