Energy industry praises climate, health care provisions passed through Inflation Reduction Act
After the House passed the Inflation Reduction Act last week, the energy industry reacted in a big way, with clean energy advocates praising its provisions on emissions reduction, renewables support, and electric vehicle tax credits in particular.
The Edison Electric Institute (EEI), which represents U.S. investor-owned electric companies, released a statement praising the bill’s tax credits as a means to firm up long-term benefits for electricity customers and hasten the development of a carbon-free economy.
“This legislation firmly places the United States at the forefront of global efforts to drive down carbon emissions, especially when paired with the historic RDD&D funding included in the bipartisan infrastructure law,” EEI President Tom Kuhn said. “It also provides much-needed certainty to America’s electric companies over the next decade as they work to deploy clean energy and carbon-free technologies. The innovation that this technology-neutral legislation will unlock also will create good-paying union jobs here in America. We applaud Congress for passing this monumental bill and sending it to President Biden’s desk.”
The Senate approved the legislation, which will now head to President Joe Biden’s desk for his signature. In addition to investments meant to counter inflation, the bill seeks to invest in domestic energy production/manufacturing and, in a win for the Biden administration’s climate agenda, to reduce carbon emissions by approximately 40 percent by 2030. While the final version didn’t include everything the majority of Democrats had sought, it still represents the largest climate investment ever from the United States.
In all, the Inflation Reduction Act includes about $369 billion on spending for climate-related issues. It offers $9 billion in consumer home energy rebate programs and a $10 billion investment tax credit to build clean technology manufacturing facilities. It extends consumer tax credits for home heat pumps, rooftop solar, electric HVAC, and water heats for 10 years. Further, it offers a $4,000 tax credit for the purchase of used electric vehicles and up to $7,500 for consumers to buy new EVs, along with billions in additional funding for electric U.S. Postal Service trucks, heavy duty vehicles, and zero-emission technology for U.S. ports.
While it includes compromises that will benefit fossil fuel development – such as requiring lease sales for offshore drilling and tax incentives for coal and gas plants – the bill kept in a methane emissions reduction program, a new polluter tax to fund Superfund toxic waste site clean-ups, and $50 million for the inventory and protection of old-growth forests on National Forest System land.
“Nature and human ingenuity have made it increasingly possible for us to power our homes, cars, and businesses with clean, renewable sources such as the sun and wind,” Lisa Frank, executive director of Environment America’s Washington Legislative Office, said. “And as the climate warms, making this transition is of the utmost urgency. The renewable energy and electric vehicle tax incentives in the Inflation Reduction Act are a real game-changer that will make it cheaper and easier for individuals, businesses, school districts, and more to ‘go solar,’ swap out old, polluting vehicles, and save energy. Climate change affects every one of us. Now, this bill helps us all to be part of the solution. It’s also a compromise and does far too much for fossil fuels, but it’s a big step forward.”
Similarly, the nonprofit American Council on Renewable Energy (ACORE) called the legislation the culmination of years of efforts between allies – and another step in a larger effort to reduce greenhouse gas emissions. According to ACORE president and CEO Gregory Wetstone, it is long-awaited legislation.
“For more than a century, our tax code has been weighted to promote fossil fuels, but now we’re just a presidential signature away from a level playing field that will unleash dramatic clean energy growth,” Wetstone said. “We cannot say that this bill alone will achieve our climate goals, but for the first time, it puts us on the path.”
