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New Federal Climate Bill Renews Hope for MN Groups

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Tuesday, August 16, 2022   

President Joe Biden is expected to sign the Inflation Reduction Act today.

Its main theme is addressing the threat of climate change, and clean-energy advocates in Minnesota are cheering its passage. Late last week, Congress sent the roughly $400 billion package to the president's desk, with supporters saying it will drive down greenhouse-gas emissions 40% by 2030.

Michael Noble, executive director of the group Fresh Energy, said a key element is the ten-year extension of tax credits for wind and solar projects, as opposed to shorter renewals, which created less certainty.

"So, businesses can plan, utilities can plan, homeowners can plan," Noble outlined. "And make sure that they buy that new heat pump or buy that new electric car, or buy that new wind farm with the tax credit from the federal government."

He pointed out leaning more on renewables will help energy costs go down in the long run for customers. Researcher shows sources like wind and solar are now cheaper to produce than fossil fuels.

Right now, 52% of electricity in Minnesota is carbon-free. The bill was opposed by congressional Republicans, while analysts noted it leaves out some important components, including bigger investments in reducing farm emissions.

The Inflation Reduction Act also aims to help rural communities by encouraging electric cooperatives to invest in clean energy.

Erik Hatlestad, energy democracy program director for CURE Minnesota, said co-ops still largely rely on fossil fuels because they have not had equal access to federal incentives for renewables like investor-owned utilities have. Instead, they have often had to work with third parties.

"Now, they'll be directly paid to cooperatives," Hatlestad explained. "It's a real leveling of the playing field when it comes to clean-energy incentives."

He suggested it could also help with the nearly $100 billion in debt co-ops have incurred due to outdated infrastructure. Supporters of the plan argued it will also address inequities in fighting climate change. For the first time, there will be an expanded tax incentive for wind and solar projects built or connected to under-resourced or Native communities.

Disclosure: Fresh Energy contributes to our fund for reporting on Climate Change/Air Quality, Energy Policy, Environment, Environmental Justice. If you would like to help support news in the public interest, click here.


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