WASHINGTON – Electrification Caucus Senate Co-Chairs Martin Heinrich (D-N.M.) and Tina Smith (D-Minn.) participated in an “Electric Explainer,” a virtual event hosted yesterday by Rewiring America to discuss the historic climate provisions included in the Inflation Reduction Act, their impacts on lowering costs for American households, and how this generational investment would transform America’s energy and climate trajectory.
“The clean energy and electrification investments that we ultimately secured in the Inflation Reduction Act of 2022 represent by far the most significant steps that Congress has ever taken to spur the widespread deployment of highly-efficient, fully electric and climate pollution free technologies. These electric technologies from air source heat pumps for home heating to induction stovetops and electric clothes dryers have already leapfrogged their fossil fuel-powered alternatives in terms of both efficiency and performance. Because these electric technologies are more efficient and less expensive to operate, they will also help families across the country realize significant savings on their energy bills. This is particularly important at a time when so many Americans have been experiencing the pinch from inflation at the gas pump and in their gas and utility bills. We have moved mountains in the last year, and we are on the verge of getting something very deeply meaningful to the President’s desk,” said Heinrich.
“The Inflation Reduction Act of 2022, which Senate Democrats are on the verge of passing, is the most significant action to fight the climate emergency, to lower costs for Americans and to put U.S. workers and manufacturers at the forefront of a clean energy future. This legislation will be good for the economy, creating over 1.4 million jobs by building out domestic supply chains and manufacturing. It will also be good for our health, lower air pollution caused by fossil fuels will save lives, estimates are somewhere between 3,700 and 3,900 premature deaths will be averted. The Inflation Reduction Act makes the upfront transition to clean, electric appliances for example more within reach and cost effective for folks who don’t have thousands of dollars sitting around in their savings account. This bill will make it possible for folks to make the clean energy transition. With more clean power we don’t need to worry as much about the geopolitics that have caused so much of the recent rapid inflation in fossil fuels. We have to get it done now, and I look forward to celebrating once we have got this over the finish line,”said Smith.
The Inflation Reduction Act includes a new rebate program that mirrors Senator Heinrich’s Zero-Emission Homes Act to provide upfront, point-of-sale rebates for the purchase and installation of electric appliances and equipment in single-family homes and multifamily buildings, with additional support for low- and moderate- income households.
The latest research from Rewiring America indicates electrification provisions in the Inflation Reduction Act will enable one million low- and moderate-income households to go electric. Combined with electrification provisions offering tax rebates for American households, the Inflation Reduction Act will reduce U.S. carbon pollution 40% below 2005 levels by 2030.
“Upon its passage, the Inflation Reduction Act represents the future of American energy independence. Where our current system is controlled by petro-state dictators and big oil, the landmark Inflation Reduction Act represents an alternate path forward. Key electrification provisions of the IRA offer savings to American households, through direct rebates, including relief to low-and moderate income families, and making electric appliances and vehicles more accessible and affordable. By passing this historic investment in electrification, leaders in Washington can provide Americans immediate relief from soaring energy costs and runaway inflation, as well as cut our never-ending reliance on fossil fuels,” said Ari Matusiak, Rewiring America CEO.
“We are on the verge of an absolutely transformative bill. This is the bill we have been waiting in many ways for decades for Congress to actually pass. Efficiency is electrification. If we want to save energy in our society, we need to electrify everything. It turns out when we burn fossil fuels we lose about half of the energy, every step along the way. The Inflation Reduction Act will put us on a pathway to clean electricity, and electrification. That pathway is going to allow us to tackle the climate crisis by solving 75% of our current carbon pollution. We are going to save Americans across the country $1,800 per year on their energy bills if they get access to these clean technologies such as an electric vehicle, heat pump, heat pump hot water heater, induction stove and even solar panels. These clean energy investments are going to change the game. We are going to see clean electricity at a pace and scale we have never seen before. We are going to see clean and electric machines rolled out all across this country, and that’s absolutely critical. Our entire mission at Rewiring America is to electrify a billion machines in this country, so we cannot wait. We have got to get off the fossil fuel pathway, and into the clean energy future, creating American jobs in this country. This is a transformative bill, we are talking about creating the industries in the United States, and that is going to make it easier for us to get the next clean energy investment through Congress,” said Dr. Leah Stokes, Senior Policy Counsel for Rewiring America.
Senator Heinrich’s remarks as prepared for delivery are below:
Thank you so much for joining us.
Rewiring America has been a tremendous partner in our effort to advance the vision of widespread electrification in the U.S.
And we have a growing and highly motivated coalition of support all across this country.
It is also an honor to be joined today by my colleague, and my fellow Co-Founder and Co-Chair of the Electrification Caucus, Senator Tina Smith of Minnesota.
I am so grateful for Senator Smith’s steady and determined leadership over these past months—and year really—to make sure we found a path forward on clean energy and electrification investments.
I’m not sure anyone would ever describe the United States Senate as the most efficient machine.
But the clean energy and electrification investments that we ultimately secured in the Inflation Reduction Act of 2022 represent—by far—the most significant steps that Congress has ever taken to spur the widespread deployment of highly efficient, fully-electric, and climate pollution-free technologies.
These electric technologies—from air-source heat pumps for home heating and water systems to induction stovetops and electric clothes dryers—have already leapfrogged their fossil fuel-powered alternatives in terms of both efficiency and performance.
They can create major health benefits by replacing dirty fossil furnaces and gas stoves that are burning dangerous compounds into the indoor air in our homes.
That means less children with asthma and less seniors with breathing problems that many of us don’t even realize are being caused by the appliances in our homes.
When you pair them with clean and carbon pollution-free power generation—something the Inflation Reduction Act also invests in substantially through the revamped investment and production tax credits—these electric technologies are the tools that will allow us to solve the climate crisis.
Because they are also much more efficient and less expensive to operate, they will also help families all across our country realize significant savings on their energy bills.
This is particularly important at a time when so many Americans have been experiencing the pinch from inflation at the gas pump and in their gas and utility bills.
These cost savings are one of the major reasons why many of the nation’s top economists have endorsed the Inflation Reduction Act.
Let me quote from a letter sent to congressional leadership and signed by 126 leading economists—including former Treasury secretaries, a former Congressional Budget Office director, Nobel Prize winners, and former Federal Reserve Vice Chairs:
“This legislation represents the single biggest step to date in tackling the climate crisis. It makes key investments to incentivize the transition to cleaner energy sources and greater efficiency. It also invests in the current energy distribution system to make it more resilient, lowers energy costs for families, and helps protect U.S. family budgets against future shocks.”
That is exactly right.
And that’s exactly why we need to move quickly to pass the Inflation Reduction Act into law.
Before I finish, I want to go into a little more into detail on the specific piece of the bill that I spent so much time working on.
That’s the $4.5 billion for new point-of-sale consumer rebates for electric household appliances.
These rebates mirror the legislation that I introduced last year called the Zero-Emission Homes Act.
This new funding will be distributed to both State and Tribal Energy agencies as grants so they can implement high-efficiency electric home rebate programs that can run through 2031.
And the rebates will be allowed to go up to a maximum of $14,000 per household.
These rebates will help to levelize the upfront costs of installing these appliances, and help many more Americans access the health, climate, and cost benefits of electrification.
The Inflation Reduction Act also includes new tax credits to help more families purchase new and used electric vehicles.
It includes major investments to supercharge our manufacturing base for clean and electric technologies—from heat pumps and wind turbines to batteries, solar components, and EVs—right here in America.
And those revamped investment and production tax credits that I touched on earlier are not solely for wind and solar generation.
I’m really excited that we are standing up my proposal for an Investment Tax Credit for energy storage, which is essential to shoring up reliability and resilience in the grid.
This will be a 30% ITC for standalone storage projects.
We have seen how these types of credits have spurred investment in wind projects over the last decade.
And I'm very confident they can do the same for storage.
There’s a lot to unpack in this bill.
And I am excited to hear from my colleague about what she is most excited about in this.