Creation Care Mom

As we have now passed the 2 year mark of the signing of this law, lots of new data is being released on its impacts. Everything from where the money is going, who is benefitting the most, and what may still be at risk if the Republicans regain control of the federal government.

If you aren’t familiar with this legislation, it is considered Biden’s signature climate legislation and has put real money towards bringing us into a net-zero future. Passed by the Senate in August of 2022, only by a tie-breaking vote cast by Kamala Harris, and then quickly moved through the House.

Like most congressional legislation, there is a lot in it. For consumers, it includes tax credits for the installation of solar, rebates for weatherization and electrification of homes, and rebates for EVs both new and used. For developers of clean energy projects, it extended the soon expiring tax credits for production and investment. Penalties from the EPA for leaking methane, a powerful greenhouse gas, from oil and gas infrastructure incentivizes companies to comply with EPA regulations. Additional investments are to be made in carbon capture and storage, forest conservation and urban forestry, and climate-smart agriculture. Significant funds were directed at disadvantaged communities in part because they are the most affected by all kinds of pollution. Acknowledging the need for manufacturing of all kinds of clean and green products domestically, significant funds were designated to establish those supply chains.

So how has it done?

The boom in clean energy projects is astounding! Battery plants upon battery plants, solar panel factories, wind energy facilities, facilities to process the raw materials needed. The projects don’t care if the state votes red or blue, so no matter your party affiliation your state is probably benefitting. My home state of Kansas it getting the boost from a large battery production facility operated by Panasonic Energy. It will eventually employ approximately 4,000 people with wages in the $20-$29/hour range. Definitely a living wage job.

That speaks to how the benefits of the IRA are showing up. Two specific rules for clean energy developers are reshaping the solar installation job market. To qualify for the 30% solar credit companies must pay their employees a living wage according to their region and hire a designated number of apprentices. These are millions of jobs every year that will be living wage jobs with the potential for unionization (larger voice for laborers). Apprentices give us a pathway for growth of qualified installers as industry growth accelerates. These same labor rules apply across the spectrum of manufacturing, carbon capture, EV charging, hydrogen plants, etc. We have yet to see the full force of what this shift in labor laws will do for the workers in our country.

At the same time, many Americans have taken advantage of the consumer tax credits. You can read the New York Times analysis here for free! We claimed around $8 billion in credits last year. Solar panel credits topped the list followed by many of the energy efficiency credits including, improving insulation, exterior windows and doors, more efficient air conditioners, and the installation of heat pumps. These numbers don’t include those who have benefitted from EV credits. I couldn’t find any numbers for EVs but I expect the number is high!

So what could go wrong?

We face a very important election in November that will determine the fate of most IRA programs. Trump claims that he wants to eliminate most if not all of the consumer tax credits which will make it harder for consumers to reduce their overall energy consumption. He has focused significant backlash against EVs in particular, however, his recent friendship with Elon Musk has had him changing his tune. It is hard to say if he will be successful in ending the production and manufacturing tax credits. Much of that investment has flowed into “red” states and so he will likely face more opposition there. Most likely Trump will direct other leadership to drag their feet with implementation and slow the impact of the IRA as much as possible.

Kamala Harris already knows that implementation is the key to the effectiveness of the IRA climate impact. I anticipate that rather than deploy her own major climate legislation she will focus on implementing the full breadth of the IRA. She may seek additional legislation to tweak, expand, and further accelerate programs that the IRA initiated.

What are the challenges to implementation?

Community opposition. The areas with the least resistance to solar and wind development are disappearing quickly. To continue to build out renewable generation, we need to win the hearts and minds of the community. For example, my county passed a ban on commercial wind projects, and a moratorium on commercial solar. The only options now available are for personal or business level development. Much of the opposition is based in fake news and conspiracy theories, but there are some legitimate concerns to be addressed.

Power Transmission challenges. It doesn’t matter how much renewable generation is built if it can’t plug into the grid. The power lines necessary to carry all of this additional power from where it is generated to where it is used are almost non-existent. Long range transmission is taking 10 years for permitting before construction even begins. Who wants to build a project when you can’t sell the electricity for 5-10 years?

Lack of awareness. How well did you know all of the information in this blog today? The impact of this legislation is limited by the public’s knowledge. There is money available to the consumer, but it does little good if no one knows about it. New jobs in “green” industries and manufacturing are growing at a rapid pace, will the next generation be ready to fill them? Only if they know.

I’d love to hear from you! Let me know what you think of the IRA. What aspects are you excited about? What worries you?