Vulnerable communities set for big solar gains in Senate bill
Low-income and other marginalized communities that have been largely left behind in the clean energy revolution could see many more community solar projects and rooftop solar panels under the Senate-passed climate package.
The most generous credits would add either a bonus credit of 10% or even 20% for solar projects in disadvantaged communities under certain criteria, in addition to the 30% solar investment tax credit available in the measurement.
“You might consider a 50% ITC to put solar power in a low-income area,” said Jeremy Woodrum, director of congressional affairs for the Solar Energy Industries Association.
The House is expected to pass the Inflation Reduction Act (HR 5376) on August 12 and President Joe Biden is expected to sign it.
Improved incentives for disadvantaged communities are just a few of the provisions of the legislation that would benefit communities of color, rural areas suffering from declining fossil fuel jobs, and other communities bearing the brunt of U.S. pollution. .
The legislation would extend incentives for solar installations for 10 years. But getting up to 50% credit would only be available if projects overcome several hurdles.
For example, to qualify for the more generous base credit of 30%, projects must pay prevailing wages for the first five years of the construction phase and meet apprenticeship requirements. Those who did not would only be eligible for a “base rate” of 6%.
The legislation would pave the way for the solar industry to meet its goal of representing 30% of all electricity generation in the United States by 2030, according to Abigail Ross Hopper, who heads SEIA.
The bill passed by the Senate provides for bonus credits that could be applied in addition to the 30% credit. For example, it would provide an additional 10% investment tax credit for projects built on formerly polluted brownfield land or in an area that has a history of significant employment in the oil, gas or coal – or where coal-fired power plants have closed.
A separate provision would provide an additional 20% credit, which the bill calls an environmental justice solar and wind capacity incentive, for projects that are part of a low-income residential construction project or another project specifically benefiting these communities.
Projects offering broader community benefits – for tribal areas or in low-income communities – would be eligible for a 10% bonus credit.
A net positive on equity?
Environmental justice advocates generally see the legislation as a net benefit to communities that have not benefited much from renewable energy, electric vehicles and other clean energy infrastructure and incentives.
The legislation includes $60 billion in new funding for environmental justice, including a $27 billion greenhouse gas reduction fund that would operate as the nation’s first green bank and focus much of its attention on environmental justice. construction of wind, solar, electric vehicle and energy efficiency projects in marginalized communities.
Improving renewable energy tax credits for these communities is also being considered.
“This is very important. Will this help these communities catch up? Absolutely,” said Raul Garcia, legislative director of Earthjustice’s healthy communities program.
“But there is still a lot to do,” he said. For example, Congress and federal agencies should continue outreach to ensure that marginalized communities are informed of the incentives and other benefits provided by the bill.
Some advocates oppose provisions in the legislation that encourage more fossil fuel drilling and offer incentives for carbon dioxide capture and storage, a process that would reduce key greenhouse gases but not other pollutants. atmospheric emissions from the continued use of fossil fuels.
“In addition to all the positives included in the package, there are significant and deeply concerning trade-offs, with subsidies given to the fossil fuel industry, many of which are reaping record profits at the expense of cash-strapped consumers” , a coalition of Latino groups said in an Aug. 5 statement.