Years of work crafting climate and clean energy plans have left New England states in a prime position to take advantage of renewable energy incentives in the historic climate bill enacted by Congress over the summer, advocates say.
“We’ve worked really hard to create fertile ground for this type of thing — in five of the six states, you have climate laws already passed,” said Sean Mahoney, executive vice president of the Conservation Law Foundation. “The states have prepared for this day. And now the Inflation Reduction Act is going to provide them with the resources to execute on it.”
The Inflation Reduction Act, or IRA, will allocate an estimated $369 billion over 10 years for energy security and climate change measures, according to the Congressional Budget Office. (It also includes many other forms of aid, including $64 billion to extend the Affordable Care Act and $4 billion for drought relief efforts in 17 western states.)
The wide-ranging climate change measures include tax credits for renewable energy production and storage, loans and grants for energy transmission projects and transmission planning, grants and rebates to replace heavy-duty vehicles with zero-emission vehicles, and financial assistance for clean energy technology manufacturing.
There are also rebates for consumers who install heat pumps and other energy-saving retrofits in their homes. Tax credits are available for the purchase of new or used electric vehicles by income-qualified buyers.
Passage of the law has generated “a whole bunch of enthusiasm” among the members of NECEC, a clean energy trade organization, because they see the coming injection of federal resources and private investment that will attract as an economic buttress in the face of inflation and an “up and down economy,” said Jeremy McDiarmid, vice president for policy and government affairs.
The Northeastern states overall are well positioned to jump on these opportunities because of the policy groundwork that has already been laid, he said.
“Climate targets, energy efficiency goals and programs — all of this makes them competitive,” he said.
Every New England state except New Hampshire has adopted a climate law obligating them to greenhouse gas emissions reductions. Most must cut emissions in half by 2030, and by 100% as of 2050.
Rhode Island has also passed a law requiring 100% of its electricity to be offset by renewables by 2033.
The incentives in the IRA can enhance some of the state-level programs already in place, such as by stacking federal tax credits on top of existing credits for electric vehicles or energy efficiency work, said Charles Rothenberger, climate and energy attorney for Save the Sound, in Connecticut. That state’s CHEAPR program provides incentives ranging from $750 to $4,250 for plug-in hybrid and battery electric vehicles, with the highest incentives for income-qualified buyers.
Other funding streams could help get clean energy or emissions reduction programs off the ground that have previously failed to win approval because of cost concerns, he said.
Because the federal funding has a limited time span, “states can’t take their eyes off the ball,” Rothenberger said. “The goal is to try to get as much done as we can quickly. We can make some structural changes at the state level to make some long-term progress, and show proof of concept through the federal funds.”
Indeed, the IRA’s focus on creating green jobs and green infrastructure could be transformative in how people live and do business, said Amy Boyd, vice president for climate and clean energy policy at the Acadia Center, a clean energy advocacy group that works in Massachusetts, Connecticut, Rhode Island and Maine. And those changes will not be easy or necessary to undo over time, she said.
“As technology moves forward, it doesn’t move back,” she said. “No one’s going to take the insulation out of their house so they can be colder, have more asthma and pay higher bills.”
The act also provides money to the Environmental Protection Agency to help the agency meet the requirements of President Joe Biden’s Justice 40 initiative, which calls for 40% of certain federal investments to benefit disadvantaged communities, Mahoney said. That includes money for frontline communities to address prior wrongs, something the Conservation Law Foundation is particularly interested in, he said.
Billions of dollars are available to help states figure out how to transition to a transportation system that doesn’t rely on gas or diesel, he said.
“We work in a lot of rural areas — how do you make the transportation system work there?” he said. “And in more-dense areas, there are now dollars available to help fulfill the promise of public transit that hasn’t been met in the past.”
In Vermont, passage of the IRA is “galvanizing the need for change” among lawmakers, who seem eager to act, said Peter Sterling, executive director of Renewable Energy Vermont, a clean energy trade association. He said one state senator recently told him that climate change is one of the top three issues he hears about when he’s out campaigning.
The tax credits for renewable energy production make it an ideal time to increase the state’s renewable portfolio standard, something advocates have been pushing for several years, Sterling said.
“Passage of the IRA is the extra shot in the arm Vermont needed to move forward to a 100% renewable energy future,” he said. The IRA also includes money to help states remove the barriers to wide-scale adoption of renewable energy, such as interconnection and transmission bottlenecks. New England will be competitive in vying for those dollars, McDiarmid said, as Connecticut, Maine, Massachusetts, New Hampshire and Rhode Island are already partnering on an initiative exploring ways to improve the electric transmission system to best integrate offshore wind and other renewable resources.