Yes- we are jumping on the band wagon along with every other clean energy, political and economic blog in the U.S. and writing about the Inflation Reduction Act. But the reason isn’t because we are hoping to have a better angle or new analysis, it’s because the passage of this bill is a really big deal. With such a divided [and nearly defunct] Congress, the Democrats united their votes in both Houses and pushed a large piece of legislation through that addressed both healthcare costs and clean energy & climate goals. To be clear, although the bill accomplishes a lot it did not go as far as to incorporate the Civilian Climate Corps Biden ran on and included in Executive Order 14008. Nor does it allow for a phase out of those dirty fossil fuel projects (the oil companies really need to read the memo that it’s not the 1960s anymore). But it does accomplish some much-needed provisions to move the U.S. forward and join the rest of the world in a bolder renewable energy future.
The first, and most obvious, clean energy win is the extension of the ITC, amping it back up to 30%. For years, the ITC has been on an unstable yo-yo ride as part of a bargaining chip, added to various bills, taken out, put back in then finally became a part of a 2015 bill (and subsequent 2020 spending package) that put its projection at 30% until the end of 2021 with a step down to 26% in 2022, another step down that was scheduled for next year (2023) was a second step down to 22% before a final step down to *only 10%* in 2024 and beyond. This was devastating to the industry, as the federal solar tax credit had been a great incentive for both businesses and residences to go solar. But the Inflation Reduction Act set the ITC back at 30% for the next decade with prevailing wage stipulations in place (LOVE this).
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