Illustration: Victoria Ellis/Axios
The Biden administration on Wednesday rolled out another round of Inflation Reduction Act guidance that could expand the reach of the law’s renewable and low-carbon energy incentives.
- The Treasury guidance clarifies the IRA’s elective pay and transferability provisions.
Why it matters: Nonprofits and local governments will be able to benefit from incentives for renewable projects, which have traditionally been available only to developers with large tax bills.
Driving the news: The IRA allows for some of its incentives to be converted into a direct cash payment for entities that do not have a federal tax bill.
- "That's a game changer for our ability to spread the benefits of clean energy to every community in America," John Podesta, White House senior adviser on clean energy, told reporters.
- The “transferability” provision, meanwhile, lets businesses without big tax bills sell their renewable credits.
- These policies — particularly direct pay — are a big deal for churches, tribes, schools and other not-for-profit institutions interested in projects like rooftop solar facilities or electric vehicle fleets.
- Administration officials said they plan an educational campaign for nonprofits and local governments to help them take advantage.
Of note: The guidance comes after Republicans on House Ways and Means on Tuesday advanced a bill to roll back some of the IRA’s energy tax credits.
- The legislation would repeal the investment and production tax credits, as well as the Superfund tax (E&E News has more on the markup).
- It’s a much narrower attack on the IRA than the initial debt ceiling bill Republicans passed in the full House in April.
- But it shows the GOP still has plenty of appetite to go after the law’s climate provisions, despite happy talk from the Biden administration and potentially massive benefits in red states.
