Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Economy

Biden’s Climate Cash Is Finally Pouring In

To the tune of $37 billion in the past month alone.

President Biden and clean energy.
Heatmap Illustration/Getty Images

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.

Blue

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Q&A

You, Too, Can Protect Solar Panels Against Hail

A conversation with VDE Americas CEO Brian Grenko.

This week's interview subject.
Heatmap Illustration

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.

Keep reading...Show less
Yellow
Hotspots

The Pro-Renewables Crowd Gets Riled Up

And more of the week’s big fights around renewable energy.

The United States.
Heatmap Illustration/Getty Images

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.

  • Activists came together on Earth Day to protest the Trump administration’s decision to issue a stop work order on Equinor’s Empire Wind project. It’s the most notable rally for offshore wind I’ve seen since September, when wind advocates protested offshore opponents at the Preservation Society of Newport County, Rhode Island.
  • Esther Rosario, executive director of Climate Jobs New York, told me the rally was intended to focus on the jobs that will be impacted by halting construction and that about a hundred people were at the rally – “a good half of them” union members or representing their unions.
  • “I think it’s important that the elected officials that are in both the area and at the federal level understand the humans behind what it means to issue a stop-work order,” she said.

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.

Keep reading...Show less
Yellow
Spotlight

How a Carbon Pipeline Is Turning Iowa Against Wind

Long Islanders, meanwhile, are showing up in support of offshore wind, and more in this week’s edition of The Fight.

Iowa.
Heatmap Illustration/Getty Images, Library of Congress

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.

Keep reading...Show less
Yellow