Statement on U.S. Department of the Treasury Guidance on the Inflation Reduction Act's Low-Income Communities Bonus Credit Program Regarding Solar Tax Credits
Statement by Michelle Moore, CEO, Groundswell
Washington, DC – February 14, 2023 – “The Inflation Reduction Act’s bonus credits – together with its provisions for a ‘direct pay’ option that will enable nonprofits such as churches, nonprofit housing organizations, and other community-based nonprofits to fully participate in solar project ownership – are potential game-changers for building a just and equitable clean energy economy.
“I want to commend the U.S. Department of the Treasury team for the thoughtful, planful, and collaborative initial guidance released yesterday on the Low-Income Communities Bonus Credits which will maintain the alignment of this policy’s implementation with its intent.
“First, the guidance prioritizes people by allocating the largest blocks of eligible solar capacity to renewable energy projects in low-income communities, on affordable housing, and to community solar projects serving low-income households. That means these bonus credits will get translated directly into greater access to bigger energy savings for people in communities with the highest energy burdens.
“Second, the guidance incorporates a continuous improvement process that will enable the Treasury Department, in concert with stakeholders, to lead with learning. The bonus credits are among the many policy innovations in the Inflation Reduction Act that will deliver the benefits of clean energy to everyday people, and it’s great to see a phased implementation process that will enable continuous improvement.
“Third and finally, the guidance explicitly addresses its purpose in support of LMI communities and environmental justice. This purposeful intent will help ensure that the people who have been impacted the worst by pollution will be the first to benefit, by design. How the LMI bonus credits are implemented is just one way to help heal the harm from past government policies such as redlining, and justice matters.
“While some of these provisions may frustrate friends and colleagues in the industry who have been organizing around the potential economics of these bonus credits, I would encourage us all to step back and appreciate the fine work U.S. Department of the Treasury is leading to align highly technical tax guidance with the policy intent of these new programs to keep the people – and specifically people for whom affordable clean energy can make a difference for their family’s financial security – at the center of the work.”
Statement by Michelle Moore, CEO, Groundswell (groundswell.org)
For more information about the Low-Income Bonus Credits, please refer to https://home.treasury.gov/news/press-releases/jy1269
About Groundswell
Groundswell is a 501c3 nonprofit that builds community power through equitable community solar projects and resilience centers, clean energy programs that reduce energy burdens, and pioneering research initiatives that help light the way to clean energy futures for all. Groundswell leads clean energy programs and projects in five states, serving more than 5,500 income-qualified customers with more than $2.75 million per year in clean energy savings. Learn more at Groundswell.org or @grndswell.