by Sam Dunaiski | Aug 31, 2022 | Advocacy, Biogas, Electrification, Energy Storage, Geothermal, Hydroelectric, Renewables, Solar, Wind
The world of clean energy received a monumental win earlier this month with the passage of the Inflation Reduction Act. The Inflation Reduction Act (IRA) will be the backbone of the United States’ effort to decarbonize our energy sector, spur clean energy implementation across all demographics, and significantly grow the clean energy economy.
Here is a breakdown of the bill’s elements:
Renewable Energy Generation
Investment Tax Credits
- Residential Solar: 30% Investment Tax Credit (ITC) on project costs until the end of 2032, with a step-down of 26% in 2033 and 22% in 2034. Credits are retroactive for residential installations from 1/1/2022, meaning that homeowners who installed a solar array at any point in 2022 will qualify for the 30% ITC.
- Commercial Solar: 30% ITC on project costs until the end of 2024 (ITC on commercial solar is also retroactive to 1/1/2022). Beginning in 2025, the ITC will be replaced by technology-neutral credits, with the following rules in place:
- 6% base credit; bonus credits up to 30% of costs if the project meets union labor, prevailing wage, and apprenticeship requirements. These requirements do not apply to projects less than 1 megawatt (MW) in size.
- 10% bonus credits if the project meets domestic content requirements.
- 10% bonus credits if the project is sited in an “energy community” – a brownfield site or a community with a recent coal plant closure.
- 10% bonus credits if the project is sited in a low-income community. This only applies to projects that are 5 MW and less.
- 20% bonus credits if the project qualifies as directly serving a low-income residential facility or another economic benefit system.
- Interconnection costs -for projects less than 5 MW- with the utility can be included in the credits.
Production Tax Credits
While the Investment Tax Credit applies to the upfront purchase of parts, materials, and labor, the Production Tax Credit (PTC) functions differently. This credit is a direct payment and applies to the production or output of the generation source. This generation source can be solar, wind, geothermal, biomass, and hydropower, to name a few. These credits are also retroactive from 1/1/2022.
Here is how the PTC breaks down:
- Direct pay value: $0.026 per kilowatt-hour (kWh) starting in 2022; rate rises with inflation.
- Bonus credit of 1.5 cents/kWh if union labor, prevailing wage, and apprenticeship requirements are met.
- 10% bonus credits if domestic content requirements are met.
- 10% bonus credits if the project is sited in an “energy community” – a brownfield site or a community with a recent coal plant closure.
- The PTC is available for nonprofits, state and local governments, rural electric cooperatives, tribal governments, and/or other tax-exempt entities. These organizations previously did not qualify for the ITC.
- PTC will also apply to utility-scale projects.
- Credits are available for ten years after the project is placed into service.
- Direct pay/PTC is not available for residential solar installations.
- PTC is transferable after 2022; however not for individual taxpayers.
- Commercial solar projects can choose either the ITC or the PTC.
Electric Vehicles
New EVs: (Effective 8/16/2022)
- $7,500 tax credit to be divided into two separate credits:
- $3,750 credit for electric vehicles with batteries produced in North America.
- $3,750 credit for electric vehicles using a certain percentage of critical battery minerals extracted or processed in the U.S.
- Vehicles meeting only one requirement will only be eligible for a $3,750 credit.
- Vehicles must cost less than:
- Vans < $80,000
- Pickups and SUVs < $80,000
- Cars < $55,000
- Income requirements:
- Joint tax return < $300,000
- Head of household < $225,000
- Single-payer < $150,000
- Credit will eliminate the limit of 200,000 vehicles per manufacturer.
Commercial Clean Vehicles: (Effective 01/01/23)
- Up to $40,000 tax credit for commercial electric vehicles.
Used EVs: (Effective 01/01/2023)
- $4,000 tax credit or 30% of the vehicle’s sale price.
- The vehicle’s model year must be at least two years older than the current “new” model year.
- Vehicle cost must be less than $25,000.
- Income requirements:
- Joint tax return <$150,000
- Head of household <$112,300
- Single-payer <$75,000
- Used EV tax credits will continue until the end of 2032.
EV-Charging:
- Credits for EV-charging equipment and infrastructure will increase up to $100,000.
- Equipment must be located in a qualified census tract, with similar bonus credits if prevailing wage and apprenticeship requirements are met.
- A direct pay or PTC option is available for charging with transferrable credits.
- Credits will be available until 2032.
Battery Storage
Effective as of 1/1/2023
- 30% ITC for the cost of installation; credits last until 2033. To qualify, batteries must be larger than 3kWh for residential installations and larger than 5kWh for commercial installations.
- Commercial battery credits have similar sliding scales as other ITC items: baseline of 6% with increasing credits for prevailing wage, labor, location, etc.
- Battery storage systems will no longer need to be coupled with solar generation systems to qualify for tax credits.
Energy Efficiency and Electrification
Effective as of 1/1/2023
Federal Tax Credit
- Heat Pumps: 30% of costs, up to $2,000
- Electric Upgrades: 50% of costs, up to $1,200/year
Upfront Discounts
- Incentive levels and eligibility are determined by income
- Heat Pumps: rebates for up to $8,000
- Electric Upgrades: up to $4,000 for breaker boxes/electric service; $2,500 for wiring, and $1,600 for insulation/venting/sealing
Manufacturing and Production
Effective as of 1/1/2023
- $30 billion in PTC to manufacture solar panels, trackers, inverters, wind turbines, batteries, and other critical minerals.
- Solar PV cells – $0.04/watt
- Solar-grade polysilicon – $3/kg
- Solar modules – $0.07/watt
- Wind components – 10% of the sales price
- Battery cells – $35/kWh
- Critical minerals – 10% of the cost of production
- $10 billion in ITC funding for building new facilities to manufacture clean energy products; $4 billion of these funds must be allocated to “energy communities.”
- $500M for manufacturing heat pumps and processing of critical minerals necessary for heat pump production.
Other Items
- Carbon Sequestration Credits (ITC or PTC) for facilities that begin construction before 2033 and provide direct air capture of carbon dioxide. Credits will be issued by a metric ton of carbon capture.
- Clean Hydrogen – credits for production -by unit- of green and blue hydrogen that can be used to offset traditionally carbon-based fuels.
- Sustainable Aviation Fuel – credits for SAF produced by unit (gallon) with increasing credits based on a percentage of greenhouse gas reduction.
- Biodiesel/Alternative Fuels – production credits for fuels produced based on life-cycle emission levels.
- Methane Fees – fees imposed by EPA for facilities that emit more than 25,000 metric tons of CO2 annually.
Additional Provisions
- $500 million for the Defense Production Act, some of which could be used for solar manufacturing.
- Greenhouse Gas Reduction Fund totaling $29 billion overseen by the Environmental Protection Agency.
- Climate Pollution Reduction Grants to state and local governments totaling $5 billion.
- Environmental and Climate Justice Block Grants: $3 billion for disadvantaged communities.
- $2 billion in loan authority for new transmission construction in designated national interest corridors.
- $760 million for the Department of Energy to issue grants to state, local or tribal entities to facilitate siting of high-voltage interstate transmission.
- Additional $1 billion for rural renewable energy electrification loans and expansion of the program to include storage.
- Additional $1 billion for Rural Energy for America Program (REAP), with total grants limited to 50% of the total cost of an eligible project.
- $9.6 billion for loans and financing for rural co-ops to purchase renewable energy, generation, zero-emission systems, and related transmission, limited to 25% of total cost.
- Incentives for build-out of electric vehicle charging networks.
- Extension, expansion, and changes to electric vehicle tax credits, including a new credit for purchasing used EVs.
Conclusion
Much of the implementation and administration of the Inflation Reduction Act is still not understood. This document is meant to summarize the items in the bill that RENEW Wisconsin considers particularly important to the clean energy transition in our state.
For additional information, please utilize the following resources:
Please contact Sam Dunaiski (sam@renewwisconsin.org) with questions.
by RENEW Wisconsin | Aug 15, 2022 | Advocacy, Community, Electrification, Policy, Press Release, Renewables
After decades of inaction punctuated by occasional half-measures, Congress has passed monumental legislation committing the nation to pursue a clean energy transformation that will benefit all sectors of American society.
The enactment of the Inflation Reduction Act, which cleared the House of Representatives today, will signal to the rest of the world that the United States is “all in” on decarbonizing the domestic economy while greatly expanding investment and career opportunities in the clean energy arena.
Specifically, this legislation represents a 10-year commitment to scaling up the deployment of clean energy technologies, electric vehicles, and electrified heating and cooling systems produced and delivered by U.S. companies.
With its emphasis on strengthening America’s productive capacity and workforce to deliver clean energy to our fellow citizens, this legislation is genuinely an industrial-strength response to the climate emergency enveloping our planet.
We at RENEW look forward to working collaboratively with federal and state agencies, businesses, farmers, local governments, and schools to help deliver the benefits of the clean energy transformation to every Wisconsinite.
by Jodi Jean Amble | Jul 1, 2022 | Electric Vehicles, Events, Local Government, Programs, RENEW Wisconsin, Renewables, Solar, Solar for Good
Last weekend, the Midwest Renewable Energy Association (MREA) hosted the 31st Annual Energy Fair, bringing people together to learn about sustainability and clean energy, connect with others, and take action toward a sustainable future. The Fair featured workshops, exhibitors, live music, inspiring keynote speakers, family fun, great local food, and more.
RENEW staff presented some compelling workshops and you can download slides from their presentations below.
A Zero-Carbon Grid – How We Get There
Andrew Kell, RENEW Policy Analyst, discussed zero-carbon goals and ongoing planning efforts in Wisconsin. Andrew also discussed a joint study to address policy considerations of this clean energy transition.
Health Benefits of Electric Vehicle Adoption
Christina Zordani, Electric Vehicle Policy Intern at RENEW, discussed a Wisconsin with 100% clean-power electric vehicle adoption. In this workshop, attendees learned how a renewable-powered transportation network would bring significant economic and health benefits to Wisconsin.
Vehicle-to-Grid: Opportunities and Challenges
Francisco Sayu, RENEW Emerging Technology Director, discussed how Vehicle-to-Grid technology unlocks the energy stored in electric vehicles and opens opportunities for energy trading, energy management, and grid resiliency. The workshop delved into two case studies.
Energy Policy and Politics in Wisconsin
Jim Boullion, RENEW Government Affairs Director, reviewed the busiest legislative session for energy-related issues in many years, including solar financing, community solar, and electric vehicle rules.
Small Solar Farms in Wisconsin – Why More Are Needed
Michael Vickerman, RENEW Policy Director, discussed initiatives to expand Wisconsin’s solar marketplace’s middle tier: offsite arrays serving groups of self-selecting customers or whole communities across Wisconsin.
A Clean Energy Toolkit for Local Governments
Sam Dunaiski, RENEW Resources Director, discussed towns, cities, and counties in WI that are building the clean energy economy. By investing in renewables, WI communities are reducing carbon emissions, investing locally, and creating energy independence.
by Michael Vickerman | Jun 3, 2022 | Advocacy, PSC Priorities, Public Service Commission, Renewables, Solar
On May 26th two petitions were filed at the Public Service Commission (PSC) seeking rulings to clarify the long-simmering issue of third party-financed renewable energy generation serving individual customers behind their meters.
In one of the petitions (Docket No. 9300-DR-106), Vote Solar, a national nonprofit advocacy organization with 500 members residing in Wisconsin, asks the agency to affirm the legality of a tax-financed solar system installed at the residence of one of its Wisconsin members. In the other petition (Docket No. 9300-DR-105), Custer-based Midwest Renewable Energy Association seeks a similar affirmation, based on relevant case law precedents, enabling customers to host third party-financed electric generation systems on their premises without fear of being designated a public utility. You can read the petitions online at the above-referenced docket numbers on the PSC’s website.
Although the two petitions take different approaches to the legal question at issue, a positive ruling from the PSC on either or both of these filings would achieve the desired result: the ability of individual customers to access electricity generated on their premises from installations owned by third parties. For that reason, RENEW is urging stakeholders—solar contractors, climate and energy justice advocacy organizations, local governments, and legislators–to signal their support for both petitions through statements of support filed at the PSC.
When the PSC receives a Declaratory Ruling petition, it is obligated to open a 20-day initial comment window prior to deciding whether or not to accept that petition. Accepting the petition is a prerequisite for rendering a decision on the legal merits of the case.
RENEW is asking stakeholders to submit statements in both proceedings urging the PSC to accept the petitions and convene a proceeding to affirm third-party financing on its merits, emphasizing the following themes:
- Businesses need clarity on this legal question before they will commit to providing renewable energy to customers with equipment they would own. Though customer demand for solar PV is growing, the ongoing legal ambiguity acts as a powerful disincentive to businesses contemplating investments in equipment and staff to serve that part of the market. The risk of fighting expensive legal battles with utilities also diminishes business appetite for doing business in Wisconsin.
- Third-party financing eliminates the upfront financial commitment that often stops low and middle-income households from pursuing solar. As a market-building tool, third-party financing can expand the residential customer base more effectively than either rebates or tax credits. Third-party financing is a linchpin mechanism for securing a just energy transition that engages customers of all income levels.
- The lack of legal clarity on this issue is an unjustifiable restriction on property owners’ ability to supply themselves with clean energy produced on their premises. The PSC has had several opportunities in recent years to settle this issue but declined to do so. It is past time for the PSC to clear a path for the homeowners, businesses, and nonprofits desiring to access onsite solar power owned by a third party.
Currently, Wisconsin case law allows for third-party financing of energy projects, but some electric utilities have denied interconnection to installations that would have been owned by third parties. They contend that such installations should be regulated as public utilities, even though they are designed to supply energy to only one entity: the host customer. In our view, a business that installs and operates energy equipment on a customer’s property for that customer’s exclusive use should not be regulated as a public utility.
PSC affirmation for third-party financing is essential to spreading the benefits of clean energy to all Wisconsin utility customers.
The deadline for submitting comments is June 14th.
If you have questions or represent a business or organization that would like to engage on this issue, please contact Michael Vickerman at mvickerman@renewwisconsin.org.
by Jodi Jean Amble | Jun 1, 2022 | Clean Energy Works, Hydroelectric, Jobs, Renewables, Solar, Wind
Akinlana Abdalla is tall and self-assured with a gentle, almost playful demeanor. He was “the kid who always got in trouble for taking his toys apart to see how they worked.” This curiosity and innate engineering mind make him particularly good at his job as a Wind Turbine Repair Specialist at Ingeteam in Milwaukee, WI, where teams of engineers and technicians specialize in supporting solar, wind, hydro, and other renewable energy products.
Akinlana was born in Milwaukee, where he now lives with his wife and children. He has an extensive background in commercial construction and is a Journeymen Carpenter by trade. His career took him from deep tunnel mining through Laborers’ Local 113 to building bridges for Zenith Tech, later starting a business with his wife, and eventually earning an undergraduate degree in general management. He was attracted to Ingeteam because he wanted to move away from management and get back to a more “hands-on” work environment aligned with his values.
Ingeteam is a global renewable energy solutions company. Their 140,000 square-foot state-of-the-art production facility in Milwaukee is the only place in the United States where wind turbines are built by an American workforce.
Ingeteam customers send wind turbine generators that cannot be repaired up the tower. Akinlana and his team perform mechanical and electrical diagnostics on the generators to determine their failure. Ingeteam then submits a report to the customer and a cost estimate for the needed repairs. If the customer decides to move forward with the repairs, Akinlana and his team “repair it and send it back to the customer like new,” adhering to the Code of Excellence established by IBEW 2150.
“You never know what you’re going to get,” Akinlana said. “There’s no monotony. Every day is something different. We could get the same [generator] models coming in on one truck, but all of them will have different issues. When we open it up, it’s just fun trying to get to the bottom of what the root cause of a failure is.”
While it seems as if Akinlana was born to do this work, he thinks his success is determined by having a positive attitude and complementing it with aptitude.
“If you have a good attitude, that’s 90% of it,” he said. “Developing your mechanical aptitude and other skills to complete a repair is something that can be taught. But it starts with just having a can-do attitude and just appreciating the opportunity to be able to do what you do.”
His passion for his work extends beyond his enjoyment of taking things apart and then putting them back together. Akinlana has a deep sense of the impact of his work.
“Ingeteam provides something imperative for preserving and conserving the future environment, not only for ourselves but for our children and generations to come,” he said. “Because we know that we have not learned to discipline ourselves from gluttonous consumption, we have to have green energy.”
“This job aligns with my personal social responsibility.” Akinlana continued. “It’s nice to work for an entity where you share a passion for ensuring that we preserve our environment. Being an avid outdoorsman, being out in nature with my children, fishing, and hiking, it’s important to me that I give back. To be able to work doing something that allows me to do that, I think is absolutely profound.”
His team appreciates his passion and skills. Garan Chivinski is the Human Resources Manager at Ingeteam and the one who introduced him to RENEW Wisconsin.
“He’s a wealth of knowledge,” Garan said. “We’re seeing a time when those units [wind turbine generators] are coming back in, and they need to be serviced. They need some love and care to renew themselves and not create excess waste that they weren’t intended to create. AK [Akinlana] has really led that here for us, to get absolutely every single last spin, every single last value out of that resource possible for our customers and for the community. That’s why when you asked about somebody who might be your boots on the ground, somebody who’s the future of the wind industry in Wisconsin, this is the guy.”
Akinlana IS a wealth of knowledge. He’s also the kind of person who considers his work and actions and their effect on the world. This kind of thoughtfulness and passion is inspiring, and it’s easy to see why he is so respected and valued at Ingeteam.
“It’s nice to watch Elon Musk trying to fly off into another part of space,” Akinlana added. “But ultimately, when you see them go up in the rocket, you’re just going into another part of where you already are. Interesting, right? The reality is that we have this one small globe to live on, and no amount of money will get you away from that reality. Even if you set up something on Mars, you would have to come back here to get resources to live off of there. We have this [Earth], and we have to take care of this. Our level of consumption without trying to curb the adverse effects is damaging for the future. So that’s why this work is really, really important to me. I enjoy it every day. It’s not even work, not work at all.”
by Jodi Jean Amble | May 17, 2022 | Advocacy, Community, Electric Vehicles, Jobs, Local Initiatives, Renewables, Solar, Wind
RENEW Wisconsin has launched two state-wide communications campaigns to promote the benefits of clean energy investments in Wisconsin. The two campaigns, “Clean Energy Works for Wisconsin” and “Clean Energy is Made in Wisconsin,” include print and digital ads and shareable communications assets for partners and clean energy advocates.
Wisconsin’s clean energy workforce is 70,000 strong, with good-paying local jobs like installing solar and electric vehicle charging stations, manufacturing energy storage systems, servicing wind turbines, and retrofitting buildings. Clean energy job growth is gaining momentum from state and federal clean energy and electric transportation commitments, federal funds to support these goals, and an increased interest in clean energy investments from the public sector. The “Clean Energy Works for Wisconsin” campaign highlights the job potential of continued investment in electric transportation and Wisconsin clean energy.
“Over the next five years, Wisconsin can expect to receive $79 million in federal funds from the bipartisan infrastructure law,” said Francisco Sayu, Emerging Technologies Director at RENEW Wisconsin. “Wisconsin will also have the opportunity to apply for $2.5 billion in competitive grant funding dedicated to electric vehicle corridors and community charging. Building a network of electric vehicle charging stations will reduce emissions, improve air quality, and create thousands of good-paying jobs and is a tremendous opportunity for Wisconsin residents.”
In 2019, Governor Evers set a goal that all electricity consumed in the state will be 100% carbon-free by 2050, and in 2022 introduced Wisconsin’s first-ever Clean Energy Plan. Currently, renewable energy only accounts for 13% of all electricity sold in Wisconsin. According to the U.S. Energy Information Administration, Wisconsin consumes almost six times as much energy as it produces and spends billions on coal, oil, and natural gas every year. The “Clean Energy is Made in Wisconsin” campaign presents a vision of keeping more energy dollars in-state by investing in homegrown renewable energy.
“State and federal investments are moving us toward our clean energy goals, but we need to maximize the benefits of this energy transition for Wisconsin residents,” said Heather Allen, Executive Director at RENEW Wisconsin. “We will need an ‘all of the above’ and ‘all hands on deck’ approach to shape our clean energy future. This means smart investments in homegrown renewable energy and clean transportation.”
Print and digital ads are already circulating in media outlets across the state. To learn more and help amplify Wisconsin’s clean energy opportunities, please visit the “Clean Energy Works for Wisconsin” and “Clean Energy is Made in Wisconsin” landing pages.
