Washington Post: “Americans Tapped $8 Billion in Tax Credits on Home Energy Upgrades”
RFF Senior Fellow Karen Palmer is quoted in this article about how Americans used tax credits made available under the Inflation Reduction Act.
For climate experts, a major question is whether the tax credits are spurring people to make purchases they wouldn’t otherwise make.
“To understand the effectiveness of something like that, you have to have a good idea of what a counterfactual might be. Some people who are going to take these tax credits would have perhaps made these investments anyway,” said Karen Palmer, an environmental economics expert at Resources for the Future. “It’s especially difficult the very first time we have numbers here to make inferences about what the IRA has done.”
She noted, for example, that the lower number of people buying heat pumps compared with other technologies might not be a reflection of the effectiveness of the tax credit alone — some people who want to buy heat pumps are on a waiting list because of supply chain issues or a lack of trained and qualified professionals to install them.
