Warming your house the green way just got more expensive

You've not been on the show for a while.

Yeah, I've been doing a bit of shoveling here. It has been quite the brisk winter, I must say.

Yeah. And that's because a series of clean energy tax credits have officially expired. They saved many people thousands of dol on everything from heat pumps to insulation to energy efficient wood stoves.

So today on the show what that means for homeowners and the renewables industry. Plus, who's happy these tax credits are gone? When Michel Dutroux and Brendan Jackson bought their first house in Juneau, Alaska, there were a few quirks.

But one of the first big upgrades they made for the house wasn't fixing the plumbing. It was installing a heat pump.

That's where the Biden era tax credits come in. And here's how they work. Brendan and Michelle pay full price for the heat pump and installation at the shop. And then when they're doing their taxes early in the year, they can write off 30% of that cost up to $2,000, which means if they owe any taxes, the feds will slash up to two grand off their tax bill, which

Which is why installing a heat pump before that deadline became a priority for Brendan and Michelle.

Tax credits for energy efficiency have been around since the 1970s. Originally, they were developed to wean Americans off foreign oil during an energy crisis. Think Jimmy Carter making speeches at the White House wearing a cosy, warm sweater. All of us must learn to waste

For instance, at 65 degrees in the daytime and 55 degrees at night, we

Most days I am wearing long johns, or as you may call them, long underwear. And I like to think that Jimmy Carter would be proud.

Back in the Carter era, Americans could receive a 15% credit for insulating their homes or upgrading their storm windows. Now, whether these subsidies worked is a mixed bag. Home efficiency has gotten better over the years, but there were a lot of other motivating factors, including high energy prices and more stringent building codes.

But here's where the program has critics. A lot of those folks were also higher earners. More than half made 100 grand or more a year. Ryan Young is with the Competitive Enterprise Institute, a libertarian think tank.

The energy efficient home improvement credit cost the government more than $2 billion in lost revenue back in 2023.

As the Biden era energy credits, including the home credit, end the renewable energy sector might feel a the non partisan Rhodium group found that natural gas demand in the US will increase and so will prices by up to 7%.

He thinks there will be a dip in the purchase of stuff like heat pumps and solar panels this year, but he's optimistic it could be temporary because regardless of tax credits, the residential energy market is leaning away from fossil fuels.

Yeah, all roads lead to AI data centers.

But you know, just because the tax credit is gone, it doesn't mean there aren't other incentives for making your house more energy efficient, including state by state rebates.

And that was something that Brendan Jackson and Michel Dutroux took advantage of in addition to their federal tax credit.

It sounds like the economic incentives really stacked up for them.

This episode was produced by Cooper Katz McKim and engineered by Kwesi Lee. It was fact checked by Ciel Juarez. Cait Concannon is our editor and the indicator is a production of npr.