Inflation Reduction Act Summary

This page summarizes the Inflation Reduction Act (IRA) of 2022 as it applied to federal tax incentives, credits and rebates for manufacturing and buying electric vehicles, EV charging equipment (EVSE) and clean energy products. The energy provisions are in Subtitle D, Energy Security, which totals $369 billion.

Part 1: Clean Electricity and Reducing Carbon Emissions

Sec. 13101, Extension and Modification of Credit for Electricity Produced From Certain Renewable Resources: covers wind, biomass, municipal solid waste, geothermal, hydropower, and marine and hydrokinetic energy production and storage. Revives the production tax credit (PTC) for solar facilities and extends the PTC for geothermal facilities.
Sec. 13102, Extension and Modification of Energy Credit: covers energy production and storage technology, including solar photovoltaics, microgrid controllers and linear generators.
Sec. 13103, Increase in Energy Credit for Solar and Wind Facilities Placed in Service in Connection With Low-Income Communities
Sec. 13104, Extension and Modification of Credit for Carbon Oxide Sequestration
Sec. 13105, Zero-Emission Nuclear Power Production Credit

Part 2: Clean Fuels

Sec. 13201, Extension of Incentives for Biodiesel, Renewable Diesel and Alternative Fuels
Sec. 13202, Extension of Second Generation Biofuel Incentives
Sec. 13203, Sustainable Aviation Fuel Credit
Sec. 13204, Clean Hydrogen

Part 3: Clean Energy and Efficiency Incentives for Individuals

Part 3 covers solar, wind, fuel cell and battery storage technologies and equipment, and home energy efficiency improvements.

Provision	Who Benefits	Amount
Sec. 13301, Nonbusiness Energy Property Credit: heat pumps	Heat pump and biomass installers	30%, up to $2,000
Sec. 13301: central A/C, panels, windows	A/C, panel, window installers	$600
Sec. 13301: exterior doors	Exterior door installers	$250 per door, $500 total
Sec. 13301: home energy audit	Home energy audit payers	$150
Sec. 13302, Residential Clean Energy Credit	Solar, wind, fuel cell, storage installers	30% of installed cost
Sec. 13303, Energy Efficient Commercial Buildings Deduction	See notes	-
Sec. 13304, Extension, Increase, and Modifications of New Energy Efficient Home Credit	Energy Star new and manufactured homes	-

Sec. 13301, heat pumps: Individuals installing electric heat pumps, heat pump water heaters, or biomass stoves and boilers receive 30% of total cost, up to $2,000, whichever is less.
Sec. 13301, central A/C, panels, windows: Individuals installing central A/C, electrical panel upgrades, exterior windows and skylights receive $600, within a $1,200 annual total.
Sec. 13301, exterior doors: Individuals installing exterior doors receive $250 per door, $500 total for all exterior doors, within the $1,200 annual total.
Sec. 13301, home energy audit: Individuals paying for a home energy audit receive $150, within the $1,200 annual total.
Sec. 13302: Individuals installing solar, wind, fuel cell, or battery energy storage of at least three kilowatt-hours (kWh) receive 30% of total installed cost.
Sec. 13303: References the Energy Star Single-Family New Homes and Energy Star Manufactured Home National Program Requirements.
Sec. 13304: Applies to single-family new homes and manufactured homes meeting Energy Star requirements.

Items under the $1,200 annual total in Sec. 13301 must be Energy Star rated. For eligible home improvements after 2024, no credit is allowed unless the manufacturer has a product identification number for the item and the person claiming the credit includes that number on their tax return.

Part 4: Clean Vehicles

Provision	Who Benefits	Amount
Sec. 13401, Clean Vehicle Credit	New EV buyers under AGI caps	30%, up to $7,500
Sec. 13402, Credit for Previously-Owned Clean Vehicles	Used EV buyers under AGI caps	30%, up to $4,000
Sec. 13403, Qualified Commercial Clean Vehicles: under 14,000 lbs	Commercial vehicle and mobile machinery owners	30%, up to $7,500
Sec. 13403: over 14,000 lbs	Same as above	30%, up to $40,000
Sec. 13404, Alternative Fuel Refueling Property Credit: home	Home EV charger installers	30%, up to $1,000
Sec. 13404: commercial	Businesses in eligible areas	Up to $100,000

Sec. 13401: Buyers of new electric vehicles with adjusted gross income (AGI) under $150,000 (single) or $300,000 (household) receive 30% of total cost, up to $7,500, whichever is less; the $7,500/$3,750 split is tied to battery critical minerals.
Sec. 13402: Buyers of used electric vehicles with AGI under $75,000 (single) or $150,000 (household) receive 30% of total cost, up to $4,000, whichever is less.
Sec. 13403: Owners of vehicles that carry people or loads on public roads, and of mobile machinery, receive 30% of total cost, up to $7,500 under 14,000 lbs or up to $40,000 over 14,000 lbs, whichever is less.
Sec. 13404, home: Consumers installing EV charging equipment, including bidirectional charging equipment, receive 30% of total cost, up to $1,000, whichever is less.
Sec. 13404, commercial: Businesses installing EV charging equipment, including bidirectional charging and charging for two- and three-wheeled vehicles, in low-income census tracts or non-urban areas receive up to $100,000, stated as $100,000 + 20% of cost above $100,000.

Mobile Machinery Under Sec. 13403

The commercial clean vehicle credit includes mobile machinery as defined in Section 4503(8): any vehicle that consists of a chassis

(A) to which there has been permanently mounted (by welding, bolting, riveting, or other means) machinery or equipment to perform a construction, manufacturing, processing, farming, mining, drilling, timbering, or similar operation if the operation of the machinery or equipment is unrelated to transportation on or off the public highways,
(B) which has been specially designed to serve only as a mobile carriage and mount (and a power source, where applicable) for the particular machinery or equipment involved, whether or not such machinery or equipment is in operation, and
(C) which, by reason of such special design, could not, without substantial structural modification, be used as a component of a vehicle designed to perform a function of transporting any load other than that particular machinery or equipment or similar machinery or equipment requiring such a specially designed chassis.

Part 5: Investment in Clean Energy Manufacturing and Energy Security

Sec. 13501, Extension of the Advanced Energy Project Credit

Covers expanding or re-equipping facilities for:

Production, manufacturing or recycling of advanced grid, energy storage and fuel cell equipment
Equipment for the production of low-carbon fuels, chemicals and related products
Renewable energy and energy efficiency equipment
Equipment for the capture, removal, use or storage of carbon dioxide
Advanced light-, medium- and heavy-duty vehicles and related components and infrastructure

Sec. 13502, Advanced Manufacturing Production Credit

Covers production of:

Solar modules
Wind turbines and offshore vessels
Torque tubes
Structural fasteners
Inverters
Electrode active materials
Battery cells
Battery modules
Applicable critical minerals

Part 7: Incentives for Clean Electricity and Clean Transportation

Sec. 13701, Clean Electricity Production Credit: Section 45Y credits based on grams of carbon dioxide equivalent emitted per kWh generated and either sold to a third party or metered and used.
Sec. 13702, Clean Electricity Investment Credit
Sec. 13703, Cost Recovery for Qualified Facilities, Qualified Property, and Energy Storage Technology
Sec. 13704, Clean Fuel Production Credit

Part 8: Credit Monetization and Appropriations

Sec. 13801, Elective Payment for Energy Property and Electricity Produced From Certain Renewable Resources

Credits for carbon capture, clean hydrogen and clean energy manufacturing are refundable for all taxpayers, but for most credits only during the first five years of the credit period. After that they become nonrefundable again for those taxpayers.

For tax-exempt organizations, government entities and Indian tribes, these tax credits are more expansive.

Inflation Reduction Act of 2022