(The sixth in a series on climate change in the county)
GHENT—The federal Inflation Reduction Act (IRA) offers county residents, businesses and communities a host of opportunities to reduce their “carbon footprint” and earn tax credits and financial incentives by moving to new technologies. In general, those technologies generate electricity from renewable sources that don’t burn gas or oil.
These federal benefits are on top of the many state incentives.
Historians will recall that in 1936, as part of the New Deal, Congress passed the Rural Electrification Act, which provided low-cost loans to farmer cooperatives to bring electrification to rural America. Now, everything old is new again. Much of the IRA is aimed at providing “clean”—not fossil-fuel generated—energy to the country, and many of the incentives it provides are specific to rural areas like Columbia County.
This article provides an overview; later articles will look more deeply at some of the new technologies, opportunities and challenges presented by the IRA and state law.
Under the IRA, loans and loan forgiveness are available to local governments, non-profits and for-profit businesses for facilities that generate renewable electricity (from solar, wind, hydropower, biomass or geothermal sources).
(HVAC) systems, insulation, lighting
Rural small businesses and agricultural producers may receive guaranteed loan financing and grants for renewable energy systems and for the purchase, installation and construction of energy-efficient improvements such as heating and air-cooling (HVAC) systems, insulation, lighting, doors and windows and the replacement of energy-inefficient equipment.
Since about 40% of the nation’s carbon emissions come from homes and vehicles, many of the IRA provisions target those uses.
Homeowners and renters
Homeowners and renters can receive tax credits for installing energy efficient improvements, including for HVAC equipment, such as heat pumps, as well as new windows and doors and the purchase of clean energy equipment (such as solar and geothermal) as well as battery storage.
Low-income families (earning less than 80% of area median income (AMI)) can receive up to 100% (capped at $14,000) and moderate- income families (earning up to 150% of AMI) up to 50% of the costs. Effective October 1, 2022 AMI for the county was $88,700.
Heat pumps, which can both heat and cool a home, are said to use 30% of the energy that oil or natural gas furnaces draw and to heat at a more consistent temperature.
Likewise, owners and long-term lessees of commercial businesses can receive tax deductions for energy-efficient improvements. Certain properties housing low-income residents are eligible for an array of grants and loans for similar upgrades.
Tax credits (up to $7,500) are available for the purchase of certain electric vehicles, generally those costing less than $55,000 (or $80,000 in the case of vans, SUVs and pickups), provided battery components are essentially manufactured or assembled in the U.S. Additional credit is available for vehicles containing minerals extracted here.
According to Rewiring America, a non-profit that provides information on clean electrification for consumers, a typical electric vehicle costs only 5 cents/mile to drive, as against 13 cents for the typical gasoline vehicle.
Credits (up to $4,000) are also available to purchasers of preowned “clean vehicles” who pay less than $25,000, buy from a dealer and meet certain income requirements.
Businesses buying or leasing “green” commercial vehicles may also receive credits. Moreover, local governmental entities and non-profits, because they do not benefit from tax credits, can receive direct payments from the federal government in lieu of credits.
Incentives are also available for the replacement of certain heavy duty (Class 6 and 7) “green” commercial vehicles.
Agricultural /and forest land
Specific to agricultural producers and forest landowners, technical and financial assistance, including in some cases annual payments, will be available to implement conservation practices that directly improve soil carbon, reduce nitrogen losses, and reduce, capture, avoid or sequester carbon and other emissions associated with agricultural production.
Support for conservation easements in land (including wetlands and working farms) that will reduce emissions is also available, as are other forms of funding to assist conservation entities and efforts.
Grants to assist beginning farmers and forest landowners living in high poverty areas are available. Grant assistance through federally-funded state-administered plans to assist non-industrial private forest-owners to implement practices that increase carbon sequestration and storage will be made.
Recognizing that with new technology comes the need to train a workforce to install and maintain it, the IRA also offers funding and technical assistance to non-profit groups, local governments and higher education institutions for projects to monitor and remediate air and other pollution and to invest in low- and zero-emission and resilient technologies and, importantly, in related workforce development.
Grants are also available to urban entities to implement projects that improve walkability and affordable transportation.
A complete guide to IRA benefits has been published by the Biden administration and can be found at www.whitehouse.gov. (“Building a Clean Energy Economy”). Consumer-friendly guidance is available at RewiringAmerica.org.