Why the Inflation Reduction Act Matters for HVAC and Solar Contractors
Signed into law on August 16, 2022, the Inflation Reduction Act is set to impact just about every aspect of society. With hundreds of billions of dollars invested, some provisions within the Act are retroactive to the beginning of the year; others will roll out next year and in the following years.
While much of the focus has been on how those provisions will benefit individuals and families, many business owners will also gain advantages. This is certainly true for HVAC and solar contractors. Here are some ways the Act will make direct and indirect differences for professionals in these fields.
What's the Rationale For the Inflation Reduction Act?
As the name implies, the primary goal of the Inflation Reduction Act is to manage the inflation rate and restore a more balanced economy. The exact mechanisms vary, depending on the particular area of the economy under consideration. Ultimately, each provision is intended to make it easier for those living in the United States to enjoy a reasonable quality of life. Much of the focus is on making essentials more affordable, especially for those whose paychecks don't stretch as far as before. In this sense, the Act's provisions will provide a means for people to enjoy more energy-efficient homes, either by making new housing more affordable or by supporting efforts to upgrade older housing so that those structures require less energy to handle most daily functions. It's with this latter aspect that contractors will be especially interested.
Bolstering Energy Production in the United States
It's no secret that the United States currently relies on outside resources to meet the current level of energy consumption. That dependence comes at a cost. World market shifts affect the pricing for those resources, putting a crimp on the US economy. Bolstering domestic energy production while findings ways to reduce the waste of energy can make a significant difference.
Efforts to increase internal energy production ultimately mean more employment for those who install residential and commercial heating, cooling, and ventilation systems. It also means contractors will have a wider range of energy-saving options to offer to their clientele. Those wishing to enter this field will also have an easier time finding gainful employment, something that also benefits the economy in the long run.
Fighting Climate Change
A significant amount of the funds allocated within the ACT ($370 billion) are earmarked for fighting climate change. This is a first for the United States in terms of committing resources to this issue. Education is a key element of the plan to protect the planet and ensure it's habitable for future generations.
To that end, the effort to fight climate change involves providing incentives to companies that produce energy to do so using forms that are considered renewable. Further, the effort involves helping households and businesses become more aware of how to manage their rates of energy consumption. That will often involve calling on contractors to make changes or upgrades that lead to more efficient energy usage.
Decreasing Expenses for Small Business Operations
There are approximately 33 million small business operations in the United States. Owners of all those businesses are on the lookout for ways to maximize net profits. That often involves being able to keep operational expenses as low as possible without harming the quality of what's offered to consumers.
As this relates to HVAC and solar contractors, provisions within the Act that are intended to help households stem their costs translate into a reduced cost of operating businesses. Simply put, some of what the Act is set to do makes providing employees with benefits more affordable. That, in turn, allows small business owners a better opportunity to compete with companies that are larger and have more resources. Along with positioning contractors to be more competitive, this measure also increases the odds of attracting higher-quality employees who will stick around for the long haul.
Offering Tax Advantages to Customers
One of the objections to upgrading older energy systems in households as well as businesses is the expense. To aid in overcoming this obstacle, the Act includes provisions that consumers can claim when they make qualifying changes to their homes or places of business. Many of those provisions are in the form of the restoration of tax credits that have lapsed and the implementation of new tax credits that have not been available before.
This will impact the way that HVAC and solar contractors can position themselves in the market. By being aware of these tax advantages, who would qualify for them, and what it would take to claim them, contractors have another powerful incentive to entice consumers to make those energy-efficient upgrades. Think of what that could do in terms of increasing sales volume.
Additional Rebates to Discuss
It's not just tax advantages that are made available through the Act's provisions. There are also new rebates on the horizon that help to immediately ease the burden of investing in newer heating and cooling systems. Those rebates can be claimed even as the installation process takes place.
This provides another way for contractors to help clients afford those new systems. Offering information about any applicable rebate and possibly even providing support in claiming that rebate means consumers look beyond what they pay upfront. That's because they know a portion of that expense is about to be offset by receiving the rebate. You can bet contractors who have this information on hand will find it easier to compete than contractors who remain unaware of these incentives.
More Training for Contractors
While much of the emphasis is on incentives that motivate people to improve their energy habits and equipment, the Act also allocated funding aimed at training contractors. Those who are interested in careers that have to do with energy can't always afford the necessary education. Thanks to the Act, there will be ways to qualify for training grants that help make pursuing certification less of a burden.
This is a good thing in more than one way. Thanks to the ability to secure the training and, ultimately the certification needed, there will be more people who are able to earn a living doing something they love. At the same time, a wider pool of professionals makes it all the easier to keep up with consumer demand. Contractors who remain up to date and who are in a position to bring in more people to take care of customers will find themselves with business enterprises that do more than barely break even.
An Increased Need for Auditors
It's not just contractors who will benefit. There's also the matter of those who want to pursue careers as energy auditors. Thanks to the provisions found within the Act, obtaining the training and certification needed to become an auditor will be less of a chore.
Thanks to the energy efficiency auditor training, there will be more options for what type of career to pursue. Some may find that focusing on energy audits intended for commercial structures is what they like. Others may decide that concentrating on residential energy efficiency audits is the way to go. In either scenario, more trained professionals are available, making it all the easier to provide input into what sort of energy upgrades would be in order.
Funds for Promoting Further Development of Alternative Energy Sources
As it relates to domestic energy production, one of the goals of the Inflation Reduction Act is to decrease dependency on resources supplied by other nations. In order for this to happen, it's essential that the development of alternative energy sources accelerate. While that effort was somewhat stymied in the recent past, allocations for that development are now present.
Much of the focus is on developing solar energy resources for residential as well as commercial use. That will mean more than providing funding that supports product development and improving the technology of currently available solar projects. It will also mean making sure that more people are trained in consulting, recommending, and ultimately installing these alternative energy systems.
For example, those provisions support further development and usage of solar energy systems within the country. As a renewable resource, solar energy is considered one of the most powerful alternatives to the use of fossil fuels. You can bet that contractors who are trained in the merits of solar energy systems will be of great use to their clients. That also means more demand among consumers for this type of support over time.
Without a doubt, the Inflation Reduction Act is intended to make the country stronger on multiple levels. Seen as an investment that will pay off in both the short and long term, it's important to understand what it represents in the way of career paths and greater choices for all consumers. From teaching people how to save money on energy costs to be able to offer information on rebates and tax breaks to making the most of energy efficiency training, now is the time to learn more about how you can make the most of what the Act has to offer.