The New Climate Bill’s Secret Weapon? Tax Credits

This bill, then, is a stealthy way to drive Americans as a society toward a cleaner future. It’s turning small individual action—you being better able to afford a heat pump or solar panels—into collective action. 

But how much individual change matters in the face of systemic problems has been a thorny debate for years. For example, does it really matter if you decide to fly less to reduce your carbon footprint? After all, air travel is a small fraction of global emissions, and there’s a whole international economic system in place that runs almost entirely on fossil fuels. Wouldn’t it be more impactful to change the behavior of, say, the airline or petroleum industries?

“There’s this debate in the climate community about individual action versus systemic action,” says Jamie Alexander, director of Drawdown Labs at Project Drawdown, a nonprofit that advocates for climate action. “I think this deal helps show how those are not actually really two entirely distinct things. They are very much related, and demand even at a household level can help massively shift the system.”

One idea among clean energy advocates is that in the power grid of the future, residents won’t be consumers so much as participants. If more people have their own solar panels and store energy in large home batteries, like Tesla’s Powerwall, they can give up some of their extra power when they don’t need it. And if more people park electric cars at home and plug them into a local microgrid, utility operators could tap into those extra at-home batteries when there’s a shortage. That would mean people work together instead of depending on fossil fuel–powered utilities to keep the heat on or the air conditioners running. 

“I feel like it’s really empowering, equipping individuals to address climate change and be better equipped for the world that we’re going to be living in as it continues to change,” says Alexander. “Making homes more energy efficient also will help address resilience in the face of changing weather and these heat waves that we’ve been seeing around the world.” 

This month, for example, Texas’ precarious power grid faced yet another test during a punishing heat wave, as people cranked up their AC units. But desperately trying to cool poorly insulated homes with inefficient appliances strains the power grid—and that problem will get even worse as temperatures rise. The alternative is to put these sorts of tax credits to work before the heat gets any worse, installing better insulation, thicker windows, and ultra-efficient heat pumps, especially in low-income communities. The grid—and public health in general—will thank us for it. 

The tricky bit may be finding the labor to do all this work. Last year, the Biden administration proposed creating a Civilian Climate Corps, which would put Americans to work retrofitting homes and cultivating green spaces, which cool urban areas. But that didn’t make it into this new bill. So as the clean tech revolution accelerates in the US, it might not be the demand and the devices that hold us back, but a shortage of trained labor to deploy it all.

This new bill isn’t perfect, says Casale. For one, it actually mandates more offshore drilling. It also doesn’t punish utilities for not adopting more renewable energy. And it still has to pass the Senate, where it likely heads for a vote in the next few weeks. But the tax credits have the potential to prepare American homes for a green energy future and for ever-more-extreme weather. “The tax credits piece is really critical, really exciting,” says Casale. “This is a huge step forward, if we can get this over the finish line—despite some of the pieces of it that are definitely not perfect.”