Signed into law one year ago today, the Inflation Reduction Act’s is the biggest and most ambitious climate law ever passed by a national government.
Today is the one-year anniversary of the historic Inflation Reduction Act being signed into law. And here at Sealed, we’re excited to see the transformation that it brings for generations to come.
In 1933, the New Deal transformed the U.S., bringing together public and private sectors to take on the huge task of repairing the catastrophic state of the national economy. Their combined efforts through programs like Works Progress Administration resulted in:
- 8.5 million jobs
- The construction of more than 650,000 miles of roads
- 125,000 public buildings
- 75,000 bridges
- 8,000 parks (1).
New Deal programs directly and indirectly led to massive growth in the private sector. In addition to economic stimulus and job creation, New Deal programs delivered many other benefits to American companies and citizens.
The Civilian Conservation Corps, for one, planted over 3 billion trees and expanded our state and national park systems (2).
Signed into law one year ago today, the Inflation Reduction Act’s (IRA) stated purpose was to curb accelerating inflation, but it also happens to be the biggest and most ambitious climate law ever passed by a national government.
The IRA happens to be the biggest and most ambitious climate law ever passed by a national government.
Just like the New Deal, the IRA will bring benefits to people and the planet while also creating “over 9 million clean energy and climate-related jobs over the next decade.”
Ninety years after the New Deal, many of the energy-saving incentives from the IRA are about to take effect. Homeowners are now getting valuable support for making their homes healthier, more comfortable, and more energy-efficient.
At the same time, the IRA is opening up massive business opportunities for public and private partnerships. Many companies, including Sealed, have new pathways to enhancing their triple bottom line—a giant leap toward maximizing impact on the people we serve, the planet we live on, and our company’s profitability.
With its many supports for clean energy, energy efficiency, and greenhouse gas (GHG) emissions reduction, the IRA incentivizes stronger triple-bottom-line performance for businesses.
In doing so, the policy will improve the lives of millions of people and decrease GHG emissions by up to 40% below 2005 levels by 2030.
Companies like Sealed will get new support for doing what they are designed to do: bring comfort and energy efficiency to homeowners, all while decarbonizing homes and contributing to progress toward global net zero goals.
Good for people
The rising cost of natural gas, growing awareness of the climate crisis, a summer of extreme weather events, inflation, and other factors have compelled more homeowners to look at new ways to:
- Climate-proof their homes
- Reduce their energy use
- Improve the comfort of their homes
- Electrify their appliances
With the IRA significantly reducing the cost of those improvements with rebates and tax credits, millions more Americans will be able to consider home weatherization and energy efficiency improvements as an option and will be more motivated to make these upgrades.
No matter what types of fuel or appliances homeowners use, improving efficiency is a guaranteed way to use less energy and reduce waste without changing living habits, so weatherization is the perfect first step.
Home electrification—especially replacing natural gas, heating oil, or propane heating systems with heat pumps—layers on additional cost reduction and comfort benefits while taking a big bite out of household GHGs. It also opens the door to switching to all-clean energy and completely eliminating fossil fuel usage from the home.
Here’s how homeowners will benefit from the IRA:
- Starting in 2024, the IRA will award up to $14,000 in direct consumer rebates to income eligible families who buy heat pumps or other energy-efficient home appliances, saving them an average of $350 per year in energy bills.
- For the next 10 years, homeowners will be eligible for a tax credit of $2,000 to swap traditional HVAC out for heat pumps or $1,200 to upgrade insulation.
The IRA isn’t just good for your wallet, it’s also good for your health.
Reduced consumption of fossil fuel-generated energy means better air quality for all, contributing to improved public health.
And those who electrify their homes will enjoy better indoor air quality as they eliminate the potentially harmful emissions from gas stoves and other fossil-fuel-burning appliances.
The IRA isn’t just good for your wallet, it’s also good for your health.
By retrofitting their homes, homeowners can live in healthier, more comfortable—not to mention more sustainable—homes, all while saving money.
With a full home retrofit, homeowners can reduce their energy waste and carbon footprint.
Good for the planet
The electric home appliance technology available today is highly effective at reducing energy consumption and can make a big dent in GHG emissions if widely deployed.
Heat pumps, for example, can both heat and cool your home, do a better job of keeping your home at a constant, comfortable temperature than an oil or natural gas furnace, and use less energy to do so.
More and more homebuyers are demanding energy-efficient homes to reduce their energy consumption and carbon footprint (3).
The home weatherization work (when combined with heat pump retrofits) that we do at Sealed can cut a home’s energy use by over 50% and its emissions by 32% to 56%, depending on the home’s age and regional climate.
Over a 20-year period, each home transformed by Sealed is equivalent to taking 17 cars off the road for a year—or four metric tons of carbon emissions avoided.
With the IRA incentives, homeowners have the clearest path ever to an energy efficient home that can make a huge positive impact on the climate (even more than switching from a gasoline car to an electric vehicle, in some cases).
In the US, people use 30% more energy to run their households than their personal vehicles.
Consumer Reports
Good for profits
There is no doubt about it: The electrification trend is here to stay.
Americans are becoming more aware of their home energy use than ever before. And with high natural gas prices and more cities requiring carbon-free heat in new construction, the interest in and demand for electrification will continue to grow.
A Kleiman Center for Energy Policy report showed that the number of U.S. homes heated with electricity has increased steadily from 1% in 1950 to 40% in 2020 (4).
This increase in demand results in more job opportunities, more manufacturing output, and new innovation.
The IRA’s incentives encourage more contractors and installers to take on these projects, manufacturers to increase production, and companies to build better technology. And that all translates to a lot of economic activity—with benefits to the HVAC and construction industries, households, and local communities.
Nearly 100 years ago, the New Deal transformed American society by launching historic conservation and business initiatives and triggering the biggest buildout of infrastructure in our nation’s history.
At Sealed, we believe the IRA can have the same impact on an often overlooked, yet critical piece of American infrastructure: our homes.
But it all comes down to how the IRA will be implemented by the federal executive agencies, states, PUCs, utilities, and other organizations on the ground.
As David Kolata, Vice President of Policy at Sealed explained, with so much on the line, failure is not an option. Congress has done its job, and it is now in our hands to ensure that we work together to accelerate this crucial transition.
Once the funding and programs in the IRA are deployed and combined with public private partnerships, major benefits to people, the planet, and profits for companies like Sealed are all but assured.