After months of negotiations, last week the Senate reached a tentative agreement on nearly $370 billion in climate and clean energy investments to be contained in the “Inflation Reduction Act of 2022.”
The Senate will vote on the bill as early as next week. If enacted, the Inflation Reduction Act would be a massive step forward to protect our environment. It would help our country and ALL of the communities address multiple aspects of climate change and transition to a cleaner, more equitable, more affordable energy system.
There is still a long way to go on climate policy, however. The Inflation Reduction Act includes provisions that promote environmental justice, though more actions are needed to achieve true equity.
Nonetheless, the act is a large, long-negotiated legislative package that contains many provisions GRID Alternatives and our partners fought to include in the Build Back Better Act, which the House of Representatives approved last year. Here are a few highlights from the Inflation Reduction Act:
- Clean energy tax credits would rise to 30%—up to 50% for certain low-income solar projects—for ten years, and non-taxable entities like nonprofits and schools can receive the credit through direct pay.
- Grants totaling $7 billion would be awarded specifically for residential solar and similar technologies to benefit low- and moderate-income households and environmental justice communities.
- Rebates would promote holistic home electrification, efficiency, and renewable energy, with a focus on low- and moderate-income households.
- A vast majority of American households (those earning less than $400,000 annually) would receive tax credits to purchase electric vehicles: Up to $4,000 for used EVs and up to $7,500 for new EVs.
- Billions of dollars would go towards advancing environmental and climate justice through grants, loans, rural development, affordable housing, grid modernization, and other measures.
The Inflation Reduction Act would reduce United States greenhouse gas emissions by 40% by 2030. We still need to aim higher. The executive action recently suggested by President Biden, for example, would promote community solar and solar for affordable housing, which would adopt further GRID policy recommendations.
This initiative would kick off a tremendous amount of work with federal, state, and local agencies. In the meantime, it builds momentum for the community-powered solutions that GRID Mid-Atlantic builds to advance economic and environmental justice through renewable energy.
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