‘A generational bill,’ Missoula County exploring clean-energy opportunities in Inflation Reduction Act

Martin Kidston/Missoula Current

With the Inflation Reduction Act signed into law, Missoula County has begun pouring through the details and stands inspired by the clean energy and climate provisions included in the sweeping piece of legislation.

Caroline Bean and Andrew Valainis, both with the county's Climate Action Program, said the bill's focus on energy efficiency, energy production, job creation, tax credits and clean power will be a game changer in helping the city and county move closer to their goal of 100% clean electricity.

It will also help the U.S. do it's part in achieving the goals of the Paris Accord. Before the legislation was signed into law, the nation's current policy was on track to cut greenhouse gas emissions by less than 35%. The new bill will increase that to 44%

“This gets us about 40% of the way to 2005 levels,” said Bean. “There's still work to do, but it's a huge improvement. It truly is a generational bill.”

The package includes $4.5 billion in direct rebates for homeowners to install energy efficient appliances. Those households earning less than 80% of the area median income will have 100% of the upgrades covered, while those earning between 80% and 150% will have 50% of the costs covered. The technology includes electric stoves, water heaters and other things.

Bean said the new Energy Efficient Home Improvement Credit will also be beneficial. It allows households to deduct 30% of the cost of energy efficient upgrades to their homes, including insulation, heat pumps and upgraded electrical panels.

The bill also offers incentives to developers, including $5,000 to build homes that qualify for the U.S. Department of Energy's “Zero Energy Ready Homes standard.” Commercial businesses can qualify for reductions as well if they reduce energy use by 24% to 50% over base code.

The tax incentives go into effect next January, the county said.

“It really offers incentives from the tax perspective,” said Bean. “It's exciting to see it go into effect so soon.”

Valainis said the package also restores the full value of both the Production and Investment tax credits through 2024, and creates a new Clean Electricity Investment Credit. The latter will be available for 10 years, giving certainty to developers and home owners.

The opportunities could help Missoula County residents install rooftop solar and storage, and it may benefit the county as it works to expand its own photovoltaic systems. The measure could cut the county's payback period on its solar investments by five to 10 years.

“It gives huge project certainty for developers,” Valainis said of the investment credit. “If you already have solar on your house, you can install storage using the credit. The standalone credit is something the industry has been after for a long time.”

While some aspects of the bill aren't yet clear, the county said it includes funding to support climate smart agricultural practices, including soil carbon storage and conservation easements.

It includes $5 billion in fuel management grants to landowners, and $3 billion in equity grants that can be used to address transportation, stormwater, air quality, urban forests and urban island heat effects.

Valainis said the bill provides incentives for oil and gas producers as well by seeking a reduction in methane and other CO2 emissions. A $500 million measure through the Defense Production Act also seeks to accelerate the domestic supply of critical minerals, including those used in batteries and solar panels.

“A lot of things it tries to focus on is boosting American and domestic manufacturing and production,” Valainis said. “A lot of people are talking about a shortage of production in general – electric vehicles and solar panels. There's a lot in here to support that.”

As elements of the bill begin to take shape, both the city and county will be looking at the programs with an eye on cutting their own emissions. Both have pledged to achieve zero waste and achieve 100% clean electricity by 2035.

Elements of the bill could help those efforts.

“Likely a lot of it will come through the state, and a lot of it will be us helping Missoula County residents navigate some of this,” said Bean.