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The technology-neutral investment and production tax credits will save consumers money, the Treasury Department says.
The Biden administration rolled out the pièce de résistance of its Inflation Reduction Act tax credits on Tuesday, publishing the final rules for its overhaul of the clean energy subsidies at the heart of both the bill and United States alternative energy policy going back decades.
The final rules, which largely match proposed ones published in May, define what sources of energy are eligible for production and investment tax credits, known as 45Y and 48E — not, as before, by writing a list of qualifying energy technologies specified by Congress, but rather by lumping together all zero-emissions energy sources into one big group of winners and then letting developers choose which credit they want to use.
The tax credits cover “wind, solar, hydropower, marine and hydrokinetic, geothermal, nuclear,” according to a Treasury Department release, as well as “certain waste energy recovery property” (heat from buildings), and sets out a process for determining how combustion-dependent sources such as biogas, biomass, and natural gas derived from sources like cow manure could qualify. And unlike the tax credits they replaced, which had fixed time periods they were in effect, the tech neutral credits either begin phasing out in 2032 or when electricity sector greenhouse gas emissions are a quarter of their 2022 level, whichever comes second.
It’s not lost on anyone at Treasury or in the Biden administration that with Trump set to take office again in less than two weeks, these rules will be cast into doubt almost as soon as they’re rolled out. The administration is thus making an effort to cast the tax credits as a money-saving proposition for energy consumers — especially households — and a spur for investment across the country.
On Monday, the power market forecasting firm Aurora Energy Research released an analysis finding that scrapping certain IRA provisions, including the technology neutral credits, would “result in $336 billion less investment, 237 gigawatts less clean energy generation capacity, and at least 97,000 net fewer American jobs by 2040.” But what will likely catch the attention of policymakers is its conclusion that “consumers could see monthly household energy bills rise by an average of 10%, with states like Texas facing an increase of up to 22% compared to a scenario with continued tax credit support.”
Deputy Secretary of the Treasury Wally Adeyemo emphasized America’s energy competitiveness on a call with reporters Monday about the final rules. “The tech neutral ITC and PTC” — that is, investment tax credit and production tax credit — “will drive innovation by creating conditions for new zero-emission technologies to develop over time,” Adeyemo said. These policies together constitute an “energy moon shot,” he added, “because they reward innovation and innovative technologies developed in America to drive down energy costs while creating good paying jobs.”
Whether these arguments will convince to the Trump administration we will soon find out. While some Republicans have lined up in support of Inflation Reduction Act tax credits that have led to jobs in their districts, the incoming economic braintrust has taken a dim view of the bill, and Congress will be on the hunt for any spare dollar they can find to offset the costs of extending the 2017 Tax Cuts and Jobs Act. Trump’s incoming chair of the Council of Economic Advisors, Stephen Miran, has described the IRA, along with other Biden industrial policy initiatives like the Bipartisan Infrastructure Law and the CHIPS Act, as “tilting at windmills to boost politically favored sectors that can survive only with permanent subsidization.” Trump’s designee for the Secretary of Treasury, Scott Bessent, has said the IRA “will severely distort the supply side of the economy by crowding out investment in more productive sectors.”
While specific technologies have long been popular with specific Republicans — see “wind” and “Chuck Grassley” — lumping together the technologies along with a variety of bonuses designed to achieve Democratic policy goals around serving specific communities or workers could put the entire edifice of clean energy support at risk.
A few weeks ago, the Treasury released final rules governing the old tax credits, which were also updated under the IRA. Projects would qualify for 48E and 45Y for projects placed into service this year or later, while those that began construction before the end of the year could still qualify for the old credits. Many analysts think that even if the IRA were adjusted or repealed, an administrative process could be put in place to protect credits for projects that have already started.
In any case, in just 13 days, we’ll start getting answers, or at least putting the theories to the test.
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Fire will happen in California. It’s just a question of when and where.
Ask me one thing I love about living in Los Angeles and there’s a good chance I’d say, Because it’s wild. The giant city park near us is no flat, grassy plane for picnicking and Frisbee, but a rugged expanse of coyotes and the occasional mountain lion, God rest his soul. Outside my window loom the San Gabriel Mountains, loaded with hiking trails.
This is a place integrated with nature. People hike after brunch. But, as we must say at times like this, there is a cost to that.
The skies are dark today after two enormous wildfires sprang up overnight, sparked and fueled by ferocious Santa Anas. The winds, which blow hot air from the inland Great Basin toward the ocean, typically bring unseasonably warm days and fire danger in autumn. This January incident brought gusts as high as 100 miles per hour that rattled our windows and downed trees across town.
First came the fire in the Pacific Palisades, the area between the city’s ritzy western beach towns and the oft-burning hills of Malibu. The Palisades fire turned into a beast in a hurry as tens of thousands of people abandoned their homes and parts of Santa Monica went on high alert. Bulldozers bulldozed abandoned cars to make way for fire trucks.
Later in the evening, a second blaze began in Eaton Canyon, whose waterfall makes it one of the busiest hiking destinations in town. Eaton spread quickly in the dry mountains above Pasadena, forcing evacuations and alerts in the cities like Altadena and La Cañada Flintridge and creating a dark cloud of smoke over the San Gabriel Valley. At Caltech, where I work, the campus is wind-beaten and classes are canceled, as they are at plenty of area school districts.
L.A. woke up Wednesday morning to find itself between two fires. And those two enormous events, each of which has consumed thousands of acres by now, aren’t the end of it. Another major wildfire broke out north of the city near Santa Clarita. Smaller blazes have popped up all around town like a cruel game of Whack-a-Mole — in Pasadena, in Culver City, and close to here, by Dodger Stadium. Mercifully, most of these flare-ups were extinguished before they could spread.
In social media posts, residents are recommending to each other the excellent Watch Duty app that tracks fires as they develop. To have that on your phone this week is to be barraged by messages about new evacuation orders and new fires blazing up. With the whole region bone-dry and the gusts unrelenting, the city suddenly feels like a minefield. Any expanse of tree or scrub could be the next one to catch fire. As I watched out my window last night to see the mountain flames dance in the distance, a power line explosion in the foreground darkened part of a neighborhood across the river.
Such gloom was already a signature part of late summer and autumn in California, when the months of near-zero precipitation create a tinderbox in the hills and the mountains. Now, wildfires are seasonally unbounded. No significant rain has fallen in November or December. That, plus, an extremely hot and dry summer, led to the parched conditions that combined with freak winds to set the city ablaze during what used to be a wet month.
This is the way of things now. During the past two winters, El Niño conditions dropped heavy rainfall around Los Angeles that added snowpack to the mountains and eased drought conditions in the area. This winter we haven’t been so fortunate. In a climate-changed L.A. with less rain during its rainy season, the delicate balance of the city starts to tilt out of balance. It’s harder and harder to have neighborhoods in and up against the mountains, when wildfires seem to come so much more often.
These events inevitably trigger a wave of “How could you live in such a place?” Of course, you could ask the same thing of the tornadoes that sweep through where I’m originally from, or the hurricanes of the Gulf Coast. Every place has its disasters, and major wildfires are growing more common everywhere, not just in California. Retreat is an illusion.
What matters, here and elsewhere, is resilience. Not just the psychological kind that means we recover and come back, but the practical, logistical kind, like decentralized electrical grids that are less vulnerable to natural disasters and help people keep the lights on when the worst happens. We must build for the unexpected now that the freak cataclysm isn’t a freak event anymore.
Will this renewable energy powerhouse become the first state to ban renewable energy?
There’s a nascent, concerted effort to make Oklahoma the first state to ban new renewable energy projects. And it’s picking up steam.
Across the U.S., activism against wind and solar energy has only grown in intensity, power, and scope in tandem with the recent renewables boom. This is in direct contrast to hopes many in the climate movement had that these technologies would become more popular as they entered communities historically hostile to the idea of switching away from fossil fuels. If anything, grassroots angst toward the energy transition has only surged in many pockets of the country since passage of the nation’s first climate law – Inflation Reduction Act – in 2022.
Nowhere is this more true than Oklahoma, which on paper resembles a breadbasket of possibilities for the “green” economy. Oklahoma is the nation’s third largest generator of wind energy, home to a burgeoning solar energy sector, a potential hydrogen hub, and maybe even the nation’s first refinery for cobalt, a rare metal used in electric vehicles. Yet yesterday, hundreds of people flocked to Oklahoma City, filled a giant hall in the state’s capitol building to the brim, and rallied for the state’s governor Kevin Stitt to issue an executive order to stop new wind and solar energy facilities from being built.
“Welcome Oklahoma, for braving the cold out there into this very warm and receiving Capitol. And y’know what? Our warmth today was not brought to us by green energy,” Oklahoma Attorney General Gentner Drummond told the rally audience.
It’s exceedingly likely these folks won’t get an executive order any time soon. Oklahoma Republican governor, Kevin Stitt, has embraced these technologies as job creators. “Oklahoma is an oil and gas state through and through, but we also generate about 47% of our electricity from renewable sources,” he wrote on X in August. “I just don’t think the government should pick winners and losers or force us to choose between one or the other.” Weeks ago, he signed a memorandum of understanding between the state and the nation of Denmark to collaborate more on wind energy.
But the political gusts are blowing in the direction of a ban. Exhibit A: Drummond, who it’s rumored may run to replace Stitt and who at the rally pledged to work with legislators to pass a bill ending the deal with “quasi-socialist” Denmark. The rally also featured Oklahoma’s Education Secretary Ryan Walters, whose name has also been included in gubernatorial chatter.
This uprising in Oklahoma has been happening for quite some time, without much fanfare due to a persistent and pernicious news desert problem in the state (and many others). Like other states, it is becoming more commonplace for towns and counties there to face pressure to support moratoriums against developing new projects, and GOP lawmakers are also increasingly facing primaries over offering any support to wind or solar energy, or even just remaining neutral on whether projects get built. One such casualty in the last election cycle was Kevin Wallace, the GOP chair of the Appropriations and Budget Committee in the statehouse, who was dethroned by a political newcomer – Jim Shaw, who ran heavily on anti-renewables policies, including a statewide moratorium.
“It’s a groundswell,” said Pam Kingfisher, an environmental activist in northeast Oklahoma. Kingfisher is a Democrat but she has her own concerns with the environmental impacts that wind turbines could have in her community, the town of Kansas. So she’s grateful for this uprising.
“They’re attacking their own people and being very effective and I’m standing back going, ‘hey yes, take them on.’”
Suffice it to say, these activists feel emboldened by the primary wins and Trump’s election. Charity Linch, chair of the Oklahoma chapter of the Republican National Committee, told me she doesn’t believe the “pro-renewable Republican” will exist much longer in the state.
“I don’t believe that’s going to continue in Oklahoma,” Linch told me. “If they haven’t figured it out yet, they will very soon.”
Linch is the proud founder of Freedom Brigades, a grassroots network of activists with members in several states. The Freedom Brigade chapters for two counties conflicted over wind – McIntosh and Pittsburg – were instrumental in organizing the rally. Linch said Freedom Brigades also helped support some of the successful primary challengers in this past election cycle, and that her members were partially responsible for the Oklahoma GOP censuring Sen. James Lankford last year over a bipartisan border deal in Congress – causing the bill to die.
From talking to Linch, it’s clear to me that renewable developers should pay close attention to the Oklahoma uprising. So should Washington, because as talk in Congress proceeds toward changing the Inflation Reduction Act, rest assured some of these people will contact their members of Congress when the time comes. And you should expect the same from the myriad of anti-renewables activists in other states fighting solar and wind projects in their own backyards.
Getting Red In The Face
Why is this rebellion happening in Oklahoma? Well, if you ask Oklahomans, they’ll count the reasons.
Activists involved in planning the rally told me the biggest reason for the uproar was that solar and wind projects aren’t bringing the ample jobs developers and policymakers promise, making their presence in communities more difficult to stomach. Others point to environmental concerns, from the impacts these projects can have on species to the chemicals used to make them. Like Saundra Traywick, a donkey farmer who attended the rally and author of a Change.org petition supporting a state renewables ban that has more than 3,000 signatures. The petition claims wind turbines present “hazards to the health, safety, and welfare of the people.”
“They resort to calling us names instead of listening to us,” Traywick told me. “None of us wanted to get involved in any of this. We didn’t want to be involved in politics. These are farmers that are dealing with freezing temperatures,” referencing the temperature outside the rally.
There’s a serious issue of tribal opposition, given a 2020 Supreme Court ruling that found nearly half of all lands in Oklahoma fall under some form of tribal sovereignty. As Heatmap’s Matthew Zeitlin explained last year, this means developers may also need to get mineral rights approvals from tribal government bodies. Two weeks ago, a federal judge ordered the removal of 84 wind turbines on those grounds, stating the developer Enel Green Power failed to get adequate permission from the Osage Nation.
Some involved in this push for a renewables ban are also open about another rationale: They want to help oil and gas production, a key source of employment in the state.
“Why are we as a state being forced to fund our own demise essentially, with our federal taxpayer dollars, to prop up an industry that’s literally killing the backbone industry of our state, which is oil and gas?” Shaw said on Breitbart’s Conservative Review podcast in December.
To anyone who believes, as the vast majority of scientists say, that climate change is real and to avert catastrophe we must quickly build an energy grid that produces far fewer carbon emissions, these may all look like terrible reasons.
But if you don’t believe that climate change is real, or you believe it’s an overrated problem… renewables are just a much harder sell.
“Most of us do not believe we need to reduce our CO2 to begin with,” NeAnne Clinton, an activist fighting a large NextEra solar-plus-battery project in Garfield County, Oklahoma, told me. “We know that it’s a scam and we don’t support it. And we don’t support using our taxpayer money for something that we didn’t have a voice in.”
Cheyenne Branscum, chair of Sierra Club’s Oklahoma chapter, told me it is difficult for supporters of renewable energy to counter this insurgent populist movement against the sector. Part of the dilemma is that environmental activism itself is seen by many of the state’s most red-blooded Republicans as a “radical” act, so if climate advocates were to organize counter protests it would likely backfire. When asked how her organization and others could best deal with the anti-renewables sentiment rising in her state, she talked about education programs – not confrontation.
“We’re not going to change anything at the state capital,” Branscum told me. “All a counter rally is going to do is make them have more opportunities to make us into a meme. They’re going to have some angry picture out there with a sign and be labeled some crazy radical that doesn’t care about their community. And it is unfortunately a hurdle.”
The Sooners’ Warning Shot
The Oklahoma rebellion should be cold comfort for anyone who buys into one of the implicit political principles behind the country’s first climate law – the Inflation Reduction Act.
Whether folks in D.C. want to admit it or not, the American anti-renewables revolution is rising up as Donald Trump retakes the White House and it is going to try and make its own impact on the Inflation Reduction Act. While much ado has been made about how the overwhelming majority of monetary benefits from the IRA are supporting investments in Republican-controlled states, as veteran lobbyist Frank Maisano put it to me last year, “Businesses will support many things that they have their tentacles into and Republicans will support many things that are going on in their districts that constituents like.”
“The reality is, if you’re going to try to repeal it,” Maisano said, “you’re going to have to do it through Congress and a lot of the action in the energy transition is in Republican districts. It becomes a constituent issue.”
What if many Republican constituents simply don’t like these new investments, in spite of the promises of jobs or tax benefits? What happens if Republicans in Congress are primaried simply for allowing solar and wind to keep getting federal tax breaks?
None of this surprises Nathan Jensen, a Texas University professor specializing in resource politics, who believes Oklahoma will only be the first to face a movement for a state-wide ban on new renewables. Just look at Texas where, like Oklahoma, the energy sector has become a panacea for wind and solar energy but many GOP policymakers have turned on economic development packages for new renewables. A state-wide ban hasn’t been discussed yet, but Jensen can imagine the idea gaining traction.
Jensen said he believes the organizing on platforms like Facebook only tells part of the story. Clearly, he says, a lot of people are joining that cause because the industry’s grown large enough that people are hearing from the farm or town next to theirs about solar and wind projects. And whether climate advocates want to hear it or not, these people are not loving what they’re hearing. Solar and wind projects don’t create that many jobs after they’re built. They do create a flurry of construction, but that’s a form of labor that leaves when it’s done and is often resented by neighbors, leading to disputes over dust, noise, or water. Then there’s the tax abatements for developers, which aggrieved residents see as taxpayer dollars going to large companies without their say – precisely the message gaining traction in Oklahoma.
This means places that seem safe for renewable developers are no longer safe and companies need to be really careful about how they approach community benefits. It’s not something you can just say – you really need to deliver what you promise.
“I know there’s a lot of news about organized anti-solar, which clearly happens, but also there’s this organic opposition that happens where it’s like, ‘You’re asking for how much from our school district?’” Jensen said. “Some of it is organized Facebook groups against solar but I think there is a lot of frustration.”
The Palisades, Hurst, and Eaton fires now spreading across Los Angeles are yet another reminder that our rapidly changing climate now acts in unprecedented ways, with hurricane-force winds, longstanding drought, and a host of other factors contributing to blazes that have so far caused two deaths, the evacuation of thousands, and mounting property damage. The following images are at once shockingly new — it is, after all, January in Los Angeles — and numbingly familiar.
Smoke from the Palisades Fire billow over the Los Angeles skyline Tuesday.Eric Thayer/Getty Images
The Palisades Fire burns near homes amid a powerful windstorm.Mario Tama/Getty Images
An onlooker takes photos as the Palisades Fire burns.Mario Tama/Getty Images
Traffic backs up on Sunset Boulevard as people attempt to evacuate from the Palisades Fire Tuesday.Apu Gomes/Getty Images
Police officers help people evacuate along Sunset Boulevard.Apu Gomes/Getty Images
A firefighting aircraft drops a fire retardant on the Palisades Fire Tuesday.Mario Tama/Getty Images
Houses burn in the Pacific Palisades neighborhood Tuesday night.Eric Thayer/Getty Images
Roughly 50 miles to the northeast, the Eaton Fire burns in Sierra Madre.Mario Tama/Getty Images
Wind bends palm trees as the Eaton Fire moves through Altadena.Justin Sullivan/Getty Images
Flames attack the fireplace of a home in Pacific Palisades Tuesday night.Eric Thayer/Getty Images
Sparks fly from the wheel of a burned school bus as the Eaton Fire moves through Altadena on Wednesday morning.Justin Sullivan/Getty Images