IEC joins those in Iowa and around the nation in celebrating this week’s passage of the Inflation Reduction Act (IRA). Though the name wouldn’t seem to align with environmental efforts, this historic legislation includes the largest-ever package addressing climate issues through clean energy investment, renewable energy tax credits, and much more.
The bill is massive and many—including our staff—are still digging into the specifics. But here’s what we do know at the outset:
· The Inflation Reduction Act of 2022 will address record inflation by paying down our national debt, lowering energy costs, and lowering healthcare costs.
· The Act makes progress on climate goals, including reducing emissions by 40% by the year 2030, and will go a long way to help the U.S. in international climate negotiations.
· The Act centers on decreasing dependence on foreign energy and supply chains as a matter of national security and increasing U.S. energy production and jobs.
So what does it do for Iowa?
Iowans will benefit from many of the Act’s energy security and climate change programs in the next decade. First up are tax credits. The Inflation Reduction Act will return the wind and solar tax credits for both utilities and consumers for 10 years; projects that invest in low-income or tribal communities could receive an enhanced credit. Consumers will now be able to get credits for 30% of expenses for rooftop solar, heat pumps, small wind energy systems through 2032. “These tax credits can be more easily used by nonprofits like cities, counties, and rural electric cooperatives which will be game-changing for rural ratepayers,” says Kerri Johannsen, IEC’s Energy Program Director.
The IRA also provides a stand-alone storage tax credit for the first time ever, and these combined credits provide a major incentive for U.S. manufacturers of these technologies and benefits accruing to legacy coal plant communities and disadvantaged communities.
Iowans can also expect to access some incredible EV tax credits: $7,500 for new vehicles and $4,000 for used vehicles with income-based caps to claim these. It also provides incentives to US manufacturers, with billions allocated to build new clean-vehicle manufacturing facilities.
Energy efficiency and building decarbonization programs will also help to drive down energy costs for the average Iowan, helping to ease the pressure on pocketbooks around the state. The IRA will provide $9 billion in consumer home energy rebate programs to pay for electric appliances such as heat pumps, electric (or induction) cooktops, or energy efficiency retrofits.
“The jobs and economic development that will stem from this bill are substantial, exciting, and game-changing. They will bolster Iowa’s manufacturing economy AND our farm economy, creating quality jobs that will see us through the next decade,” says Johannsen.
State officials, leadership, and others will begin the work of operationalizing the many facets of the bill for local communities and individuals. Groups like IEC and others will help move the benefits of this legislation forward to improve the livelihoods of all Iowans.
Some have spoken out against the more negative elements of the legislation, such as allowing oil and natural gas leasing on federal lands. Like many other public policy initiatives both federally and locally, IEC understands that compromise is a key part of legislative work. Not everything we want is included, and some things we don’t like remain in effect. However, we believe it is a solid start.
Says Johannsen, “Environmental organizations like ours will make every effort to advance the good parts of this bill and address what still needs work. We’re excited to add these tools to our toolkit to accelerate the reduction of greenhouse gases, improve our climate, create good local jobs, and make Iowa a better place to live, work, and explore.”
Updated from a blog originally posted on Wednesday, August 10, 2022, in Energy News
If you are interested in speaking to an IEC staff member about the Inflation Reduction Act for a story, please contact Angelisa Belden, IEC Communications Director, at [email protected].