Climate and Clean Energy Investments Edge Closer to Passage

President Biden and Congressional Democrats have come to an agreement on the framework for their budget reconciliation legislation. The legislation that is being drafted in the U.S. House of Representatives, H.R. 5376 (“The Build Back Better Act”), includes $550 billion in needed investments in clean energy, next-gen energy storage, zero emissions vehicles, and energy efficiency. These robust climate investments present a once-in-a-generation opportunity to address the climate challenge in a meaningful way.   

Summary of Climate and Clean Energy Provisions in the Framework 

• $320 billion in Clean Energy Tax Credits: There are a range of tax credits for renewable energy, energy storage, electric vehicle purchases, energy efficiency and electrification for our buildings, transmission, and zero-emissions industrial processes. Importantly, the legislation would make many of the tax credits available as direct pay or as fully refundable credits, making them much more accessible to residents and businesses. Notable credits include:  
  • Extending the existing federal renewable energy investment and production tax credits for 10-years and making those tax credits direct pay. 
  • Refundable tax credits of up to $7,500 and $12,500 for electric vehicles well as a tax credit for electric bicycles. 
  • A new stand-alone tax credit for energy storage systems. 
    

• $29 Billion in Seed Funding for State and Local Clean Energy Finance Institutions: The $29 billion for a “Greenhouse Gas Reduction Fund” would provide public seed capital for non-profit financial institutions that provide low-cost loans to clean energy, emissions reduction, and climate resiliency projects. Utah is in a position to benefit from this market-based tool to scale up innovative energy and zero-emission projects. 
  

• $12 Billion for Zero-Emissions Buildings: The $12 billion in customer rebates are for super-efficient electric appliances and whole-home energy efficiency retrofits, including $2 billion for energy efficiency and electrification in the affordable housing sector. 
  

• $11 Billion for Zero-Emissions Heavy-Duty Vehicles and Manufacturing Support: There is $5 billion available to replace high-emissions heavy-duty vehicles and another $6.5 billion to promote the manufacturing of zero-emission vehicles. 
  

• Investments in Upgrading the Electricity System: A central piece of the reconciliation legislation is $2.8 billion for expanding the transmission system, a key to unlocking renewable energy in the U.S, with $2 billion going to high-capacity transmission lines and $800 million focused on siting of key transmission projects. It also seeks to speed up permitting of clean energy and transmission projects. 

Other key provisions include: 

• New funding for reducing emissions and promoting zero-emissions electricity resources for rural electric cooperatives. 
• $4 billion for the Department of Energy’s “Industrial Facilities Deployment Program” to help improve energy efficiency and reduce emissions from industrial processes. 
• A major investment in energy efficiency and climate programs for tribal communities. 
• A penalty on methane waste, along with a program to assist oil and gas companies to reduce methane leaks. 

• Over $20 billion for climate and conservation-related agriculture programs. 

We will update as the House and Senate work through the legislative drafting process and we will provide more details as we see them.