Two years have passed since the country’s historic climate law, the Inflation Reduction Actwas signed. The IRA is the largest investment in clean energy projects in U.S. history, and many Americans don’t know about it, even though some of its programs could directly benefit consumers, such as the Residential Clean Energy Tax Credit.

Flora Cardoni, deputy director of PennEnvironment, looked at the latest federal tax data This shows that last year, more than 30,000 Pennsylvania residents took advantage of this tax credit, saving nearly $150 million in taxes. Kara Holsopple of the Allegheny Front spoke with Cardoni to learn more.

Listen to the interview:

Kara Holsopple: How does the residential clean energy tax credit work?

Flora Cardoni: Basically, it works like this: If you decide to install solar panels on your home, you can get 30% of the cost of those solar panels back through a tax credit.

Kara Holsopple: The tax credit for improving the energy efficiency of your home is called the Energy Efficient Home Improvement Credit, right?

Flora Cardoni: The Energy Efficient Home Improvement Credit is the credit that applies to equipment upgrades such as heat pumps for heating and cooling, heat pump water heaters, or geothermal heat pumps. There are upgrades to electrical panels or circuits, insulation, installing more efficient doors, and all of that accounts for about 30% of the cost.

And depending on what appliance or thing you’re upgrading, there may be maximum amounts. For example, for heat pumps, you can get back 30% of the cost up to $2,000 per year. You do the home upgrade, make sure the heat pump you’re buying or the solar panels you’re installing qualify, and then fill out IRS Form 5695 when you file your taxes for the calendar year. An accountant or someone who helps you with your taxes will surely know more about this and can help you.

However, I would like to point out that there is additional money available to the state in the form of rebate programs to improve energy efficiency. This program is set to be implemented in Pennsylvania this winter for things like insulation and air sealing materials, duct sealing, and more.

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Kara Holsopple: And you get the refund after you buy something.

Flora Cardoni: Yes, after you make a purchase. However, you don’t have to wait until you file your tax return to get the refund.

Kara Holsopple: You looked at IRS data that shows that over 134,000 Pennsylvania residents claimed the energy-efficient home improvement tax credit, saving $118 million. So are more people claiming the energy efficiency tax credit?

Flora Cardoni: There’s just a lot more that falls under the Energy Efficient Home Improvement Credit. A lot more in terms of small things you can do, all the way up to larger scale things you can do. But we know that installing a solar system on your home can be a big investment.

Kara Holsopple: Yes, these are significant tax breaks, but they are really only worthwhile for people who can afford the initial investment in, for example, a solar system or even a heat pump.

Flora Cardoni: Yes. That’s why we’re excited about the rebate programs that are coming soon, because things like sealing windows and sealing the house to conserve energy, which of course is the cleanest form of energy that we don’t use in the first place, is good for our planet, but people also save money on their electric bills. These changes are much more affordable for the average person and they can still benefit from them.

At the same time, we hope that people who cannot afford to install solar on their roofs can still advocate for more solar energy in their community. Houses of worship or nonprofits that have no tax burden have not previously been eligible for clean energy tax credits, but now these organizations can also get 30% of the cost of solar energy back.

Many of these businesses don’t know this money is out there. Even if you can’t necessarily go solar, you can encourage your church, house of worship or community center to look into it.

Kara Holsopple: How can people learn more about IRA opportunities and take advantage of tax breaks?

Flora Cardoni: Many organizations like Penn Environment have information about what is available and why you might consider it, what the benefits are and how to do it. For example, Penn Environment and our partners at Environment America have a Clean Energy Home Toolkitwhich provides guidance and resources on topics such as insulating your home against the elements, purchasing a heat pump or switching to solar energy.

In fact, most people are not aware that this money exists and how they can use it.

There are many great resources directly from the Department of Energy or the energy.gov website, including a savings portal and a DIY upgrades portal where you can click on all 23 possible things and see how you can do them. There is also an electric vehicle portal.

Kara Holsopple: Why is it important for Pennsylvania to use these programs?

Flora Cardoni: There are so many reasons for Pennsylvania residents to take advantage of these programs. Of course, individuals who do their part to address the climate crisis by choosing clean energy when possible or electrifying their homes and vehicles are helping us reduce climate pollution, reduce air pollution, and protect public health.

The more people do this, the more ripple effects there are. The more neighbors go solar, the more likely you may consider it yourself. The more solar power is built in communities, the more it will hopefully inspire others to take action. We all have to do our part to move away from fossil fuels.

Of course, that’s not enough. We have big problems in Pennsylvania when it comes to the state’s progress toward clean energy. We’re lagging behind neighboring states like New York, New Jersey, and DC that have clean energy or renewable energy standards and are committed to 100% clean electricity in some places by 2040.

Here in Pennsylvania, our utilities deliver, I believe, 4% of the clean energy statewide. Of course, individuals choosing clean energy is an important step, but I also want to encourage everyone to lobby your state legislators to support proposals that move Pennsylvania forward.

A bill, colloquially known as PRESS, is currently being considered that would set a portfolio standard of 35% clean, renewable energy by 2035. Requiring utilities to meet that target would certainly be a step in the right direction.

Historically, clean energy tax credits or other tax incentives have been around for a long time, and we’ve seen that be a huge driver of solar adoption in the United States. The recent data from the IRS bears that out. People are taking advantage of these opportunities.

But the truth is that the majority of people don’t know this money exists or how to use it. And there are huge swaths of the state and huge swaths of people across the country that could benefit from these things, that have the money to go solar with an electric vehicle, that might even consider it, but that just don’t know these programs exist. So the more we can educate the public about it, the more people will be able to benefit from it and the closer we get to building a clean energy world.

Flora Cardoni is deputy director of PennEnvironment.