Energy efficiency tax credits that lower costs for American households and businesses would be terminated under a key legislative proposal released in the U.S. House of Representatives today. The plan from the U.S. House Committee on Ways and Means, expected to be considered in the committee this week, would be part of a massive tax-related reconciliation bill that could pass the Senate with a simple majority.
The proposal includes provisions eliminating tax credits for home energy efficiency improvements, new energy-efficient homes, and electric cars and trucks, among others.
“Canceling these tax credits would raise monthly costs for American families and businesses,” said Steven Nadel, executive director of the American Council for an Energy-Efficient Economy. “This proposal would make it harder for homeowners to make energy improvements that lower their utility bills and improve their comfort. It would reduce builders’ incentive to construct efficient homes with low monthly energy bills. It would make it harder for individuals to use electric cars, and businesses to use electric trucks, which can both lower monthly costs.”
The proposal includes eliminating the following credits:
The Energy Efficient Home Improvement (25C) credit helps homeowners make improvements that save energy and reduce their energy bills, such as installing insulation or highly efficient HVAC systems. The credit has been used by millions of households. ACEEE has estimated that it helps families save an average of $130 a year. More information is available in an ACEEE fact sheet.
The New Energy Efficient Home (45L) credit provides an incentive to builders to construct energy-efficient new houses and apartments. ACEEE estimates that the credit will spur the construction of over three million qualifying homes, saving homebuyers an average of $450 in energy costs annually. More information is available in an ACEEE fact sheet.
The Commercial Clean Vehicle (45W) credit helps businesses purchase electric trucks and cars, which can lower their total operating costs.
The New Clean Vehicle (30D) credit helps individuals purchase new electric cars, while the Used Clean Vehicle (25E) credit helps individuals purchase used electric cars. Both can reduce total costs thanks to lower operating expenses.
Separately, a proposal late Sunday from the U.S. House Committee on Energy and Commerce for measures to include in the same bill also includes numerous attacks on energy efficiency progress. It would repeal or rescind unobligated funds from several major efficiency programs created by the Inflation Reduction Act and repeal clean car and truck standards.
