When you'll see the climate bill's impact
The most sweeping climate change legislation in U.S. history is on its way to President Biden's desk after clearing the House Friday in a 220-207 party-line vote.
Why it matters: In addition to huge investments for clean energy technologies, the bill will eventually help shift where our energy comes from, the appliances we purchase, how we heat and cool our homes, which cars we drive, and even the jobs we have.
The big picture: The legislation will attempt to reduce greenhouse gas emissions through billions of dollars in incentives, grants and other support to develop clean energy and emissions-reducing technologies.
- Those technologies include hydrogen, energy storage devices and direct air capture that pulls CO2 from the atmosphere.
- But none of these will be visible to most people in the short term. Instead, how much it affects you will depend on your economic status and your stage in life.
- If you're in the market for an electric vehicle or a new water heater, you'll see this bill's effects quickly. But if you don't own a home and aren't going car shopping anytime soon, it may take longer for you to notice its footprint.
Zoom in: The bill's changes and expansion of electric vehicle tax credits have received the most media attention to date, but its home electrification provisions are more significant, experts tell Axios.
- For the country's 122 million households, the bill contains about $100 billion for electrification programs at the neighborhood level, according to Rewiring America, a nonprofit group whose proposals helped shape some bill provisions.
- These are designed to tilt the playing field toward the most energy-efficient option when you need to make a big purchase, such as for a new water heater or air conditioner, by making electric appliances cheaper.
- Because of the way these benefits are structured, it's likely they will affect you at some point in the next decade.
What they're saying: "This bill is effectively $100 billion of investment in enabling American families to go from being reliant on fossil fuel machines to being able to access efficient electric machines. And that's across the board," Ari Matusiak, CEO of Rewiring America, told Axios in an interview.
Between the lines: Matusiak's group has calculated that a household could see annual savings of up to $1,800 if they install a modern electric heat pump to replace their furnace and a heat pump for water heating, and buy an electric vehicle and rooftop solar panels.
- The bill includes incentives to make these upgrades more affordable, and the financial support would be greater for low- and middle-income households.
- Those incentives would include a 30% tax credit up to $2,000 toward the cost of a heat pump space heater, as well as money to upgrade a home's electrical panel should it be insufficient to handle the increased load of the new appliances, Dan Lashof of the World Resources Institute said in an interview with Axios.
- Heat pumps would also become cheaper because there would be more of them available, Lashof said, since the bill provides $500 million for manufacturing them under the Defense Production Act.
- The measure will also increase the tax credit for rooftop solar installations from 10% to 30% of the cost, retroactively applied by one year.
Yes, but: For renters, it may take longer for the new law to be tangible.
- The bill's incentives could prompt property managers and builders to install more efficient appliances when renovating rental units or building new ones, which could lower electric and heating bills.
- Depending on the bill's implementation and market conditions, the bill could help reduce energy costs overall by 2030 as more clean energy comes online, edging out fossil fuels economically, Ben King of the Rhodium Group, a consulting firm, told Axios in an interview.
- This would be noticed by all consumers, not just the ones shelling out for new appliances, King said.
The other side: The bill's congressional opponents argued it would actually raise costs on consumers, not lower them, and that it would make domestic fossil fuel production more expensive, too.
- If they are proven correct, the upsides for some could be more muted, or even negated.