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To the tune of $37 billion in the past month alone.
It took a year and a half, but over the past month, money from the Inflation Reduction Act has started to flow out in earnest. Among the grants given just in the past four weeks are:
$20 million for ice cream factories in Tennessee and Vermont so they can replace their natural gas boilers with climate-friendly ones.
$51 million for a manufacturing plant that makes bathroom faucets and showerheads in Arizona.
And $6.97 billion to stand up a new green community bank that will help small farms, small businesses, households, and schools replace fossil fuels in their buildings and install electric vehicle chargers.
The size of these IRA programs can be difficult to put into perspective, but here’s one way of looking at it: The $37 billion in climate funding spent over the past month exceeds what the recent foreign aid bill will give to Israel, Taiwan, and humanitarian aid in Gaza, combined.
As the election approaches, the Biden administration is spending funds from the IRA much faster than it was last year. As of October 2023, a Heatmap analysis found, only $11.8 billion of the law’s roughly $110 billion in grant funds had been spent. What’s been awarded in just the past month represents about a quarter of the total grant funding allocated under the law.
Most of that comes from the Environmental Protection Agency’s Greenhouse Gas Reduction Fund, a $27 billion pot of money meant to seed green banks around the country. The bulk of its awards went to three coalitions — Climate United Fund, Coalition for Green Capital, and Power Forward Communities — made up of nonprofits, state-level green banks, and community development financial institutions, which are a type of federally certified nonprofit bank.
They’ll use that money to invest in new solar farms, decarbonize homes and apartment buildings, and make communities more resilient to extreme weather and other climate impacts. The returns from those projects will then go back to the coalition and allow them to fund more projects over time. If successful, that will keep those billions cycling in the economy long after other IRA funding has dried up.
Many of the projects funded over the past month work this way, Sam Ricketts, a veteran of Jay Inslee’s presidential campaign and the cofounder of the climate consulting firm S2 Strategies, told me. They are meant to unleash more funding than their dollar amounts would suggest, getting private investors to match or exceed the government’s investment. “You look at EPA’s $20 billion Greenhouse Gas Reduction Fund — they talk about each of those dollars leveraging seven more. We’re talking about a massive transformation here,” he said.
“With the industrial decarbonization program” — a $10 billion set of awards to more than 130 companies, funded with $6 billion of IRA money — “the number that DOE is touting isn’t $6 billion. It’s $20 billion, because all the projects require cost sharing. That money is going to leverage much more” investment, Ricketts said. (The total funding amount also represents awards from the 48C tax credit, which is meant to help build new energy and critical mineral projects in the United States.)
The industrial sector is expected to be the economy’s most emissions-intensive sector by the middle of this decade. The slew of new projects funded by the Energy Department include first-of-a-kind efforts to build facilities that will accomplish key industrial processes — including chemical and cement production, ironmaking, and even glass bottlemaking — while producing vastly less carbon pollution than facilities make today.
“The cool thing about each of these programs is they’re all creating new terrain. [The EPA Greenhouse Gas Reduction Fund] is going to be opening up new market segments, in some cases creating entirely new markets for sustained, leveraged, and recycled public investment in clean energy,” Ricketts said. “The industrial decarbonization programs are first-of-a-kind inroads into a sector that has traditionally been called hard to abate.”
Yet another new EPA program, dubbed “Solar for All,” will spend $7 billion to help 900,000 households get rooftop solar or join a community solar project. It’s joined by the American Climate Corps, another new IRA program that will train and employ 20,000 young people to work on conservation or clean energy projects.
At an Earth Day event in a Virginia park on Monday, President Joe Biden bragged about the Solar for All and American Climate Corps programs. “You'll get paid to fight climate change, learning how to install those solar panels, fight wildfires, rebuild wetlands, weatherize homes, and so much more,” he said.
Biden is “is overseeing the single biggest federal investment in tackling the climate crisis in our nation's history,” Representative Alexandria Ocasio-Cortez said at the event.
The IRA’s more than $100 billion in grant programs do not represent all — or even most — of what the climate law will eventually spend into the economy. The overwhelming majority of the law’s support for decarbonization will come in the form of tax credits and other payments made to households and companies. These subsidies, which by some estimates exceed $1 trillion, will help build new wind and solar farms, manufacture grid-scale batteries and electric vehicles, and refine minerals needed for zero-carbon technologies.
Data on the uptake of these tax credits and subsidies is not yet available. In February, an analysis from three independent modeling organizations found that the IRA was decarbonizing the vehicle fleet at roughly the expected pace, but that carbon reductions from the power grid lagged behind what was expected.
While rich communities can sometimes fund the kind of weatherization or decarbonization projects paid for by these new green banks by raising revenue or taking out bonds, that’s not a possibility for poor communities, he said. “This is still new territory,” Advait Arun, an energy finance researcher at the Center for Public Enterprise, told me. “It’s written and structured in a way that’s meant to mobilize private investment that wouldn’t get to these communities on their own.”
The new EPA program will also pay for “technical assistance,” which will teach local nonprofit, government, and banking leaders how to think about financing and managing long-term clean energy and climate projects.
“This is an unprecedented infusion to ensure that these projects that we want for local decarbonization and resilience actually reach the communities that need them,” Arun said.
Many of the IRA’s incentives can — and likely will — be stacked on top of each other, and the same projects may be able to qualify for grants, loan programs, and tax incentives. So a community solar project that is funded by the EPA green bank will also qualify for its tax credits. So will a large-scale building retrofit or a geothermal project. Because those tax credits cover a larger share of projects in low-income communities, they could sometimes cover more than half a project, Ricketts said.
“The money’s coming. The dollars are here,” Ricketts told me. And they’re not going to stop.
“This cavalry is going to be followed by an even bigger force, which is the tax incentives,” he said. “You’ve got the right hand jab of grants, and you’ve got the big left hook of tax incentives. And combined are the fists of climate-fighting fury.”
Editor’s note: This story originally misstated the amount of GGRF funding that went to three specific coalitions. We regret the error.
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The agency provided a list to the Sierra Club, which in turn provided the list to Heatmap.
Officials at the Environmental Protection Agency remain closed-lipped about which grants they’ve canceled. Earlier this week, however, the office provided a written list to the Sierra Club in response to a Freedom of Information Act request, which begins to shed light on some of the agency’s actions.
The document shows 49 individual grants that were either “canceled” or prevented from being awarded from January 20 through March 7, which is the day the public information office conducted its search in response to the FOIA request. The grants’ total cumulative value is more than $230 million, although some $30 million appears to have already been paid out to recipients.
The numbers don’t quite line up with what the agency has said publicly. The EPA published three press releases between Trump’s inauguration and March 7, announcing that it had canceled a total of 42 grants and “saved” Americans roughly $227 million. In its first such announcement on February 14, the agency said it was canceling a $50 million grant to the Climate Justice Alliance, but the only grant to that organization on the FOIA spreadsheet is listed at $12 million. To make matters more confusing, there are only $185 million worth of EPA grant cuts listed on the Department of Government Efficiency’s website from the same time period. (Zeldin later announced more than 400 additional grant terminations on March 10.)
Nonetheless, the document gives a clearer picture of which grants Administrator Lee Zeldin has targeted. Nearly half of the canceled grants are related to environmental justice initiatives, which is not surprising, given the Trump administration’s directives to root out these types of programs. But nearly as many were funding research into lower-carbon construction materials and better product labeling to prevent greenwashing.
Here’s the full list of grants, by program:
A few more details and observations from this list:
In the original FOIA request, Sierra Club had asked for a lot more information, including communications between EPA and the grant recipients, and explanations for why the grants — which in many cases involved binding contracts between the government and recipients — were being terminated. In its response, EPA said it was still working on the rest of the request and expected to issue a complete response by April 12.
Defenders of the Inflation Reduction Act have hit on what they hope will be a persuasive argument for why it should stay.
With the fate of the Inflation Reduction Act and its tax credits for building and producing clean energy hanging in the balance, the law’s supporters have increasingly turned to dollars-and-cents arguments in favor of its preservation. Since the election, industry and research groups have put out a handful of reports making the broad argument that in addition to higher greenhouse gas emissions, taking away these tax credits would mean higher electricity bills.
The American Clean Power Association put out a report in December, authored by the consulting firm ICF, arguing that “energy tax credits will drive $1.9 trillion in growth, creating 13.7 million jobs and delivering 4x return on investment.”
The Solar Energy Industries Association followed that up last month with a letter citing an analysis by Aurora Energy Research, which found that undoing the tax credits for wind, solar, and storage would reduce clean energy deployment by 237 gigawatts through 2040 and cost nearly 100,000 jobs, all while raising bills by hundreds of dollars in Texas and New York. (Other groups, including the conservative environmental group ConservAmerica and the Clean Energy Buyers Association have commissioned similar research and come up with similar results.)
And just this week, Energy Innovation, a clean energy research group that had previously published widely cited research arguing that clean energy deployment was not linked to the run-up in retail electricity prices, published a report that found repealing the Inflation Reduction Act would “increase cumulative household energy costs by $32 billion” over the next decade, among other economic impacts.
The tax credits “make clean energy even more economic than it already is, particularly for developers,” explained Energy Innovation senior director Robbie Orvis. “When you add more of those technologies, you bring down the electricity cost significantly,” he said.
Historically, the price of fossil fuels like natural gas and coal have set the wholesale price for electricity. With renewables, however, the operating costs associated with procuring those fuels go away. The fewer of those you have, “the lower the price drops,” Orvis said. Without the tax credits to support the growth and deployment of renewables, the analysis found that annual energy costs per U.S. household would go up some $48 annually by 2030, and $68 by 2035.
These arguments come at a time when retail electricity prices in much of the country have grown substantially. Since December 2019, average retail electricity prices have risen from about $0.13 per kilowatt-hour to almost $0.18, according to the Bureau of Labor Statistics. In Massachusetts and California, rates are over $0.30 a kilowatt-hour, according to the Energy Information Administration. As Energy Innovation researchers have pointed out, states with higher renewable penetration sometimes have higher rates, including California, but often do not, as in South Dakota, where 77% of its electricity comes from renewables.
Retail electricity prices are not solely determined by fuel costs Distribution costs for maintaining the whole electrical system are also a factor. In California, for example,it’s these costs that have driven a spike in rates, as utilities have had to harden their grids against wildfires. Across the whole country, utilities have had to ramp up capital investment in grid equipment as it’s aged, driving up distribution costs, a 2024 Energy Innovation report argued.
A similar analysis by Aurora Energy Research (the one cited by SEIA) that just looked at investment and production tax credits for wind, solar, and batteries found that if they were removed, electricity bills would increase hundreds of dollars per year on average, and by as much as $40 per month in New York and $29 per month in Texas.
One reason the bill impact could be so high, Aurora’s Martin Anderson told me, is that states with aggressive goals for decarbonizing the electricity sector would still have to procure clean energy in a world where its deployment would have gotten more expensive. New York is targetinga target for getting 70% of its electricity from renewable sources by 2030, while Minnesota has a goal for its utilities to sell 55% clean electricity by 2035 and could see its average cost increase by $22 a month. Some of these states may have to resort to purchasing renewable energy certificates to make up the difference as new generation projects in the state become less attractive.
Bills in Texas, on the other hand, would likely go up because wind and solar investment would slow down, meaning that Texans’ large-scale energy consumption would be increasingly met with fossil fuels (Texas has a Renewable Portfolio Standard that it has long since surpassed).
This emphasis from industry and advocacy groups on the dollars and cents of clean energy policy is hardly new — when the House of Representatives passed the (doomed) Waxman-Markey cap and trade bill in 2009, then-Speaker of the House Nancy Pelosi told the House, “Remember these four words for what this legislation means: jobs, jobs, jobs, and jobs.”
More recently, when Democratic Senators Martin Heinrich and Tim Kaine hosted a press conference to press their case for preserving the Inflation Reduction Act, the email that landed in reporters’ inboxes read “Heinrich, Kaine Host Press Conference on Trump’s War on Affordable, American-Made Energy.”
“Trump’s war on the Inflation Reduction Act will kill American jobs, raise costs on families, weaken our economic competitiveness, and erode American global energy dominance,” Heinrich told me in an emailed statement. “Trump should end his destructive crusade on affordable energy and start putting the interests of working people first.”
That the impacts and benefits of the IRA are spread between blue and red states speaks to the political calculation of clean energy proponents, hoping that a bill that subsidized solar panels in Texas, battery factories in Georgia, and battery storage in Southern California could bring about a bipartisan alliance to keep it alive. While Congressional Republicans will be scouring the budget for every last dollar to help fund an extension of the 2017 Tax Cuts and Jobs Act, a group of House Republicans have gone on the record in defense of the IRA’s tax credits.
“There's been so much research on the emissions impact of the IRA over the past few years, but there's been comparatively less research on the economic benefits and the household energy benefits,” Orvis said. “And I think that one thing that's become evident in the last year or so is that household energy costs — inflation, fossil fuel prices — those do seem to be more top of mind for Americans.”
Opinion modeling from Heatmap Pro shows that lower utility bills is the number one perceived benefit of renewables in much of the country. The only counties where it isn’t the number one perceived benefit are known for being extremely wealthy, extremely crunchy, or both: Boulder and Denver in Colorado; Multnomah (a.k.a. Portland) in Oregon; Arlington in Virginia; and Chittenden in Vermont.
On environmental justice grants, melting glaciers, and Amazon’s carbon credits
Current conditions: Severe thunderstorms are expected across the Mississippi Valley this weekend • Storm Martinho pushed Portugal’s wind power generation to “historic maximums” • It’s 62 degrees Fahrenheit, cloudy, and very quiet at Heathrow Airport outside London, where a large fire at an electricity substation forced the international travel hub to close.
President Trump invoked emergency powers Thursday to expand production of critical minerals and reduce the nation’s reliance on other countries. The executive order relies on the Defense Production Act, which “grants the president powers to ensure the nation’s defense by expanding and expediting the supply of materials and services from the domestic industrial base.”
Former President Biden invoked the act several times during his term, once to accelerate domestic clean energy production, and another time to boost mining and critical minerals for the nation’s large-capacity battery supply chain. Trump’s order calls for identifying “priority projects” for which permits can be expedited, and directs the Department of the Interior to prioritize mineral production and mining as the “primary land uses” of federal lands that are known to contain minerals.
Critical minerals are used in all kinds of clean tech, including solar panels, EV batteries, and wind turbines. Trump’s executive order doesn’t mention these technologies, but says “transportation, infrastructure, defense capabilities, and the next generation of technology rely upon a secure, predictable, and affordable supply of minerals.”
Anonymous current and former staffers at the Environmental Protection Agency have penned an open letter to the American people, slamming the Trump administration’s attacks on climate grants awarded to nonprofits under the Inflation Reduction Act’s Greenhouse Gas Reduction Fund. The letter, published in Environmental Health News, focuses mostly on the grants that were supposed to go toward environmental justice programs, but have since been frozen under the current administration. For example, Climate United was awarded nearly $7 billion to finance clean energy projects in rural, Tribal, and low-income communities.
“It is a waste of taxpayer dollars for the U.S. government to cancel its agreements with grantees and contractors,” the letter states. “It is fraud for the U.S. government to delay payments for services already received. And it is an abuse of power for the Trump administration to block the IRA laws that were mandated by Congress.”
The lives of 2 billion people, or about a quarter of the human population, are threatened by melting glaciers due to climate change. That’s according to UNESCO’s new World Water Development Report, released to correspond with the UN’s first World Day for Glaciers. “As the world warms, glaciers are melting faster than ever, making the water cycle more unpredictable and extreme,” the report says. “And because of glacial retreat, floods, droughts, landslides, and sea-level rise are intensifying, with devastating consequences for people and nature.” Some key stats about the state of the world’s glaciers:
In case you missed it: Amazon has started selling “high-integrity science-based carbon credits” to its suppliers and business customers, as well as companies that have committed to being net-zero by 2040 in line with Amazon’s Climate Pledge, to help them offset their greenhouse gas emissions.
“The voluntary carbon market has been challenged with issues of transparency, credibility, and the availability of high-quality carbon credits, which has led to skepticism about nature and technological carbon removal as an effective tool to combat climate change,” said Kara Hurst, chief sustainability officer at Amazon. “However, the science is clear: We must halt and reverse deforestation and restore millions of miles of forests to slow the worst effects of climate change. We’re using our size and high vetting standards to help promote additional investments in nature, and we are excited to share this new opportunity with companies who are also committed to the difficult work of decarbonizing their operations.”
The Bureau of Land Management is close to approving the environmental review for a transmission line that would connect to BluEarth Renewables’ Lucky Star wind project, Heatmap’s Jael Holzman reports in The Fight. “This is a huge deal,” she says. “For the last two months it has seemed like nothing wind-related could be approved by the Trump administration. But that may be about to change.”
BLM sent local officials an email March 6 with a draft environmental assessment for the transmission line, which is required for the federal government to approve its right-of-way under the National Environmental Policy Act. According to the draft, the entirety of the wind project is sited on private property and “no longer will require access to BLM-administered land.”
The email suggests this draft environmental assessment may soon be available for public comment. BLM’s web page for the transmission line now states an approval granting right-of-way may come as soon as May. BLM last week did something similar with a transmission line that would go to a solar project proposed entirely on private lands. Holzman wonders: “Could private lands become the workaround du jour under Trump?”
Saudi Aramco, the world’s largest oil producer, this week launched a pilot direct air capture unit capable of removing 12 tons of carbon dioxide per year. In 2023 alone, the company’s Scope 1 and Scope 2 emissions totalled 72.6 million metric tons of carbon dioxide equivalent.