The answer to this question is YES. The Inflation Reduction Act of 2022 provides significant incentives for businesses to focus on clean energy. The energy tax incentives represent $270 billion of the total $329 billion dedicated to combat climate change.
The programs included in the Inflation Reduction Act that may be the most interesting to businesses include:
Clean fuel credits, extended through 2024.
Retroactive reinstatement of expired credits.
Alternative fuel credits.
Alternative fuel mixture credits.
Sustainable aviation fuel credit.
Clean hydrogen production credit.
Investment tax credits for projects with construction beginning by the end of 2024.
This includes energy storage facilities.
Production tax credits.
Manufacturers’ tax credit for construction, re-equipping or expanding a manufacturing facility to produce renewable energy.
Advanced manufacturing credit for solar.
Alternative fuel refueling property credit.
For some of these credits, it is as simple as completing IRS credit forms and waiting for the cash to arrive. For others, the process is more complicated. Businesses who want to take advantage of the opportunities for credits should consult with their accounting firm, and experts that those firms have both in the tax and accounting matters for the specific business and related to the new credit opportunities.
Every business should be assessing its ability to take advantage of these programs, especially related to fuel use and any facility expansion plans.
In addition to the Inflation Reduction Act programs, there are several ways a business could take advantage of infrastructure programs under the Infrastructure Investment and Jobs Act to help create a green energy company or to increase an existing company’s reliance on green energy:
Access to funding: Many infrastructure programs provide funding for clean energy projects, including loans, grants, and tax incentives. For example, the US federal government offers tax credits for renewable energy production through the Renewable Energy Production Tax Credit (PTC) and the Investment Tax Credit (ITC).
Networking and partnerships: Participating in infrastructure programs can provide opportunities to network with industry leaders, potential partners, and customers, helping build relationships and gain exposure for your company and its green energy focus.
Technical support and expertise: Many infrastructure programs offer technical support and expertise to help clean energy companies navigate the complexities of developing, building, and operating renewable energy projects.
Access to markets: Infrastructure programs can help green energy companies access new markets and customers. For example, renewable energy certificate (REC) programs allow companies to sell the environmental benefits of their renewable energy production to customers who want to offset their carbon footprint.
Regulation and policy support: Infrastructure programs can provide support and guidance to help companies navigate the regulatory and policy landscape for renewable energy, ensuring that projects are in compliance with relevant laws and regulations.
What are some more ways for businesses in the US to take advantage of possible benefits?
Federal grants and loans: The US Department of Energy offers several loan programs, including the Title 17 Innovative Energy Loan Guarantee Program and the Advanced Research Projects Agency-Energy (ARPA-E) program, that provide funding for clean energy projects. The DOE also offers grants through its Office of Energy Efficiency and Renewable Energy (EERE) to support the development of clean energy technologies.
State-level incentives: Many US states have their own incentives and programs to support the development of renewable energy, such as tax credits, rebates, and grants. For example, the California Solar Initiative provides incentives for residential and commercial solar installations in the state.
Renewable Energy Certificates (RECs): RECs allow companies to earn credits for producing renewable energy, which can then be sold to organizations and individuals looking to offset their carbon footprint. By participating in a REC program, green energy companies can generate additional revenue from their renewable energy production.
Net metering: Net metering programs allow renewable energy systems, such as solar panels, to feed excess energy back into the grid, earning credits on their utility bills. This can help green energy companies offset the costs of their energy production.
Corporate Renewable Energy Procurement: Many corporations in the US have set renewable energy procurement targets, creating demand for clean energy. Green energy companies can take advantage of this demand by offering their products and services to these corporations.
These are just a few examples of the many infrastructure programs and initiatives available to support the development of green energy companies in the US. It is important to research and understand the specific programs available in each state and region to determine which ones are most applicable to your business.
Overall, there is a tremendous amount of money available to businesses through the Infrastructure Investment and Jobs Act and the Inflation Reduction Act. If a business is considering any type of expansion, consideration should be given to these programs. High energy use businesses may want to consider a green energy program.