Going green saves both the planet and your wallet, thanks to Uncle Sam’s tax credits. Last year, Americans claimed $8.4B in tax breaks for clean energy upgrades — surpassing government projections for their first full year. This increase in claims comes after the Inflation Reduction Act, signed by President Joe Biden in 2022, extended these credits for ten years and increased their value.

• Over 3.4M US households took advantage, receiving an average of ~$5.1K for residential clean energy and $882 for energy-efficient home improvements.
• The states with the highest claims included California, Florida, and New York, where popular upgrades included solar panels, heat pumps, and energy-efficient water heaters.

Tax privilege: Despite the popularity of these credits, only 2.5% of taxpayers utilized them in 2023. Additionally, 66% of the total tax credits disproportionately benefited those with higher incomes. AnnDyl Policy Group’s Saul-Rinaldi noted this imbalance is largely due to their nonrefundable nature. And to benefit from tax credits, you need to owe taxes — so higher earners with bigger tax bills reap more rewards.