Three Exciting, New Federal Programs Announced for Energy Communities

Yesterday, the U.S. Department of Energy (DOE), U.S. Department of Treasury, and the Internal Revenue Service (IRS) announced three new opportunities available through the historic Bipartisan Infrastructure Law and Inflation Reduction Act that benefit energy communities.

First, DOE’s Advanced Energy Manufacturing and Recycling Grant Program (40209), led by the Office of Manufacturing and Energy Supply Chains, is investing $750 million to accelerate clean energy manufacturing in the U.S. in energy communities. Through the launch of an initial $350 million announced yesterday, the program supports small- and medium-sized manufacturing firms with projects that produce or recycle advanced energy property needed for secure, resilient, domestic clean energy supply chains in communities with historic ties to coal mining or power generation.

Click here to register for the upcoming 40209 webinars.

Second, the Qualifying Advanced Energy Project Credit (48C) program provides up to $10 billion in tax credits to qualifying investments in clean energy technology manufacturing and recycling; industrial greenhouse gas emissions reductions; or critical minerals processing, refining, and recycling. Under the Inflation Reduction Act, at least $4 billion of that amount is set aside for projects in communities with closed coal mines or retired coal-fired power plants. Qualifying projects can receive an investment tax credit of up to 30 percent.

Yesterday, Treasury, IRS, and DOE, announced their intent to release approximately $4 billion in a first round of tax credits for projects with an application process for this new round of funding opening on May 31. Approximately $1.6 billion of this allocation will be set aside for projects in coal communities. DOE, which has long played a key role in working to implement this program since its initial establishment in 2009, will administer this credit in partnership with Treasury and IRS.

Finally, the Low-Income Communities Bonus Credit program (48(e)) provides up to a 20 percentage point boost to the investment tax credit for small-scale (less than five megawatts) solar and wind energy projects in Low-Income communities, in Indian Land, that are part federally subsidized residential buildings, or in which at least 50 percent of the financial benefits of the electricity go to low-income households. This groundbreaking program, which was created by the Inflation Reduction Act, will allocate bonus credits to 1.8 gigawatts of eligible capacity per year.

Program goals include increasing the adoption of and access to renewable energy facilities in low-income communities and communities with environmental justice concerns; encouraging new market participants, such as community-based organizations and mission driven entities; and providing substantial benefits to communities and individuals who have been historically marginalized from economic opportunities and overburdened by environmental impacts. The Department of Energy, which will be working with Treasury and the IRS to implement the program, anticipates starting to accept applications in the second half of 2023.

These historic investments, and others from the Bipartisan Infrastructure Law and Inflation Reduction Act, present a multitude of opportunities to revitalize energy communities, diversify workforces, and support energy workers.

Established by an Executive Order during President Biden’s first week in office, the IWG is pursuing a whole-of-government approach to create good-paying union jobs, spur economic revitalization, remediate environmental degradation and support energy workers in coal, oil and gas, and power plant communities across the country. The IWG supports the Administration’s goals of a carbon emission-free electricity sector by 2035 and economy-wide net-zero emissions by 2050.