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Brian Lehrer: It's the Brian Lehrer Show on WNYC. Good morning again everyone. Now our climate story of the week. Back in August, Democrats made the inflation Reduction Act law and committed to investing $375 billion over the next decade to fight climate change. Many of you know that, but the law includes rebates to buy certain electric vehicles and tax credits to upgrade appliances, offering us all some government subsidies that is part of the plan.

Now that the law has been passed, and there's a path to cutting American emissions, at least in theory, the Biden administration's next challenge is to figure out how to convince Americans to use all those incentives and actually get us to buy green. Matthew Daly, Environment and Energy reporter for the Associated Press focusing on climate change in policy is here to discuss and we're going to open up the phones on this. Hi, Matthew, thanks for coming on. Welcome back to WNYC.

Matthew Daly: Oh, thanks, glad to be here.

Brian Lehrer: The Inflation Reduction Act included this historic investment of $375 billion to fight climate change overall. What kinds of tax incentives did the law create for consumers who want to buy electric vehicles or update their appliances, or switch to other alternative energy forms? I can hear the ears opening wider out there like "Oh, free money from the federal government." Give us the headline.

Matthew Daly: Well, there is a lot of free money out there. In fact, it's pretty amazing how much there is, it's in the billions and multiple billions. You can buy a heat pump, or you can get help in buying a heat pump, depending on your income. A lot of this depends on where you live, so it's your zip code, whether you're a homeowner or a renter, and what your income is. There's tax credits for homeowners and there's also rebates for people who are considered lower middle-income and middle income varies depending on where you live. Basically, you can get either a credit or actual direct rebate from the government.

Brian Lehrer: Are they already available?

Matthew Daly: Well, in some cases, they're not quite available. It's a 10 year rollout on this bill. That's the good and the bad news. The good news is that the people who are pushing this are saying it takes some time for everyone to understand what's going on and to get used to the idea of a heat pump versus a traditional gas furnace. The bad news is that there's no urgency in terms of, if I'm a homeowner, I don't have to do it tomorrow, I can do it next year. I could do it the year after. In fact, some people think it might be better to wait a few months to see how this shakes out. There's the good and the bad there.

Brian Lehrer: Interesting, so listeners, we're opening up the phones on this topic. We are curious to know whether the tax incentives that we've just begun to discuss might influence what you buy this year, or as Matthew was just saying, maybe you want to wait 10 years, because it'll still apply, but [crosstalk]

Matthew Daly: What the advocates are starting to really do is to maybe buy your heat pump this year and your solar panel next year, so you get this credit separated out, and so you can get them each year, but you may want to split them up.

Brian Lehrer: Who out there is excited to switch to an electric vehicle or install solar panels on your home, or buy a heat pump? Do you have a question for our guests, Matthew Daly, from the AP about how these incentives work? 212-433-WNYC, 212-433-9692, or tweet @BrianLehrer, or maybe you want to say, "I'm not going to let the federal government bribe me into getting rid of something that's serving me perfectly well." Wherever you want to enter folks, 212-433-9692.

Let's talk about one of the most talked about incentives and that's tax rebates for buying new electric vehicles. There are restrictions and rules surrounding which cars and which consumer is qualified for the rebate. Could you explain some of those?

Matthew Daly: Well, that is a big problem, is that it's very confusing. They are based not only on the price of the car but also on your income. Then even more complicated is that it depends on how much of the battery is produced in North America. Senator Joe Manchin, who I'm sure your listeners are familiar with was the key vote on this climate bill, which was only passed with Democratic support. There was not a single Republican in either the House or the Senate that voted for this bill, which is highly unusual on a major piece of legislation like this.

Manchin's vote became very, very crucial and he wanted to, as he calls it stand up an industry, which is to make the components for batteries that are not only used in electric vehicles but many other electronics that we have in our homes. He really wanted to make the tax credit available only to-- where if your battery is made in North America, meaning Canada, Mexico or the United States. That has really angered a lot of European allies and South Korea, and other places where they have been trying to open up plants in the United States, but haven't begun to do so yet, so there's still a delay factor. If you want to buy say a Hyundai, you can't get a tax credit right now.

Brian Lehrer: Are there brands where you can get a tax credit right now?

Matthew Daly: Well, all the US carmakers are moving quickly to electric vehicles. It's interesting because in Washington, it's a big political debate among the parties and how it's going to work, but within the industry, they're not waiting for the government, they're converting to electric vehicles right now. They will be available, the credits are available, it's just it's a little bit complicated.

I had someone come up to me because they knew I cover this at a gathering over the holidays, and she said she's fairly well off, and she wanted to buy an electric vehicle. She said that when she went to the dealer and asked about this credit or the rebate, the dealer said "We'll consult your tax attorney." Which was not exactly the answer that the industry wants to hear.

Brian Lehrer: Yes, right. Rather than, "Come to my showroom. Let me tell you what we've got."

Matthew Daly: Exactly [crosstalk]

Brian Lehrer: They also, [crosstalk]

Matthew Daly: It's complicated though.

Brian Lehrer: Yes. They also need to build out a charging station, national infrastructure. I'm going to play a clip of President Biden discussing part of his vision for electric vehicles at the Detroit Auto Show just a few months ago, and he starts with a signature, look folks.

President Biden: Look folks, the great American Road Trip is going to be fully electrified. Whether you're driving coast to coast along I-10 or on I-75, here in Michigan, charging stations will be up and easy to find his gas stations are now.

Brian Lehrer: Of course, they're not yet. Is that also a matter of incentives? Like getting gas stations to receive federal subsidies so they include charging station's, or is that just so not in a gas station's financial interest that will never happen?

Matthew Daly: It's [unintelligible 00:07:23] the gas stations, is just more about just building these. It's a public infrastructure and as you're familiar with any time that the government is building anything, whether it's a subway line or a bridge, it just takes time. I think that that's one of the problems here, is that the President wants 500,000 charging stations nationwide, which is a lot. They are increasing. There are far more charging stations than there were even a year ago or two years ago, but that doesn't mean there's enough.

It just takes time to do it. I wanted to plug a story by one of our AP members, The Boston Globe, had a fantastic story the other day were two of their reporters started out in Portland, Maine, and drove off over New England, looking for a very classically New England thing doughnuts, so they weren't going to donut shops across New England. One had a Tesla, one had another electric vehicle, and they had to find publicly available charging stations and the not surprising outcome was that Tesla had a lot more charging stations than the generic ones. As people who drive EVs know, Tesla chargers don't work in other cars, which is another problem.

Brian Lehrer: Shouldn't they put them in front of vegan restaurants, not doughnut shops, but that's another shot.

Matthew Daly: [chuckles] That could be another story. There was a very good story in The Boston Globe that I'd recommend you read.

Brian Lehrer: Gwen in Queens, you're on WNYC. Hi, Gwen.

Gwen: Hi, thanks so much for taking my call. I love that you guys are talking about this. I have some experience on the business side as a contractor working with government incentives and grant programs for green projects. My advice to President Biden and everybody working on this would be, don't worry about the consumers at all. Don't focus on them focus on the dealerships and the contractors and all of the businesses that you need to roll this stuff out.

They already have the point of sale systems and the advertising and everything in place to make this happen. It's like what you guys were talking about before with calling a dealership and having them tell you talk to your tax attorney. That should not be happening. Those dealerships need to be empowered to put in some incentive on their end, otherwise, it's not going to work. It's too much friction.

Brian Lehrer: That's so interesting Gwen, thank you. From inside a related industry, Matthew so does the Inflation Reduction Act intended to fight climate change, include any incentives at the producer level rather than just the consumer level?

Matthew Daly: Oh, yes, they do, and they're trying to work on that, particularly with contractor say on heat pumps. Also, there's nonprofits out there that are working on. There is one that we talked to for our story called Rewiring America, which has an actual calculator, if you go into their site, it's called Rewiring America, two words is the nonprofit. The calculator shows you what credits or rebates that are eligible for, but when I was talking with their CEO he was saying the nightmare scenario is, people buy their gas furnaces the coldest day of the year when the furnace breaks.

They call the local guy, he says, "Yes, I got one in my truck. I'll be over this afternoon or tomorrow, and will fix it." They want people to start thinking about long term, like thinking about the heat pump. They want the contractor thinking about instead of replacing a gas furnace with another gas furnace to replace it with a heat pump, so it's just a change in mindset that may take some time.

Brian Lehrer: If you're just joining us, we're in our climate story of the week as we're talking about federal government subsidies and other financial incentives in the Inflation Reduction Act to encourage Americans to go green in various ways. We're talking about it with Matthew Daly, who's written up this topic for the Associated Press, where he covers climate and energy. Maina here in New York has a question about a home in Baltimore, right Maina?

Maina: Oh, yes. Thank you very much for taking my call. Very quickly. My daughter and her husband have an old house in Baltimore, and their heating air conditioning system was just practically dead decided to put in a heat pump or heat exchange. It costs them about $25,000. This is just this past year. Now, with luck they would get some rebate on that, but I don't know. They are looking into getting solar panels in the next couple of years, so what part of that might be covered with this program?

Brian Lehrer: Is any of it retroactive?

Matthew Daly: I don't believe it is retroactive. I'm sorry about the timing on that, but now if they wanted to do the heat pump they could get tax credit of up to $8,000, so that's pretty good. On the solar panels, the same thing. You get 30% tax credit or rebate. Again, these are not cheap, so it's not going to be free, but it's going to be a lot less. Similarly with the EV, the maximum credit is $7,500, so if you're buying a $50,000 car, it's still not cheap, but it's cheaper.

Then what Energy Secretary Granholm and other people consistently talk about is once you buy the EV you don't have to go to the gas station anymore, and the charging is free and the operational costs are much reduced, because the engines themselves are less complicated and have fewer moving parts that break down. In terms of the heat pump for a old house in Baltimore or Providence or any other city, the timing is now to do it. Maybe they just were early adopters.

Brian Lehrer: Will, in the East Village around WNYC. Hi, Will?

Will: Hey Brian. Longtime listener, first-time caller. My question is, I'm a member of a co-op board, and I was wondering if these incentives were structured in a way that's conducive to the shareholder co-op board relationship rather than an individual homeowner type scenario, and if your guest has any advice on that front.

Matthew Daly: It might be a little bit beyond my specific expertise, but I would suggest talking to this group, Rewiring America, their entire purpose is to-- they use a phrase that I think some people may be scared off by. They say they want to electrify everything, but the more common way to say that is they want to bring electric heat pumps and electric appliances to everyone. There's a whole big debate about natural gas stoves that we could go on, but we hopefully won't do that right here, but on terms of co-op boards, I'm not 100% sure whether the incentives would be for them. I would assume that they are aware that that's a big part of the population and so, that they have addressed that, but I'm not 100% sure on co-op board.

Brian Lehrer: Well, sorry we couldn't answer that more thoroughly. Yes, we've done two recent shows already on the debate over gas stoves versus electrification and how much that should be required in new construction and what's involved in retrofitting, so obviously more to come on that. A lot of New York City buildings like co-ops and a lot of places everywhere are getting focused on that question. Here's a question from a listener on Twitter.

Listener asked, "When will they give incentives on storage batteries for the home? I've got solar, also had it on my last home. The cost of a battery storage system is prohibitive, and if there were incentives, I would definitely go for it." Anything you can say about that?

Matthew Daly: Yes, they are developing that. The energy department is working on that. It's all a work in progress. It's interesting because we covered this bill a lot when it was debated with Senator Manchin and everyone else Senator Schumer, but it was passed in August, and then signed by the president, but in the real world time that's not that long ago. It takes them time to roll out the regulations, but battery storage is definitely something that the energy department wants to encourage and there are incentives for it. I just don't believe that they have been completely developed yet.

Brian Lehrer: The listener tweets, "I don't understand the economics of a heat pump since it runs on electricity and my monthly electric bills are already pretty high for pretty low consumption." Is that something you can explain simply?

Matthew Daly: Well, what the people who advocate heat pumps say, and they are very, very enthusiastic about the heat pumps, is that they just are much more efficient. Even though they do run on electricity, they just use a lot less of it. There's even a whole subcategory of advocates that say they shouldn't be called heat pumps, because they're actually also air conditioning systems. They do both, but people for whatever reason, they're called heat pumps, but they're really HVAC all around, and they're just much more efficient and that's why people like them.

I think the whole idea of the Inflation Reduction Act, which is the terrible name for this bill, is that it will bring down the cost. If you get the $8,000 credit instead of paying $20, 000 to $25,000, you're paying more like $15,000. In some cases, if your home isn't that big, you can get a smaller one that's cheaper. I've heard you can get one for $15,000 or $16,000, and then you take [unintelligible 00:16:50]. That makes it much more affordable, but just the idea of increased efficiency is the answer to the question.

Brian Lehrer: Joe in Toms River, you're on WNYC. Hi Joe.

Joe: Hi Brian. How are you?

Brian Lehrer: Good. What you got for us?

Joe: Yes, I am a consumer. I was influenced by the various tax credits and incentives too by electric vehicle. There is a little bit of legwork involved as far as getting chargers installed and the amount of research you have to do to make the most of these incentives, but yes, I purchased a new vehicle this year for about half price. If I'm combining all the incentives that were available,

Brian Lehrer: Really? Are there multiple incentives? Can you list a few if it took applying for various things?

Joe: Sure, sure. Well, I'm in New Jersey, there's the charge up New Jersey program that knocked about $4,000 off the price. Chevrolet is who I bought through. They have incentives for teachers that I took advantage of. There's also an Uber incentive, and there's the federal tax credit, which right now is $7,500 until more guidance is issued.

Brian Lehrer: Joe, thank you. That's very helpful to a lot of listeners who might be considering an electric vehicle. Matthew, I don't know if maybe it's good news, bad news call, because on the one hand it sounds like there are a lot of different things that you have to keep your eye on in order to get that max incentive, but on the other hand, he bought an electric car for what he calls half price.

Matthew Daly: Right. He's their ideal consumer here, because A, he's likes what he bought. It doesn't sound like he has various regrets, so I think that's good too. I think it is a little bit on the individual to do their own research. That's why I say I think beyond just the idea of having a tax credit one year for the heat pumping and the solar panel, the next is that just as I'm a homeowner and I drive a car too. You want to do them one at a time. I think you don't want to go all out and do everything all at once.

I think it takes time to make these decisions. Buying a heat pump is a major decision for your house. Buying electric vehicle is a major decision for your car, because you want to make sure that you have a charger in your house that works or that you have access to a public charger that's nearby. That's one of the things that when they do surveys, they talk about besides the price point is they have range anxiety is the phrase they use. It just means you want to be able to get from point A to point B and make sure that you're not going to be stuck somewhere.

Brian Lehrer: To wrap up and to follow-up on Joe's point, or one of Joe's point is, we could do a whole separate segment on affording an electric vehicle, because this is one of the things that always comes up. We talk about how we want to transition the country to electric cars for the sake of the climate. Then part of the pushback always is, oh, but those electric cars they're elite-priced vehicles. The average working American can't afford an electric car. How fast is that changing?

Matthew Daly: Well, it is changing. I wouldn't say it's changing overnight. Again, all these things take time. They are trying to get sedans that are in the 50,000 range versus, now you could spend 95, a 100 or more on an EV on some of the top line like BMWs. It's definitely an issue that's out there. Tesla has tried to make one of their sedan model more affordable, although that's in the eye of the beholder.

50 or 60 to some people seem still super expensive. I think they need to work on that. There is a credit in the law for used electric vehicles which is a whole other market that is very much in the development stage and really is not at full stage yet. There is a used EV market, and you do get a tax credit if you buy a used EV.

Brian Lehrer: Well, that's our climate story of the week. We thank Matthew Daly, environment and energy reporter for the Associated Press focusing on climate change and policy. He wrote up a piece about these many tax incentives and the challenge for the Biden administration of implementing these large parts of this climate bill.

The Inflation Reduction Act, as he quotes one of his sources relying on tax incentives means this fight will have to be waged one household at a time. There are a few more salvos. Matthew, thank you for joining us. We really appreciate it.

Matthew Daly: Oh, thank you. Glad to be here.

Brian Lehrer: Brian Lehrer on WNYC, stay with us more to come.

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