- All Posts
- What Type of Projects Fit IRA Incentives?
What Type of Projects Fit IRA Incentives?
The Inflation Reduction Act (IRA) contains enhanced funding and tax incentives to accelerate infrastructure development in service to your core mission. Multiple technology types are called out within the new legislation, offering accelerated pathways to decarbonization and energy resiliency.
- Solar Photovoltaic (PV) Systems: Solar energy delivers on-site clean energy generation while stabilizing energy costs long term. A holistic, integrated set of services designed to meet budget and infrastructure goals results in maximization of financial savings and carbon reduction.
- Battery Energy Storage Systems: Battery energy storage systems provide energy certainty for critical operations as extreme weather events continue to intensify. Added with onsite renewable energy systems like solar PV delivers a comprehensive energy and facility operations strategy.
- Shared Energy EcoDistricts: Shared energy provides interactive solutions that unify the energy value chain and reimagine neighborhoods as places where energy use is optimized and systems are responsive and efficient. An EcoDistrict reforms the relationship with the utility provider to invest in the community’s infrastructure and future.
- Wastewater & Biogas Treatment: Transforming wastewater treatment plants to produce Renewable Natural Gas (RNG) creates clean, natural fuel, reduces tons of greenhouse gas from the environment and results in savings and revenue opportunities for municipal leaders. A healthy environment and a healthy economy go hand in hand.
- Fleet Electrification & Infrastructure: With a creative engineering and design approach, electric vehicles not only decarbonize transportation but also accelerate charging infrastructure while providing innovation opportunities with technology testing and workforce training, all while ensuring an organization’s carbon and cost reduction goals are met.
Each of these technology types are now supported through enhanced investment and production tax credits.
IRA Investment Tax Credit (ITC) Overview
Thirty percent federal tax credit claimed against the tax liability of commercial and utility (and residential) investors in solar energy property.
IRA Impact
- Extended and raised to 30 percent for projects started or will start construction before end of 2024
- Now available for standalone battery and thermal energy storage projects and microgrid systems
- Now available for interconnection costs for projects with a net output below 5 MWac
Other Must-Knows
- Direct pay is available to certain tax-exempt entities, state governments, rural cooperatives
- Building owners can choose only one tax credit
- Both come with “adder” options related to domestic content/materials use and for projects in energy communities, low-income properties and communities previously reliant on the fossil fuel industry
Production Tax Credit (PTC) Overview
Per kilowatt-hour (kWh) federal tax credit for electricity generated by qualified renewable energy resources.
IRA Impact
- Expanded to include solar projects
- Owners can choose PTC instead of ITC for greater financial benefit
- Now technology neutral for projects placed in service after 2024
Other Must-Knows
- Direct pay is available to certain tax-exempt entities, state governments, rural cooperatives
- Building owners can choose only one tax credit
- Both come with “adder” options related to domestic content/materials use and for projects in energy communities, low-income properties and communities previously reliant on the fossil fuel industry
Additional IRA Funding and Grant Opportunities
Greenhouse Gas Reduction Fund
- A competitive grant program, overseen by EPA
- For deployment of low- and zero-emissions technologies
- Funds available for:
- Nonprofit financing institutions
- 40 percent for low-income and disadvantaged communities
- Establishing state, local and nonprofit programs to install DERs in disadvantaged communities
- State, local and nonprofit organizations to install vehicle charging infrastructure
Climate Pollution Reduction Grants
- For states, municipalities and air pollution control agencies
- Funding for greenhouse gas pollution planning and implementation of decarbonization and electrification projects
- Technical assistance to help K-12 school districts address environmental issues
- Grants to reduce air pollution at ports through zero-emissions system adoption
Environmental and Climate Justice Block Grants
- For environmental justice projects that address environmental harms in low-income and disadvantaged communities
- Can be applied to pollution monitoring, zero-emission infrastructure, transportation emissions reduction, climate resiliency, pollution prevention and deployment of low- to -zero-emission energy technologies
Rural Renewable Energy & Electrification Project Financing
- Loans for renewable energy generation, zero-emission systems and related transmission
- Expands program availability to include energy storage systems
- Incentives for Buildout of Electric Vehicle Charging Networks
- Organizational leaders can pursue electricbus and electric vehicle fleet projects
Where to Start
The IRA represents a seismic shift that will accelerate the decarbonization of our built environment for the betterment of our communities. Now is the time to unite and harness our collective knowledge, innovative thinking and desire for change to guide bold action that will have real and lasting impact on your core mission.
Viridis can help accelerate infrastructure investments, reduce operating costs and reach ambitious decarbonization goals while making the most of every opportunity offered within the IRA.
