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Energy

Home EV charger tax credit covers most of the US, some say it’s too broad

Feb 5

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As prospective electric vehicle (EV) buyers weigh their options, concerns about where and when to charge have been among the biggest roadblocks to overcome. A lesser-known solution, embedded within the Biden administration’s Inflation Reduction Act, offers a tax incentive aimed at encouraging individuals to install home EV chargers.

“We know that one big factor holding Americans back from purchasing an EV is the availability of fast, convenient charging,” said John Podesta, senior adviser to the president for clean energy innovation and implementation.

The tax credit, running through 2032, covers 30% of home installation costs, with a cap at $1,000. This incentive is designed to alleviate some financial burden for those looking to enhance their EV charging convenience at home, with the national average for a home charger typically ranging from $1,000 to $2,500.

To be eligible for the credit, EV chargers must be placed in either low-income or non-urban areas. While that stipulation means residents in major cities may not benefit from this subsidy, the Biden administration claims about two-thirds of Americans will still be able to benefit from the incentive.

“Additional clarity around the law’s incentive to build new charging infrastructure in communities that need it most will help drive continued progress in 2024,” said Deputy Secretary of the Treasury Wally Adeyemo.

Critics, including Sen. Joe Manchin, D-W.Va., argue that the wide scope of eligibility may ultimately be a detriment. Affluent areas such as Martha’s Vineyard, Malibu, Breckenridge and parts of Hampton Beach qualify for the credit, leading to concerns that it could dilute investments in areas most in need of charging infrastructure development.

“This proposed guidance ensures that rural Americans will remain stuck at the end of the investment line, the exact problem this tax credit was supposed to address, choosing to give hand-outs to those that don’t need it while ignoring its responsibility to provide a hand up to rural communities at risk of being left behind,” Manchin said.

The senator contends that the rules “spit in the face of rural Americans,” expressing worries that the inclusivity of the credit may not effectively target the areas requiring the most significant boost to charging infrastructure.

Additionally, concerns have been raised about the financial implications of such a large subsidy that now extends almost nationwide. Manchin claims this incentive will “spend money that Congress didn’t account for and doesn’t have in the budget.”

However, efforts to drive down the cost of home EV chargers extend beyond this White House incentive. Some states, metropolitan areas and utility providers are offering additional subsidies that can be combined with the federal tax credit.

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[JACK AYLMER]

FOR PROSPECTIVE EV BUYERS – CONCERNS ABOUT WHERE AND WHEN TO CHARGE – ARE PROBABLY TOP OF MIND. 

TURNS OUT THERE’S A LITTLE-KNOWN WAY TO HELP YOU SAVE MONEY – IF YOU WANT TO PUT A CHARGER IN YOUR HOME.

WITHIN THE BIDEN ADMINISTRATION’S INFLATION REDUCTION ACT THERE IS A SEPARATE TAX INCENTIVE AIMED AT ENCOURAGING PEOPLE TO INSTALL EV CHARGERS.  

THE CREDIT RUNS THROUGH 2032 AND COVERS 30 PERCENT OF HOME INSTALLATION COSTS.

CAPPING OFF AT $1,000

AND IF YOU’RE LOOKING TO TAKE ADVANTAGE – YOU’LL PROBABLY WANT THE HELP. 

THE NATIONAL AVERAGE FOR A HOME CHARGER RUNS EV DRIVERS BETWEEN 1,000 AND $2,500

ELIGIBLE CHARGERS ARE REQUIRED TO BE PLACED IN EITHER LOW-INCOME OR NON-URBAN AREAS.  

ALTHOUGH THAT MEANS THOSE LIVING IN A MAJOR CITY MAY BE OUT OF LUCK, THE WHITE HOUSE ASSERTS A MAJORITY OF AMERICANS CAN STILL ACCESS THE CREDIT. 

BUT SOME HAVE BELIEVE THE WIDE SCOPE OF THIS CREDIT WILL ULTIMATELY BE A DETRIMENT. 

MORE AFFLUENT AREAS LIKE MARTHA’S VINEYARD, MALIBU, Breckenridge, AND PARTS OF HAMPTON BEACH ALL QUALIFY .

SENATOR JOE MANCHIN SAID THE RULES QUOTE “SPIT IN THE FACE OF RURAL AMERICANS.”

HE ARGUES THE INCLUSION OF SO MANY COMMUNITIES WILL ULTIMATELY DILUTE THE NUMBER OF INVESTMENTS MADE IN AREAS MOST IN NEED OF A BOOST TO CHARGING INFRASTRUCTURE. 

THE BIDEN ADMINISTRATION SAYS ABOUT TWO THIRDS OF THE COUNTRY WILL BE ABLE TO USE THE HOME CHARGER INCENTIVE.

MANCHIN IS ALSO RAISING QUESTIONS ABOUT WHETHER OR NOT CONGRESS HAS THE BUDGET TO FUND SUCH A LARGE SUBSIDY.

BUT, OTHERS ARE ALSO PITCHING IN TO HELP DRIVE DOWN THE COST OF HOME EV CHARGERS.

SOME STATES, METROPOLITAN AREAS AND UTILITY PROVIDERS ARE OFFERING ADDITIONAL INCENTIVES THAT CAN BE COMBINED WITH THE FEDERAL TAX CREDIT.

YOU CAN FIND OUT MORE ABOUT WHAT THOSE RESOURCES LOOK LIKE BY VISITING SAN.COM