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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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A conversation with VDE Americas CEO Brian Grenko.
This week’s Q&A is about hail. Last week, we explained how and why hail storm damage in Texas may have helped galvanize opposition to renewable energy there. So I decided to reach out to Brian Grenko, CEO of renewables engineering advisory firm VDE Americas, to talk about how developers can make sure their projects are not only resistant to hail but also prevent that sort of pushback.
The following conversation has been lightly edited for clarity.
Hiya Brian. So why’d you get into the hail issue?
Obviously solar panels are made with glass that can allow the sunlight to come through. People have to remember that when you install a project, you’re financing it for 35 to 40 years. While the odds of you getting significant hail in California or Arizona are low, it happens a lot throughout the country. And if you think about some of these large projects, they may be in the middle of nowhere, but they are taking hundreds if not thousands of acres of land in some cases. So the chances of them encountering large hail over that lifespan is pretty significant.
We partnered with one of the country’s foremost experts on hail and developed a really interesting technology that can digest radar data and tell folks if they’re developing a project what the [likelihood] will be if there’s significant hail.
Solar panels can withstand one-inch hail – a golfball size – but once you get over two inches, that’s when hail starts breaking solar panels. So it’s important to understand, first and foremost, if you’re developing a project, you need to know the frequency of those events. Once you know that, you need to start thinking about how to design a system to mitigate that risk.
The government agencies that look over land use, how do they handle this particular issue? Are there regulations in place to deal with hail risk?
The regulatory aspects still to consider are about land use. There are authorities with jurisdiction at the federal, state, and local level. Usually, it starts with the local level and with a use permit – a conditional use permit. The developer goes in front of the township or the city or the county, whoever has jurisdiction of wherever the property is going to go. That’s where it gets political.
To answer your question about hail, I don’t know if any of the [authority having jurisdictions] really care about hail. There are folks out there that don’t like solar because it’s an eyesore. I respect that – I don’t agree with that, per se, but I understand and appreciate it. There’s folks with an agenda that just don’t want solar.
So okay, how can developers approach hail risk in a way that makes communities more comfortable?
The bad news is that solar panels use a lot of glass. They take up a lot of land. If you have hail dropping from the sky, that’s a risk.
The good news is that you can design a system to be resilient to that. Even in places like Texas, where you get large hail, preparing can mean the difference between a project that is destroyed and a project that isn’t. We did a case study about a project in the East Texas area called Fighting Jays that had catastrophic damage. We’re very familiar with the area, we work with a lot of clients, and we found three other projects within a five-mile radius that all had minimal damage. That simple decision [to be ready for when storms hit] can make the complete difference.
And more of the week’s big fights around renewable energy.
1. Long Island, New York – We saw the face of the resistance to the war on renewable energy in the Big Apple this week, as protestors rallied in support of offshore wind for a change.
2. Elsewhere on Long Island – The city of Glen Cove is on the verge of being the next New York City-area community with a battery storage ban, discussing this week whether to ban BESS for at least one year amid fire fears.
3. Garrett County, Maryland – Fight readers tell me they’d like to hear a piece of good news for once, so here’s this: A 300-megawatt solar project proposed by REV Solar in rural Maryland appears to be moving forward without a hitch.
4. Stark County, Ohio – The Ohio Public Siting Board rejected Samsung C&T’s Stark Solar project, citing “consistent opposition to the project from each of the local government entities and their impacted constituents.”
5. Ingham County, Michigan – GOP lawmakers in the Michigan State Capitol are advancing legislation to undo the state’s permitting primacy law, which allows developers to evade municipalities that deny projects on unreasonable grounds. It’s unlikely the legislation will become law.
6. Churchill County, Nevada – Commissioners have upheld the special use permit for the Redwood Materials battery storage project we told you about last week.
Long Islanders, meanwhile, are showing up in support of offshore wind, and more in this week’s edition of The Fight.
Local renewables restrictions are on the rise in the Hawkeye State – and it might have something to do with carbon pipelines.
Iowa’s known as a renewables growth area, producing more wind energy than any other state and offering ample acreage for utility-scale solar development. This has happened despite the fact that Iowa, like Ohio, is home to many large agricultural facilities – a trait that has often fomented conflict over specific projects. Iowa has defied this logic in part because the state was very early to renewables, enacting a state portfolio standard in 1983, signed into law by a Republican governor.
But something else is now on the rise: Counties are passing anti-renewables moratoria and ordinances restricting solar and wind energy development. We analyzed Heatmap Pro data on local laws and found a rise in local restrictions starting in 2021, leading to nearly 20 of the state’s 99 counties – about one fifth – having some form of restrictive ordinance on solar, wind or battery storage.
What is sparking this hostility? Some of it might be counties following the partisan trend, as renewable energy has struggled in hyper-conservative spots in the U.S. But it may also have to do with an outsized focus on land use rights and energy development that emerged from the conflict over carbon pipelines, which has intensified opposition to any usage of eminent domain for energy development.
The central node of this tension is the Summit Carbon Solutions CO2 pipeline. As we explained in a previous edition of The Fight, the carbon transportation network would cross five states, and has galvanized rural opposition against it. Last November, I predicted the Summit pipeline would have an easier time under Trump because of his circle’s support for oil and gas, as well as the placement of former North Dakota Governor Doug Burgum as interior secretary, as Burgum was a major Summit supporter.
Admittedly, this prediction has turned out to be incorrect – but it had nothing to do with Trump. Instead, Summit is now stalled because grassroots opposition to the pipeline quickly mobilized to pressure regulators in states the pipeline is proposed to traverse. They’re aiming to deny the company permits and lobbying state legislatures to pass bills banning the use of eminent domain for carbon pipelines. One of those states is South Dakota, where the governor last month signed an eminent domain ban for CO2 pipelines. On Thursday, South Dakota regulators denied key permits for the pipeline for the third time in a row.
Another place where the Summit opposition is working furiously: Iowa, where opposition to the CO2 pipeline network is so intense that it became an issue in the 2020 presidential primary. Regulators in the state have been more willing to greenlight permits for the project, but grassroots activists have pressured many counties into some form of opposition.
The same counties with CO2 pipeline moratoria have enacted bans or land use restrictions on developing various forms of renewables, too. Like Kossuth County, which passed a resolution decrying the use of eminent domain to construct the Summit pipeline – and then three months later enacted a moratorium on utility-scale solar.
I asked Jessica Manzour, a conservation program associate with Sierra Club fighting the Summit pipeline, about this phenomenon earlier this week. She told me that some counties are opposing CO2 pipelines and then suddenly tacking on or pivoting to renewables next. In other cases, counties with a burgeoning opposition to renewables take up the pipeline cause, too. In either case, this general frustration with energy companies developing large plots of land is kicking up dust in places that previously may have had a much lower opposition risk.
“We painted a roadmap with this Summit fight,” said Jess Manzour, a campaigner with Sierra Club involved in organizing opposition to the pipeline at the grassroots level, who said zealous anti-renewables activists and officials are in some cases lumping these items together under a broad umbrella. ”I don’t know if it’s the people pushing for these ordinances, rather than people taking advantage of the situation.”