Latest news with #ACEEE
WIRED
a day ago
- Automotive
- WIRED
How to Use Clean Energy Tax Credits Before They Disappear
Jul 12, 2025 7:00 AM There are just a few weeks left to tap federal programs that make purchasing an EV, heat pump, or solar panels more affordable. Photograph:This story originally appeared on Grist and is part of the Climate Desk collaboration. The 'one big beautiful bill' that President Donald Trump signed into law on July 4 is set to upend many aspects of American life, including climate policy. The law, which Republicans backed en masse, not only derails the nation's efforts to reduce greenhouse gas emissions, it could also strike a blow to consumers' pocketbooks. From a climate perspective, the legislation's most significant rollbacks are aimed at industries such as renewable energy, not individuals. But there will be very real impacts for taxpayers hoping to decarbonize their homes. The 2022 Inflation Reduction Act, or IRA, provided tax credits for climate-friendly purchases ranging from heat pumps to solar arrays through 2032. That time frame has been cut to as little as a few months. 'This bill is going to take away a lot of assistance from consumers,' said Lowell Ungar, director of federal policy for the nonprofit American Council for an Energy-Efficient Economy. He noted that 2 million people used the home improvement tax credit in its first year alone. The good news is that the law does not affect the billions of dollars that the IRA already sent to state efficiency and electrification rebate programs and that much of that money will remain available beyond the federal sunsets. But, Ungar added, the tax credits can still save people thousands of dollars before they vanish. 'If consumers are able to make the investment now,' he said, 'it will help them out.' For those looking to act, here is a roundup of when credits will go away. Buy an EV Before October New electric vehicles that meet federal domestic manufacturing requirements qualify for a tax credit of up to $7,500. While credits on foreign-made EVs aren't offered directly to consumers, automakers do get them and often pass the savings along through leases. Used EVs under $25,000 that are purchased at a dealer are also eligible for up to a $4,000 credit. All of this goes away on September 30. There will be no credits after that. Ultimately, this will make new electric vehicles more expensive and put the technology further out of reach for low- to moderate-income Americans. The income caps on the EV credits still apply, limiting the benefit on new EVs to those households earning less than $300,000 and on used vehicles to those earning less than $150,000. There is an MSRP limit of $80,000 for new cars too. Strangely, the tax credit for installing an EV charger (up to $1,000) runs through June of next year. Make Home Improvements by the End of the Year The remarkably vast Energy Efficient Home Improvement Credit provides up to $2,000 toward qualified heat pumps, water heaters, biomass stoves, or biomass boilers. It offers another $1,200 toward efficiency upgrades such as insulation, doors, windows, and even home energy audits. These are going away on December 31. All items must be 'placed in service' by then to qualify, though a reminder: Tax credits lower your tax liability but don't come back as rebates. You must have a tax bill to benefit, which may not be the case for some low-income households. Pay for Solar This Year The most valuable IRA incentive being axed is the Residential Clean Energy Credit. It covers 30 percent of clean energy systems such as solar panels, wind turbines and geothermal heat pumps, and there is no cap. With the average cost of a solar system in the US just north of $28,000, that means a tax credit would be worth around $8,500. That credit vanishes at the end of this year, though the law refers to the 'expenditures' being made by then so that could mean paying for—but not necessarily installing—a system by then. As with other credits, Ungar suggests confirming any changes with a tax professional. He also said that the potential for higher tariffs is another reason to move quickly. But, he said, even after the credits go away, many of these improvements could still make financial sense over the long term. 'With or without the tax credit, these improvements bring energy savings that lower energy bills,' he said. 'In some cases, improvements are going to be a no-brainer regardless.'
Forbes
09-06-2025
- Business
- Forbes
Is The Juice Worth The Squeeze: Energy-Efficiency Projects Make Cents
Homeowners can have both energy efficient heating/cooling and savings with the help of an energy ... More analyst. With the burden of rising energy costs, many homeowners are feeling the pinch in their pockets. The National Foundation for Credit Counseling reports that 'Government agencies define utilities above 6% of your income as a high energy burden.' However, it is not just the high energy costs that are the issue, but also the site's energy consumption that is driving up the bill. But there is hope—energy efficiency projects can provide relief from this financial strain. According to the American Council for an Energy-Efficient Economy (ACEEE), the average U.S. household spends about 3.1% of income on energy, while low-income households spend more than 8%, with some exceeding 16%. To resolve high energy utilization, homeowners should look into home energy-retrofit projects that are cost-effective—meaning that the investment has a positive impact on the household budget. Take a look at the Forbes article in April titled, 'Our Energy Bills Are High, And This Is Why,' to learn about the 'why' behind high energy bills. After an energy audit, the building science practitioner should review the report with the homeowner. The report should capture all diagnostic testing and show where the customer should start investing. The energy-modeling software report should provide detailed information to empower customers to make informed decisions. The solutions often come with cost-benefit metrics such as 'Simple Payback,' 'Savings-to-Investment Ratio (SIR),' and 'Return on Investment (ROI),' all of which can give homeowners a sense of control over their energy usage and costs. Simple payback is a financial metric that calculates how quickly an investment is recovered. This may be important to some people, as money has more value today than it will in the future due to inflation. This concept is known as the 'Time Value of Money.' For commercial projects, the ideal goal is for a project to pay for itself within five years. In the residential sector, projects are considered fair if they pay for themselves within 10 years or less. Example: Retrofit costs $1,000 and saves $100 per year. Payback = (1,000/100) = 10 years The SIR metric indicates that a project will pay for itself. To calculate the SIR, divide a project's savings by its initial investment. The SIR considers the life cycle cost of the retrofit project. An SIR of 1 means that the project will pay for itself in its useful life. The higher the number, the more the project will pay for itself. SIR may not matter to some customers, as comfort may be what they value. For example, in the Midwest region of the country with short summers, an air conditioner, even if considered high efficiency, will not run long enough to offset its initial investment. Despite this, customers still want to be comfortable and will purchase the system anyway. $30,000.00 (existing system) - $20,000.00 (cost of the new system) = $10,000.00 (savings) $10,000.00 (savings) ÷ $5,000.00 (initial cost) = 2 SIR 2 SIR means the retrofit will pay for itself twice during its life cycle. The Annual Return is the interest rate your money earns on your retrofit project. It is similar to returns in a 401(k) or investment account. The Annual Return is the reciprocal of the SIR. To calculate the Annual Return, take the annual savings of a project and divide it by the initial investment of the project. Example: Retrofit costs $1,000 and saves $100 per year. Annual Return = (100/1,000) = 10% The energy savings from the project can often cover the financing payments, making the retrofit budget-neutral. In conclusion, energy-efficiency retrofit projects are not just practical—they are essential. They empower homeowners to lower utility costs, increase comfort, and invest wisely in their property's future. With supportive data, financing options, and a clear return on investment, the case is clear: energy efficiency is a smart financial move and a step toward a more sustainable, affordable lifestyle.
The Guardian
07-05-2025
- Business
- The Guardian
Utility bills could rise as Trump's EPA to end Energy Star program, experts warn
US customers could face higher energy bills, experts have warned, amid reports that the Environmental Protection Agency (EPA) plans to end the Energy Star program whose blue labels have certified energy efficiency on home appliances for more than 30 years. 'If you wanted to raise families' energy bills, getting rid of the Energy Star label would be a pretty good way,' said Steven Nadel, executive director of the non-profit research organization the American Council for an Energy-Efficient Economy (ACEEE). 'This would take away basic information from consumers who want to choose cost-saving products easily. There's a reason this program has been so popular with consumers and manufacturers alike.' In March, hundreds of companies and groups signed a letter urging the EPA administrator, Lee Zeldin, to maintain full funding and staffing levels in the program. The reports of its elimination come after Donald Trump has railed against showers and toilets that conserve water. In April, he signed an executive order to 'restore shower freedom'. The plans to close the popular Energy Star program, first reported by CNN and the Washington Post, would come as part of wider agency cuts and the dissolution of the EPA's office of atmospheric protection (OAP) and the office of air quality planning and standards. The plans to close the popular Energy Star program, first reported by CNN and the Washington Post, came after an OAP staff meeting on Monday. The New York Times reported that staff were told: 'The Energy Star program and all the other climate work, outside of what's required by statute, is being de-prioritized and eliminated.' The EPA on Tuesday declined to comment specifically on Energy Star but said: 'EPA is delivering organizational improvements to the personnel structure that will directly benefit the American people.' In the letter sent to the EPA in March, nearly three dozen trade industry groups and appliance companies including the Chamber of Commerce, Bosch, Carrier and the Air-Conditioning, Heating, and Refrigeration Institute said Energy Star was a good 'non-regulatory' collaboration between the private sector and federal government. 'Eliminating it will not serve the American people. In fact, because the Energy Star brand is highly recognizable to consumers, it is likely that, should the program be eliminated, it will be supplanted by initiatives that drive results counter to the goals of this administration such as decreased features, functionality, performance, or increased costs.' skip past newsletter promotion Sign up to Down to Earth The planet's most important stories. Get all the week's environment news - the good, the bad and the essential Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion Other OAP programs that are uncertain amid the reorganization include the voluntary methane reporting program for the oil and gas sector. Democratic senator Jeanne Shaheen of New Hampshire said ending the program would raise costs for consumers. 'Let's be clear: Cutting the popular Energy Star program – which helps everyday households and businesses save on their energy bills – would mark another rash attempt by this administration to line the pockets of billionaires and utility companies at the expense of hardworking Americans,' she said in a statement. Reuters contributed to reporting
Associated Press
18-04-2025
- Business
- Associated Press
New Jersey Jumps to Top 10 in National Rankings for Energy Efficiency
Originally published by ROI-NJ New Jersey is being recognized as a national leader in energy efficiency programming and outcomes in the American Council for an Energy Efficient Economy 's (ACEEE) 2025 State Energy Efficiency Scorecard, which ranks all fifty states and Washington D.C. New Jersey ranked #8, returning to the top 10 for the first time since 2008 and was listed as one of the most improved States. 'We are thrilled to earn this major achievement with our rankings in the 2025 ACEEE State Scorecard,' said NJBPU President Christine Guhl-Sadovy. 'This confirms our State's investments in efficiency programs are among the best in the nation at delivering results by reducing energy demand, delivering energy savings, and securing long-term bill stabilization for New Jersey ratepayers.' 'Today's announcement underscores the tremendous strides New Jersey has made in the years following the signing of the Clean Energy Act into law by Gov. Murphy,' said Eric Miller, executive director of the Office of Climate Action and the Green Economy. Continue reading here. Visit 3BL Media to see more multimedia and stories from PSEG
Yahoo
11-03-2025
- Business
- Yahoo
How closing the ‘spark gap' can boost heat pump adoption
For most U.S. homes, heat pumps are a no-brainer: They can lower energy bills and eventually pay for themselves all while slashing carbon emissions. But the economics don't work in favor of heat pumps for every home — and particularly not for those in states that have high electricity prices relative to those of fossil gas. Adjusting the structure of customer electricity rates could turn the tables, according to a report out today from the nonprofit American Council for an Energy-Efficient Economy, or ACEEE. The ratio of average electricity prices to gas prices (both measured in dollars per kilowatt-hour) is known as the 'spark gap' — and it's one of the biggest hurdles to nationwide electrification. A heat pump that is two to three times as efficient as a gas furnace can cancel out a spark gap of two to three, ensuring energy bills don't rise with the switch to electric heat. But in some states, the gulf is so big that heat pumps can't close it under the existing rate structures. Worse, heat pump performance can decrease significantly when it's extremely cold (like below 5 degrees Fahrenheit), so without incentives, the economic case is harder in states with both harsh winters and electricity that's much more expensive than gas, like Connecticut and Minnesota. In these places, heat pump adoption is 'hit by double whammy,' said Matt Malinowski, ACEEE buildings director. The weather might be hard to change, but the spark gap is malleable: Utilities, regulators, and policymakers can shape electricity rates. By modeling rates for four large utilities in different cold-climate states, ACEEE found that particular structures can keep energy bills from rising for residents who switch to heat pumps, without causing others' bills to go up. Flat electricity rates are a common practice. They're also the worst structure for heat pumps, Malinowski said. When utilities charge the same per-kilowatt-hour rates at all hours of the day, they ignore the fact that it costs more to produce and deliver electricity during certain hours. That's because, like a water pipe, the power grid needs to be sized for the maximum flow of electrons — even if that peak is brief. Meeting it requires the construction and operation of expensive grid infrastructure. Flat rates spread the cost of these peaks evenly across the day rather than charging customers more during the high-demand hours that cause a disproportionate amount of grid costs. But heat pumps aren't typically driving peak demand — at least, not for now while their numbers are low. Demand usually maxes out in the afternoon to evening, when people arrive home from work, cook, do laundry, and watch TV. Households with heat pumps actually use more of their electricity during off-peak hours, like just before dawn when it's coldest, than customers with gas, oil, or propane heaters. Heat pumps 'provide the utility a lot of revenue, and they do that at a time when there isn't that much electricity consumption,' Malinowski said. Under a flat-rate design, cold-climate heat pump owners 'are basically overpaying,' he added. 'Adjusting the rates to better reflect their load on the system — and the benefits to the system that they provide — is only fair.' A rate design that bases charges on when electricity is used would help course-correct. Known as 'time-of-use,' this structure charges more for power consumed during periods of peak demand and less for power consumed at other times, or 'off-peak,' coinciding with heat pumps' prime time. Utility ComEd serving the Chicago area is working to finalize time-of-use rates for households, joining the ranks of several other U.S. providers that already offer this structure, like Xcel Energy in Colorado, Pacific Gas and Electric in California, and Eversource in Connecticut. Demand-based rates are another way of accounting for a customer's peak demand profile and can help reduce a heat pump owner's energy bills. This approach tacks on fees scaled to a customer's peak demand that month. If it's 3 kilowatts, and the demand charge is $10 per kilowatt, the fee will be $30. But importantly, this structure also lowers the rates charged for the total volume of electricity. Even though households switching from gas to heat pumps under such a program would see higher charges for peak demand than before, Malinowski said 'they'll be using so much more electricity overall that they end up benefiting much more from that lower volumetric [per-kilowatt-hour] charge.' As a result, their energy bills can be lower than with a flat-rate program, the report finds. Winter discounts also help heat pumps make financial sense. In most states, electricity usage waxes in the summer — when people blast their air conditioners — and wanes in the winter, when many residents switch to fossil-fuel heating. Some utilities offer reduced electricity prices in winter to drum up business, a structure that benefits households who heat their homes with electrons. Xcel in Minnesota drops its June-through-September summer rate of 13 cents per kilowatt-hour to 11 cents per kilowatt-hour during the rest of the year for all customers. For those with electric space heating, including heat pumps, the rate is lower still: 8 cents per kilowatt-hour — a discount of 39% from the summer rate. According to ACEEE's modeling, the winter discount alone can save Minnesota Xcel customers in single-family homes on average more than $350 annually once they swap a gas furnace for a heat pump. Combining the winter discount with existing time-of-use rates or simulated demand-charge rates (given in the study) can further reduce annual bills by another $70. In Colorado, another state ACEEE analyzed, Xcel provides both time-of-use rates and a much shallower winter discount of about 10%. Even taken together these structures aren't enough to close the spark gap for heat pumps. Pairing that discount with demand-based rates wouldn't do the trick either, the team found. Only when they used the much steeper discount that Xcel deploys in Minnesota were they able to keep customers' modeled heating bills from climbing when they switched to heat pumps. One more option for utilities and regulators: discounts specifically for customers with heat pumps. More than 80 utilities in the U.S. currently offer discounted electric heating rates, with 12 providing them specifically for households with heat pumps, according to a February roundup by climate think tank RMI. Massachusetts regulators approved a plan by utility Unitil last June to offer a wintertime heat-pump discount — the first in the state — and directed National Grid to develop one, too. Unitil's discount amounts to at least 20% off the regular per-kilowatt-hour rate, depending on the plan customers choose. Colorado policymakers are also requiring investor-owned utilities to propose heat pump rates by August 2027. The takeaway from ACEEE's results is that in some states, the above rate designs could be promising avenues to ensure switching to heat pumps doesn't raise energy bills for most single-family households. But in other cases, additional policy might be needed. Connecticut's electricity prices are so high that these rate structures weren't enough to close the spark gap, the authors found. They recommend policymakers consider broader changes like putting a price on carbon emissions, implementing clean-heat standards that require utilities to take steps toward decarbonized heating, or investing in grid maintenance and upgrades to make electricity more affordable — for all customers.
