With steeper utility costs and worsening inflation, many citizens in the United States are considering eco-friendly and safe strategies like solar-powered homes and heat pumps.
Josh Hurwitz from Connecticut is using solar panels to power his house. Before Josh decided to shift to an eco-friendly method, he thought about three reasons. First, he wanted to cut his carbon footprint. Two, so he could still have power whenever there are blackouts within his city; and three, to save money. Josh explained that while completing the set-up cost him a lot, it would be worth it as he would save thousands within 15 years after he paid off the set-up.
“You have to make the money work. You can have the best of intentions, but if the numbers don’t work, it doesn’t make sense to do it,” he said.
Fortunately, the government of Connecticut provides incentives for citizens who convert to eco-friendly houses. Moreover, the eco-friendly infrastructure helps the federal government enforce and realize the Inflation Reduction Act, which incentivizes eco-friendly homes like solar-powered ones. With the law, the United States hopes to encourage 26% of American homes to become eco-friendly by 2024 to 2035. In addition, the government will cover over 30% of the system’s cost and pay for 30% of the batteries that will store the energy from the solar panels installed in each house.
“The main thing the law does is give the industry, and consumers, assurance that the tax credits will be there today, tomorrow and for the next ten years. But, unfortunately, rooftop solar is still expensive enough to require some subsidies,” explained Clean Energy States Alliance executive director Warren Leon.
The cost of going green would be high. However, Leon explains that tax credits could cover the up-front cost. For example, Hurwitz used federal tax credit back in 2020 when he installed his solar power system. Several contractors also offer a package where they absorb the upfront cost and claim the credit from the government. Once completed, the owner should pay for the installation. It would cost a lot. However, the return on the investment would be felt years after installation.
“Will this growth have legs? Absolutely! With utility rates going up, it’s a good time to move if you were thinking about it in the first place,” said Veronica Zhang, the portfolio manager of Van Eck Environmental Sustainability Fund.
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Other eco-friendly means
Other houses also consider using a home heat pump to become eco-friendly. Moreover, with benefits and incentives coming from the government, turning eco-friendly would become more compelling among homeowners. A heat pump is a single appliance that replaces a home’s traditional furnace system and air conditioner. The system could cool a home and help the planet when paired with solar panels. With worsening inflation and high energy costs, going eco-friendly is now widespread. According to SaveOnEnergy.com, over 87% of American households say their energy prices have increased.
“These incentives are not only saving you money now and in the long run on your utility bills, but they are putting our economy on track to reduce consumption of fossil fuels that contribute to climate change. It’s a win-win,” said the Environmental Law Clinic at Case Western Reserve University School of Law director Miranda Leppla.
Rewriting America, a non-profit organization that helps communities electrify their homes, said that heat pumps are practical. Eco-friendly heat pumps are adaptive to climates and are more efficient than traditional furnace systems by three to five times. Heat pumps cost around $8,000 to $35,000 per unit. The price varies depending on the house’s size and the type of heat pump. However, Rewriting America said households could save hundreds of dollars annually by going eco-friendly with heat pumps.
“While there’s an upfront cost, millions of homeowners would save money with a heat pump over the life of the device. You’ll save even more with the federal government covering a chunk of the upfront cost,” said Joshua Skov, a consultant and instructor at the University of Oregon.
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The US government will support eco-friendly means
Faith Birol, director of the International Energy Agency, said that the US government is investing in eco-friendly methods. For example, the Inflation Reduction Act increases the subsidies for people who convert to eco-friendly means. However, the IEA said more funding is needed so the US could achieve its climate goals.
“Today, it’s about 1.3 trillion US dollars, and it will go up to about 2 trillion US dollars. And as a result, we are going to see clean energy, electric cars, solar, hydrogen, and nuclear power slowly but surely, replacing fossil fuels. And why do governments do that? Because of climate change, because of the greenness of the issues? Not at all. The main reason here is energy security,” he said in an interview.
“Energy security concerns, climate commitments, industrial policies — the three of them coming together is a very powerful combination,” he added.
“Energy markets and policies have changed due to Russia’s invasion of Ukraine, not just for the time being, but for decades to come. Even with today’s policy settings, the energy world is shifting dramatically before our eyes. Government responses around the world promise to make this a historic and definitive turning point towards a cleaner, more affordable and more secure energy system,” Birol added.
Photo Credit: Unsplash/Jubbar J.
Source: CNBC
