The infrastructure package is only a first step toward a clean energy future
We’re delighted to see the Infrastructure Investment and Jobs Act pass both the Senate and the House, and look forward to President Biden signing it into law. It’s a good step in the right direction. However, the Build Back Better Act, which has yet to pass the House or Senate, contains the suite of policies we need to make significant progress towards addressing the climate crisis. What’s more, after both packages are signed into law, much work will need to be done at the state level to ensure the investments support communities and maximize public benefits, all while reducing climate pollution as rapidly and efficiently as possible.
Here are some highlights from the Infrastructure Bill that support clean energy:
- Funding for states and local governments for energy efficiency and renewable energy (discussed further below)
- $21 billion to support commercialization of new clean energy technologies.
- Large sums of funding for grid investments at both the distribution and transmission levels.
- $500 million for clean energy for schools and $5 billion for electric school buses.
- $7.5 billion for electric vehicle charging infrastructure, in addition to significant sums for transit, passenger rail, and other measures to reduce greenhouse gases in transportation.
- The bill also requires each state utility commission to consider a regulatory regime enabling demand response and demand flexibility solutions within 2 years.
States will play a key role in implementation. Several of the key clean energy provisions will now require states to step up to the plate. State energy offices will need to set bold visions for their state and develop plans to execute on their clean energy targets in order to be selected for and successfully implement these federal funds. What’s more, state utility commissions will play an essential role in developing regulations for demand response and in overseeing their investor-owned utilities as they apply for federal funding to update and modernize the grid.
Four programs in particular–outlined below– will support energy efficiency and renewable energy planning, programs and projects. These four programs are administered by state and local governments, and total just over $5 billion in new funding.
$3.5 billion for Weatherization Assistance Program and $500 million for Low Income Home Energy Assistance Program will support energy efficiency upgrades and utility bill assistance for low-income family homes, and these funds can now be used to install cost effective rooftop solar at no charge to the homeowner. However, for this to happen, states will need to proactively update their programs to include rooftop solar as an offering and educate their contractors about the opportunity.
$550 million for Energy Efficiency and Conservation Block Grant, which is a program that was first funded by the 2009 American Recovery and Reinvestment Act, and has since been dormant. The program supports energy efficiency and renewable energy projects, and it’s open to states as well as local governments.
$500 million for State Energy Program will support state energy offices and state energy planning efforts. This bill expands the programs’ purview to also include transmission planning, and it provides $250 million to capitalize revolving loan funds, which are an effective way to maximize the impact of federal funding.
While the infrastructure bill is a good step in the right direction, there is much more work that needs to be done.
The truly significant climate change provisions that are needed to address the crisis are in the Build Back Better Act (BBBA), including $550 billion in provisions to incentivize clean energy deployment and manufacturing through tax credits, rebates and low-cost financing. The BBBA will put people to work revitalizing our ecosystems and making our communities more resilient.
The solar provisions we’re excited to see in the latest draft of the BBBA are as follows:
- A tax credit for 30% off the costs of solar projects. Plus an additional 10% tax credit for renewable energy systems located in low-income communities, or an additional 20% credit for systems serving low-income households.
- Refundability for the residential ITC. This means the full value of the solar tax credit (on average worth $4,500-$6,500) will be available to everyone that purchases a solar system, regardless of their federal income tax bill. The current draft delays the start of this provision until 2024, and we’d like to see it available in 2022 or 2023 at the latest.
- The ITC is made available to non-taxable entities like cities, Tribes, and schools.
- Greenhouse gas reduction fund will provide $29 billion in grants to support deployment of clean energy solutions. 40% of these funds must serve disadvantaged communities.
Let’s pass the BBBA now!