If, like the team at IREC, you’re passionate about tackling the impacts of climate change and building a more sustainable and just future powered by clean energy, chances are you’re still basking in the glow of the passage of the Inflation Reduction Act—the most ambitious climate legislation in U.S. history. 

Signed into law by President Biden on August 16, 2022, the Inflation Reduction Act (IRA) is, as the New York Times detailed, the “largest climate investment ever made by Congress, amounting to roughly $390 billion over 10 years.” $369 billion of that is allocated to programs that support the transition to clean energy sources (including energy efficiency and energy storage) and electric vehicles and other decarbonization technologies. 

Analysis by the Princeton University-led REPEAT Project on the likely climate impacts estimated that the IRA could cut U.S. emissions to 40% below 2005 levels by 2030, getting us two thirds of the way to the nation’s current 2030 goal and eliminating an additional billion metric tons of CO2-equivalent compared to existing policies. “And by driving down the cost of clean energy,” says Jesse Jenkins, Princeton energy systems engineer who helped lead the modeling effort, “it can make it easier for states or cities or companies to take further climate actions on their own.”

Many other organizations have already done an excellent job summarizing the details of the provisions in this expansive law, so we don’t aim to recreate the wheel with this article. Rather, we’re looking ahead at the road to a 100% clean energy economy that this bill paves, and exploring the complementary actions that will be needed to make the most of this historic moment. 

We know that the Inflation Reduction Act will massively increase the amount of renewable energy being installed in the United States, yet there remain a number of different barriers that—if not addressed—stand to significantly slow or complicate the process. IREC focuses on building the foundation for the rapid adoption of clean energy and energy efficiency, so our focus every day is on identifying the regulatory, workforce, and local barriers that stand in the way of a 100% clean energy future, and working strategically to break them down. Read on for our take on some of the barriers that will be critical to address.

What’s in the Inflation Reduction Act?

While we won’t devote this article to the details of the IRA, it’s helpful to know a few key highlights to understand its impacts.  A few of the notable elements of the IRA are that it:
  • ★ Restores clean energy tax credits and provides certainty on them for the next 10 years (through 2032).

  • ★ It restores the Investment Tax Credit and Production Tax Credit to their original 30% level for the next two years, before creating a technology-neutral tax credit starting in 2025, with requirements for paying prevailing wages and using apprenticed labor.

  • ★ It also establishes a standalone tax credit for energy storage, which has historically had to be paired with solar to qualify. 

  • ★ Provides significant funding for the U.S. Department of Energy to make loans, including for infrastructure upgrades on the electricity grid, which will be important in accommodating an influx of additional renewable energy generation. 

  • ★ Provides a number of different sources of funding for local communities to support this transition, increase resilience to the impacts of climate change, and address historic environmental injustices.
To get more into the details, here are a few articles you may find helpful: 
(This is not intended to be a comprehensive list, just a few resources we found helpful.)  

Building the Clean Energy Workforce We Need

The Inflation Reduction Act includes a number of great wins for workers, measures that will ensure clean energy jobs continue to be quality, family-sustaining careers. But many, many more workers will be needed to support the kind of industry growth that the IRA puts us on a path toward. To put in context the kind of growth we are talking about, new analysis from the BlueGreen Alliance estimates that 5 million clean energy jobs will be created over the next decade!

Already 89% of solar employers and 80-91% of energy efficiency employers (depending on sector) report that it is somewhat or very difficult to fill their open positions. Without a sufficient supply of workers, it will take significantly longer to develop the clean energy and energy efficiency projects that this legislation enables.

Creating Inclusive Pathways to Clean Energy and Energy Efficiency Employment

Simply filling these jobs is not enough. It is critical to ensure these jobs are accessible to all. We know that clean energy industries remain predominantly white and male, not reflecting the diversity of the broader U.S. population. Ensuring that people of all backgrounds and walks of life have inclusive pathways to these quality jobs is an essential part of making the most of this momentous milestone in our nation’s history, and bringing its benefits to all Americans.

To help ensure we have the workers we need and that these job opportunities are inclusive for all, the National Clean Energy Workforce Alliance—led by IREC and the National Council on Workforce Education, NCWE—has been convening the many different types of organizations involved in clean energy workforce development to align on common challenges and the best solutions. To date, nearly 500 organizations from across the nation have participated, ranging from employers to training providers to community-based organizations to policy makers. 

The first year of the Alliance’s work, supported by Bank of America, will culminate this year in IREC’s annual Vision Summit on October 19, a one-day in-person and virtual conference, followed by the publication of a preliminary report on the Alliance’s findings. (Interested in getting involved? Join the program’s mailing list here.)

In a related effort, over the next three years, under a grant from the U.S. Department of Energy, IREC will be playing an active role in helping the Weatherization Assistance Program (WAP)—the nation’s largest whole-home energy efficiency program—recruit more workers, with a focus on increasing awareness of and access to these roles among underserved and energy-burdened communities. WAP retrofits homes of over 35,000 income-eligible households every year at no cost to residents, providing critical savings on energy costs and improving health outcomes.

Expanding Clean Energy Apprenticeships

The IRA instituted new labor requirements that companies must meet to receive the full value of federal incentives. Primarily affecting larger renewable energy and energy storage projects (> 1MW), commercial energy efficiency projects, and the construction and operation of a wide variety of manufacturing and fuel production facilities (including electric vehicle charging), employers will need to pay at least prevailing wages and have a minimum percentage of certain personnel performing construction, alteration, and repair work be apprentices in a Registered Apprenticeship Program (RAP). Projects that do not meet these new requirements, which will go into effect 60 days after the Secretary publishes related regulations, will only be eligible for 20% of the full value of the relevant tax credits or deductions. 

Helping employers navigate the U.S. apprenticeship system and implement RAPs to train workers is another key area where IREC is providing leadership. As detailed in an article for Solar Power World earlier this year, there are currently few existing options for solar apprenticeships. Through the Solar Ready Veterans Network™, which helps veterans access the benefits of solar careers, IREC and SEIA have been working to advance the use of RAPs across the solar industry. (RAPs are one of the best workforce development tools for attracting veterans, as veterans enrolled in a RAP are eligible for housing allowances through GI Bill.) Solar employers are invited to complete a brief survey to help us better understand industry perspectives and challenges related to registered apprenticeship programs. 

IREC is also a key partner on a recently announced Department of Labor award for a new National Apprenticeship Hub focused on providing support to the clean energy and energy efficiency industries. Stay tuned for more information coming soon on how to access free technical support for understanding the options for RAPs to train the workforce that will be needed to meet the growth that is expected from the IRA and other recently approved legislation. 

Training Workers Who Interact With Clean Energy

IREC is also directly working to increase clean energy knowledge and awareness among workers who are beginning to interact with these technologies more and more—such as building, fire, and safety officials. Under a 3 year program, IREC and its partners are expanding the knowledge of 30,000 code and safety professionals through one of the most widely-accessed clean energy clearinghouse websites, which houses expert information on clean energy codes, standards, permitting, and inspection. By increasing the familiarity and confidence of these key stakeholders to permit and inspect DERs, the project is reducing barriers to widespread clean energy deployment. Building operators and owners also need clean energy skills to adopt and operate clean energy technology. IREC continues our work in this arena with a program funded by NYSERDA to bring building controls and electrification training to the higher education setting through a partnership with the State University of New York.

Improving Interconnection Rules

To get clean energy projects connected to the grid, the local utility must approve the project’s interconnection application. Unfortunately, outdated and inefficient interconnection policies have consistently proven a barrier to the rapid installation of clean energy. IREC is the nation’s leading nonprofit expert on interconnection policies for clean energy and has helped shape the interconnection policies in over 40 states. 

The significant increase in clean energy projects being developed as a result of the IRA will make effective interconnection policies even more critical. It is well documented that when policies that accelerate distributed clean energy growth take effect without effective interconnection policies in place for clean energy projects, significant backlogs can occur.

For example, after a new community solar program took off in Minnesota, interconnection delays in one utility territory were so bad that an analysis by the Minnesota Solar Energy Industries Association estimated it would take 260 years to clear the backlog at the utility’s current pace of review! It will be critical for states to proactively examine their interconnection policies to avoid similar bottlenecks in development. 

Relatedly, new tax credits for storage will increase storage installations. This is fantastic news because the unique characteristics of storage—namely that it can release energy on command, not just when the sun is shining or the wind is blowing—provide essential flexibility to enable a grid powered predominantly by renewables. Unfortunately, energy storage faces unique interconnection challenges in states that have not updated their interconnection rules to tailor them to this technology. 

IREC and a team of industry-leading partners have been working to give states and utilities the tools they need to reduce the costs and time to safely interconnect energy storage and solar-plus-storage systems. The Toolkit and Guidance for the Interconnection of Energy Storage and Solar-Plus-Storage provides vetted, consensus-based solutions to eight regulatory and technical barriers to the interconnection of energy storage and solar-plus-storage systems to the distribution grid. IREC and partners are also engaging in extensive training efforts to familiarize regulators and utilities with these solutions. (Sign up for our next training, an introduction to energy storage-related interconnection standards, on September 13th.) 

Efficient interconnection policies that are appropriately tailored to clean energy technologies, including storage, will be fundamental in unlocking the potential of this landmark climate act.

Resources to Help Communities Lead the Way on Clean Energy 

Clean energy development happens at the local level—and the Inflation Reduction Act recognizes this, with several measures aimed at providing funding to communities for development of clean energy and clean transportation. It also provides funding to address environmental and energy injustices, including grants to reduce pollution and increase climate resilience. 

As we enter this phase of rapid clean energy growth, communities will need support to avoid unnecessary barriers to clean energy installation and to manage related considerations, such as equity and land use. IREC’s local initiatives program focuses on giving local communities the tools they need to improve clean energy outcomes in their backyards, from helping cities, towns, and counties become “open for solar business” to improving the codes and standards that affect how clean energy systems are installed, inspected and permitted. 

By progressing through the achievements necessary to achieve, bronze, silver, or gold designation under the SolSmart program—led by IREC and the International City/County Management Association (ICMA)—over 450 communities across the country have made it easier for their residents and businesses to install solar. Independent research found that SolSmart designation is associated with the installation of 18-19% more solar capacity per month. The SolSmart team also provides valuable technical assistance to support communities in this work. 

As more communities around the nation start to see high levels of solar and other renewable energy growth, programs like SolSmart can help them navigate these changes and make their local regulations and practices more supportive, and ensure equitable access to solar in their areas. SolSmart can also help communities consider how solar fits into their local context, such as this report to help rural communities in Southwest Virginia make decisions about large-scale solar development. (The IRA earmarks funds for programs like the U.S. Department of Agriculture’s Rural Energy for America Program that supports the generation, storage, and use of renewable energy in rural communities.)

Another IREC-led program, the Sustainable Energy Action Committee (SEAC), brings together diverse stakeholders to identify challenges that are slowing clean energy installation. This includes instances where gaps or lack of clarity in codes, standards, and other policies result in confusion in the permitting and/or installation of clean energy systems. By bringing together stakeholders with different needs to come to consensus on recommendations, SEAC is playing a unique role in improving the landscape for DER installations. 

To date, this consensus-based effort has made dozens of recommendations to improve key codes such as the International Building Code, the International Electrical Code, and the International Residential Code. So far, 16 of these recommendations have been accepted and are resulting in tangible code improvements and several more are pending consideration. 

IREC’s Local Initiatives program is also active in Puerto Rico, which has faced devastating impacts from hurricanes that are becoming increasingly common due to climate change. IREC’s Puerto Rico Solar Business Accelerator is helping the island’s nascent solar industry take off—through financing innovations, workforce development, technical assistance, and direct support to communities to develop microgrids that give them the energy independence they so desperately need. 

Similar efforts to ensure local communities have the resources they need to effectively support this clean energy growth, and avoid unnecessary bottlenecks, will be essential to making the most of the IRA.

The Inflation Reduction Act is the most aggressive climate law in American history and a hugely important step in our efforts to confront climate change and bring about a cleaner, more equitable future in which clean energy and energy efficiency meet our energy needs. But to achieve its full potential we will need to actively break down the regulatory, workforce, and local barriers that stand in the way of rapid clean energy deployment. This is IREC’s focus and we invite you to join us on this critical journey.