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It could cost less to 'go green' under the Inflation Reduction Act

Tax deductions and rebates could incentivize some to install solar panels, buy an electric vehicle, or upgrade faulty appliances.

SAN DIEGO — After passing in Congress and being signed into law last week by President Biden, the Inflation Reduction Act is now the most ambitious climate spending bill in U.S. history – devoting over $300 billion into energy and climate reform.

But what kinds of incentives – whether they be tax credits or rebates – can actually be passed onto the consumers? 

One overarching goal of the bill is to make energy in general more affordable by people upgrading their homes to more environmentally friendly technology and incentivizing consumers to use less of it. 

This means beyond any actual changes in your home, you could see the impact of lower electricity bills in the long run. But, if there are changes you're planning on making in your home, you could save plenty of money by using the bill to your advantage. 

You can start with $14,000 in money back for switching to electric appliances over gas, or upgrading existing appliances. That would mean upgrading faulty appliances or better-insulating your home. 

For example, the already hot electric vehicle market could get hotter with $7,500 in tax credits for purchasing a new electric vehicle. You can also get up to $4,000 for buying it used.

Now, keep in mind, there are some pretty strict guidelines based on the manufacturer, the timing of the purchase, and the income of the consumer. 

For example, limits apply to consumers buying a new EV based on the company you're buying it from, how many have already been sold, and how much money you make. 

Many of the rebates are also geared toward low-income communities, where in some cases 100% of the transition toward electric appliances could be covered by rebates. 

The bill hopes to ease the transition from gas to electric for communities that have historically been marginalized in the move toward environmentally friendly energy.

According to CBS News, "the bill specifically benefits low, moderate and middle-income families," said Mark Wolfe, executive director of the National Energy Assistance Directors' Association. "It helps families transition to an all-electric environment."

If you're looking to install solar panels, you can expect 30% of the cost to be deducted from your taxable income. 

CBS News also reports that these changes and savings will be spread out, meaning you can take advantage of tax breaks and rebates for over a decade moving forward. That means no need to rush to change as quick as possible.

All of these changes come with the goal of diversifying power to the grid, eventually depending more on clean energy and net zero emissions.  

WATCH RELATED: Inside the Inflation Reduction Act and how it could help San Diego  

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