Presbyterians for Earth Care webinar explains underpublicized aspects of the Inflation Reduction Act
by Mike Ferguson | Presbyterian News Service
LOUISVILLE — It may be known as the Inflation Reduction Act, legislation signed this month by President Joe Biden aimed to lower prescription drug, health care and energy costs and adjust the tax code in an economy experiencing high inflation.
But the landmark legislation also “is going to dramatically change things, and we hope very quickly,” said the Rev. Bruce Gillette, moderator of Presbyterians for Earth Care during a webinar held last week. View the webinar by going here.
The U.S. Senate passed the IRA following quiet negotiations chiefly between Senate Majority Leader Chuck Schumer, D-New York, and Senator Joe Manchin, D-West Virginia. “One thing I find fascinating about this moment,” said Madison Mayhew, congregational organizer and federal policy advocate for Interfaith Power & Light, “is the group of people involved in these negotiations was so small that 90% of us were caught completely off-guard by this announcement,” she said. “We all thought the moment had passed.”
The “biggest takeaway” from the new legislation, according to Mayhew, is its “significant funding for clean energy that will help us transition off of fossil fuels in tangible and significant ways. It’s paid for by taxes on the largest corporations, many of whom don’t pay taxes now.”
The IRA includes energy tax credits for wind and solar energy and for the purchase of electric vehicles, upgrades for heat pumps, “and so much more,” she said, including $60 billion for environmental justice priorities, up to $60 billion for domestic clean energy manufacturing, $27 billion for the establishment of a green bank to provide loans for zero-emission technologies and the first direct federal methane fee.
“As people of faith gathered here tonight in recognition of our love to care for our common home, there’s certainly a lot in the bill worth celebrating,” Mayhew said. Some computer models show one effect of the legislation will be that the U.S. cuts its emissions 40% from 2005 levels. Families can expect to save $1,000 annually through lowered energy costs and efficiency, Mayhew said.
That said, “as people of faith we are deeply committed to pursuing justice and protecting marginalized and historically disenfranchised communities,” Mayhew said. “There are provisions in this bill that are troubling and concerning, mainly around extending lease opportunities for oil and gas [companies operating] in in the Gulf” and other places.
“There will be opportunities for engaging on that and making sure that it is stopped,” she said.
Dale Davis, the president of CMI Solar & Electric in Newark, Delaware, walked the more than 50 webinar attendees through some of the tax credits the legislation provides. Homeowners will see the 30% tax credit for the purchase of solar panels restored in its entirety, Davis said. It’s been declining in recent years.
A new provision for nonprofits gives them a tax credit as well, even though they pay no taxes. Those credits are transportable: a third party can foot the bill for a church’s solar installation, for example, then claim the 30% federal tax credit, Davis said.
The commercial tax credit is also 30%, with the option for companies to choose instead to be paid for each kilowatt hour produced over a period of years. The IRA also provides for an additional 20% tax credit for projects completed in low-income areas, an aspect that Davis applauded.
“We have had environmental justice issues where low-income communities have not been well served by solar,” he said. “I think we’ll start to see a lot more solar in those communities.”
In addition, there’s a 10% credit for solar projects in what are called “energy communities” — brownfields or areas with high employment in extraction industries like coal and gas, or where plants have been closed. “Most of us,” Davis said, “live within range of a coal-fired plant.”
“I think there’s going to be a radical increase in solar,” Davis predicted.
The other piece of the legislation he highlighted is home batteries, which can now be charged on the grid because the requirement to charge them via energy produced by solar panels has been removed. Those home batteries can thus be charged when demand is low and fed back when power costs are high, such as the evening hours, Davis said. “I think we’ll see a big rush toward batteries,” he said.
Mark Eakin, a member of PEC’s steering committee who’s purchased two electric vehicles to date, had a two-word analysis for what the new law has to say about electric vehicles: “It’s complicated.”
“It’s going to depend on which EV you’re interested in,” Eakin said. “If you plan to buy an EV this year, you’re probably OK” to qualify for the tax credit, which is $4,000 for a used EV. But in order to qualify for the credit, the vehicle must be assembled in North America, and person-to-person sales don’t qualify. “It has to go through a dealership,” Eakin explained.
Presbyterians for Earth Care will hold an online service at 7:30 p.m. Eastern Time on Thursday as part of the World Day of Payer for the Care of Creation. The Rev. Susan Gilbert Zencka, PEC’s treasurer, will lead the online service. Learn more and find the Zoom link here.
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Tags: cmi solar & electric, dale davis, electric vehicles, inflation reduction act of 2022, interfaith power & light, madison mayhew, mark eakin, Presbyterians for Earth Care, Rev. Susan Gilbert Zencka, solar energy, world day of prayer for the care of creation
Tags: clean energy, dale davis, earth care, electric vehicles, energy costs, environmental justice, home batteries, inflation reduction, inflation reduction act, madison mayhew, mark eakin, people of faith, presbyterians for earth, presbyterians for earth care, reduction act, solar, solar panels, tax, tax credit, tax credits
Ministries: Environmental Issues