The Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA) provide a long list of federal incentives (tax credits, grant funding, ec) that encourage a transition to electrification of transportation and heating for buildings and also supports distributed renewable energy generation (rooftop solar) as well as utility scale (wind and solar) and provides support for improving the energy efficiency of low and middle income homes and multi-family housing. All of these things align with the goals of the PA Clean Energy platform.
Our community facing and municipal operations facing teams can utilize these programs to respond to folks that say "I want to reduce my home or business' carbon footprint, but the sticker price is just too high." Let's give them the info and tools they need to compare their energy costs between the status quo (weekly fill ups or utility gas payments) vs making investments now in clean renewable energy sources.
These incentives cross the threshold for many to justify making the switch to EVs, Electric Heat Pumps and purchasing Solar Energy.
Critically, the IRA defines “greenhouse gas” in those provisions as “the air pollutants carbon dioxide, hydrofluorocarbons, methane, nitrous oxide, perfluorocarbons, and sulfur hexafluoride.” Expect the Supreme Court to revisit it's decision in West Virginia v EPA where it ruled that carbon dioxide was not covered as a pollutant by the Clean Air Act.
Highlights and Links To Resources
Following are some of the highlights of these acts with links to places where you can learn more about the details of how these incentives will work.
UPDATE January, 2023 - IRA Savings Calculator App from Rewiring America.
Tax Credits for New EV Purchases
Clean Vehicle Credit (plug-in & fuel cell)
Rules for Qualification
What Vehicles Qualify?
Tax Credits for Used EV Purchases
Plug-In America lists these metrics
Tax Credits for EV Chargers
Adds funding and clarity to the existing 30% tax credit for EV chargers
What about the PA Drive PA Forward Program?
Incentives from Utilities
Watch the IRS IRC-30D page for latest and definitive info on tax credits for EVs and Chargers. And this Dept of Energy's page with a list of vehicles it considers "assembled in North America".
Incentives for Distributed Solar Energy
See summary details at Dept of Energy's What Changed? page. And the DOE's IIJA Fact Sheet.
Residential and For-Profit On-Site Solar
Non-tax Paying Entities
Income Qualified Assistance
Building Electrification - Heat Pumps, Geothermal HVAC
Tax Credits for Air Source Heat Pumps
Tax Credits for Ground Source (Geothermal) Heat Pumps
Income Qualified Assistance
Building Energy Efficiency
Affordable Housing
Environmental Education
The Environmental Education Grants Program, established by the Environmental Education Act of 1993, mandates that five percent of all pollution fines and penalties collected annually by the Department of Environmental Protection be set aside for environmental education.
Funding is available for Non-formal education (projects outside of the formal, PreK-12 school/higher education setting) or Formal education (projects integrated into the formal, PreK-12 school/higher education curriculums). Government entities are generally excluded, but EACs or climate/energy committees could partner with a local school or aligned non-profit entity to apply for funding to promote community action to reduce carbon emissions.
Program priorities are:
Water
Climate Change
Environmental Justice
The IRA in Pennsylvania
A big chunk of the IRA spending will be given to states to determin exactly how it will be spent to support "clean energy". In PA, that looks like this:
TBD
How will Pennsylvania allocate these funds? Will PA revive the PA Sunshine Program to further support distributed solar? Will we see increased support for EV chargers (L2 & Fast) in the Driving PA Forward Program (the VW settlement)? Will we see increases in the Home Energy Efficiency program?
Or will we see new programs that support community outreach and education entities, like EACs, that are trying to encourage constituents to make informed, long-term decisions related to energy?
Things We Don't Know Yet
While the goals and overall numbers are described in the IRA and IIJA legislation is known, the actual language and rules are yet to be set by the US Internal Revenue Service (IRS). Look for announcements and analysis on how to apply tax credits, what products and who qualifies for these incentives towards the end of 2022.
Examples Of How EACs Can Use IRA Info
Look for tools and analysis articles about total-cost-of-ownership (TOC) for vehicles, heat pumps and on-site solar. Sometimes the best we can do is point to a case study, because there are so many variables: miles driven per year, cost of electricity or gas, price of gasoline at the pump. And predicting the future is always tough. Look for tools that factor in tax credits or "instant discounts".
Here are some that I found that are not associated with a particular merchant:
Alternative Fuels Data Center (DoE) - assumes a 5 yr loan. Need to adjust sticker price for rebates. Compare several cars.
Keemut - compare one EV with one gas vehicle. Let's you predict the future price of gas and electricity.
Pacific Gas & Electric - California-centric. Nice visual comparisons. Includes federal incentives.
Solar Project Builder - from Midwest Renewable Energy Association (MREA), with support from the US Department of Energy Sunshot Initiative.
Efficiency Maine - compare home heating costs using different technologies
How Does All Of This Reduce Inflation?
TBD