Inflation Reduction Act featured in March's Spotify!
The Inflation Reduction Act does many things, with some questions to its actual impact on inflation. But let’s set aside the IRS stuff, the healthcare stuff, and focus solely on the $369 billion set to support efforts to address climate change to support efforts to get us all on track to meet GHG reduction goals by 2050.
For context, the American Recovery and Reinvestment Act (ARRA)—the funding on which many of us cut our energy efficiency teeth—invested only $90 billion in clean energy. Only. At the time it was unprecedented, and we can still see the infrastructure, behavior and programmatic successes throughout California and the larger energy efficiency industry. So clearly, the idea of more than tripling that has those of us in the field sitting up to take notice.
But here’s the thing, the clean energy investments coming from the Inflation Reduction Act…well they’re tricky. Largely tied up tax credits and rebates for buying emission reducing products and services. Now, a lot of people have written about how home owners and businesses can take advantage of the acts provisions. NRDC did a particularly good job of summarizing what for the average consumer. Our friends over at 3CREN pulled together this incredibly useful matrix of funding pathways . And our own Rochelle Butler tackled the topic in our Fund-It Fast Chat where she and Erica Larson from ICF broke down the basic provisions and those of greatest applicability to unlock agencies.
And since we’re a public agency focused organization I’ll call out the thing I think is super interesting: local governments obviously can’t take a tax credit since they don’t pay taxes, but there is a provision in the Inflation Reduction Act that allows local governments—and non-profits—to pass on the benefit and negotiate the cost of a project design. This provision was previously only available to federal agencies, but now is open to municipalities and under energy efficiency for commercial buildings, which are eligible for up to $5 per sq foot deduction. For a local government, the agency can pass on the benefit of the deduction to the design of the building, and in that passing of benefit negotiate the price of the building.
The tax credits and deductions went into effect January 1, 2023, while the grant programs will take months if not a year or more to stand up and begin funding.
Department of Energy – Loans and Programs Office
https://www.energy.gov/lpo/inflation-reduction-act-2022
What’s in the Inflation Reduction Act for Utilities?
https://www.icf.com/insights/energy/utility-transformation-inflation-reduction-act#
Energy in 30: Breaking Down the Inflation Reduction Act
https://www.icf.com/insights/energy/energy-in-30-inflation-reduction-act
How clean energy economics can benefit from the biggest climate law in US history
https://www.icf.com/insights/energy/clean-energy-economic-benefits-us-climate-law
Courtney’s Picks:
I don’t know how many times I can say it, it’s the Inflation Reduction Act. It’s not a retirement account. It’s not an Irish paramilitary group. It’s a federal act. Say the whole thing. Until you do I’m going to keep okaying ridiculous playlists so I can express my frustration with everyone who shortens it to something that already exists. Stop being lazy.
Sunday Bloody Sunday, U2
Run, Snow Patrol
Dreams, The Cranberries
Crazy Love, Van Morrison
Sam’s Picks:
I think we all have heard the phrase the Inflation Reduction Act so much that now we tune it out. But instead of tuning it out let’s tune it up! Here is a fresh spin on Irish artists so that this federal funding opportunity expands our thinking on project opportunities.
Rome, Dermot Kennedy
No Judgement, Niall Horan
What You Know, Two Door Cinema Club
Movement, Hozier
Kelsey’s Picks:
Why did I not realize how many incredible artists are from Ireland?! It is just like the Inflation Reduction Act, so many great opportunities to uncover. Admittedly, I would include all Hozier songs, but thought it would be fun to mix it up and not put you all into a depression by listening to Take Me to Church and Cherry Wine on loop, enjoy!
Jackie and Wilson, Hozier
Black and White, Niall Horan
Breakeven, The Script
Chasing Cars, Snow Patrol
Rochelle’s Picks:
Admittedly, much of this playlist takes me back to junior high school in the 90’s. Frankly, that’s an amazing place to be. I hope you enjoy as you are having your corned beef and cabbage and drinking your Guinness Stout, I know I will. Happy St. Patrick’s Day!
The Blower's Daughter, Damien Rice
Zombie, The Cranberries
Nothing Compares 2 U, Sinead O'Connor
Boadicea, Enya