May 15, 2023
Source: Inside Climate News
Imagine a 1-megawatt solar array on about eight acres of land in West Virginia. To make the math simple, let’s say it costs $1 million.
Under the Inflation Reduction Act, the landmark federal climate and clean energy law, this project would qualify for the “investment tax credit,” which is worth 30 percent of the project’s cost.
But that’s just the beginning of a series of stackable credits, like a layer cake, that can add up to huge benefits.
The IRA includes a bonus credit of up to 10 percent for projects in “energy communities.” The law defines energy communities as places with shuttered coal mines and coal-fired power plants, and places with a history of employment in fossil fuel industries and higher unemployment than the U.S. average. Most of West Virginia is an energy community, as is most of Texas and parts of the Midwest, Mountain West and South—a designation that includes some of the reddest parts of red states.
The law also includes a bonus credit of up to 10 percent for projects that use equipment manufactured in the United States.
Read more: Red States Stand to Benefit From a ‘Layer Cake’ of Tax Breaks From Inflation Reduction Act