As the federal government’s most significant action ever on clean energy and climate mitigation, the IRA opens up significant opportunities for a new era of climate investment. The IRA includes more than US$369 billion, split between new direct spending, incentives for private investment, bonus incentives and tax credits. The IRA could provide much needed investment in school districts, cities, states and public authorities, as well as help to create quality jobs and achieve multiple equity, environmental and justice goals. Through the Elective Pay policyand Low-income Communities bonus credit, the IRA has opened critical clean energy project financing by making tax credits available to organizations and cities for the first time.
Leaders from the public, financial, industry and nonprofit sectors agreed that the potential for impact is enormous. Nonetheless, there are many ways different actors in the system must work together in novel ways to take full advantage. If implemented successfully, the IRA can increase social and economic benefits for historically marginalized communities, which are disproportionately impacted by climate change. To do so will require breaking down barriers between local governments, community development finance institutions, capital providers, businesses and community interests.