Inflation Reduction Act – The Chance of a Lifetime

Inflation Reduction Act – The Chance of a Lifetime

There was a time in my life when I believed I could personally make a difference as a writer and a cause marketer to improve the health of our planet. I felt that if I did my very best to communicate the truth about climate change, the compound benefits that persistent conservation could yield us and easy to follow guidance on sustainable lifestyle choices, we would all align around a mission to reverse the frightening effects that pollution, waste and neglect were having on our environment.

After years of preaching to the choir, I realized I wasn’t even close.

I needed to put my time and energy into something bigger. Way bigger. So, I went to work for a company that developed creative strategies for electric utilities looking to engage customers in energy efficiency programs. Since the programs were available to hundreds, even thousands of homes across multiple states, the impact was definitely greater. And I learned a lot about what motivates people to use less, how rebates alone don’t add up to environmental equity, and how compromise, annual budgets and changing leadership can kill the best of intentions before they ever get real traction.

It was clear to me that utility programs were only a piece of the puzzle. What we really need are big, meaningful, nationwide programs that stick around long enough to reduce carbon at scale, accelerate environmental justice, and create a new green collar workforce.

We weren’t going to get where we needed to go without true market transformation.

So, now I am filled with excitement, apprehension, and yes, a sense of responsibility (as anyone who has experience in this space should) that there is $370 billion in US federal funding for grants, incentives, and other strategies dedicated to addressing energy insecurity, economic growth and climate change over the next ten years.

Here’s why I’m excited:

The Congressional Budget Office (CBO) has estimated that the law will reduce budget deficits by $238 billion over the next decade.

Specifically stated, “The Inflation Reduction Act’s $370 billion in investments will lower energy costs for families and small businesses, accelerate private investment in clean energy solutions across every sector of the economy and in every corner of the country, strengthen supply chains for everything from critical minerals to efficient electric appliances, and create good-paying jobs and new economic opportunities for workers.”

DOE’s preliminary assessment finds that the Act and the Bipartisan Infrastructure Law, in combination with past actions, are projected to:

Research by the Rocky Mountain Institute finds that states could secure between $1,500 to $12,000 per capita per state and $1 billion to $130 billion per state cumulatively between now and 2030. States can use these funds to enact clean energy standards, weatherize homes, make EVs more affordable and expand EV infrastructure, train contractors, educate and promote incentives to residents, and more.

So, what’s the apprehension about, you might ask? Well, I don’t think I’m alone in this, but…

My concern is that we won’t take full advantage of this momentous opportunity.

My fear is that the complexity of the process will deter organizations and more importantly, people from taking action. Or that requirements for implementation and reporting will be next to impossible to achieve. Or that the money will go to the wrong place or there aren’t enough people to do all the work or that politics will keep it from going anywhere at all.

I know that there are guardrails in place. DOE is working closely with State Energy Offices and electric utilities to ensure dollars are spent wisely and impacts meet the energy and carbon reduction goals stated in the Act. If successful, IRA dollars will take the burden of cost out of transitioning to a clean energy economy. With funding available for end-to-end implementation, there is an added incentive for clean energy technologies that are developed in the United States. More jobs. More dollars funneling back into the economy. More reason to do this right.

The model is good. So good that according to Green Biz, there was quite a kerfuffle among EU leaders early this year at the World Economic Forum in Davos, Switzerland. They complained that Biden’s bill unfairly excludes EU manufactured products from being eligible for IRA funds. The interesting result of all this agita is that the EU is now working on its own clean energy policy through The Green Deal Industrial Plan, focused on scaling up renewable energy sources and clean energy technologies, and the Critical Raw Materials Act, ensuring the EU is ready for the increase and diversity in critical raw materials necessary to transition to a clean energy future.

And this is where my sense of responsibility kicks in. State Energy Offices, City Governments, electric utilities, local agencies, energy service providers, contractors, homeowners, renters – there is something every one of us can do:

Make every nickel count.

The message needs to be clear. The path needs to be laid out as intuitively as possible. The process needs to be simple enough and accessible enough for the people who really need help to actually benefit from all this money and good intention.

The Science is there. And DOE is asking for input from States and stakeholders as they design the programs. But we need to keep bringing it back to making it simpler, to be people focused. If we can do this, the model will be great.

With the whole world watching, I am more hopeful than ever that we will meet this extraordinary opportunity head on. And that my younger self will have more than just high ideals to celebrate.

By Julie Hayes, Director of Utility Solutions at Energy Datametrics