the “Inflation Reduction Act of 2022,” the bill would spend nearly $370 billion on a raft of tax credits to help stimulate the adoption of clean energy technologies.
By KELSEY TAMBORRINO, JOSH SIEGEL, and ZACK COLMAN, Politico
Senate Democrats struck a deal with West Virginia Sen. Joe Manchin on Thursday for an expansive bill that includes the biggest package in U.S. history to address climate change.
The bill, H.R. 5376 (117), dubbed the “Inflation Reduction Act of 2022,” would spend nearly $370 billion on a raft of tax credits to help stimulate the adoption of clean energy technologies, as well as spending for low-income and minority communities that suffer disproportionately from pollution.
It also calls for holding lease sales for oil and gas production on federal land and water, while establishing fines for excessive methane pollution.
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Here’s a breakdown of what’s in the bill expected to reach the Senate floor next week:
Clean energy tax credits
Democratic lawmakers have long eyed the party-line budget reconciliation as a crucial vehicle for the extension and expansion of a host of renewable energy tax incentives and for next-generation technologies, including clean hydrogen and advanced nuclear — all of which saw support in the final agreement. The package of credits is seen as the biggest driver of emissions reductions, given its role in accelerating the deployment of renewable energy and new technologies.
The agreement includes 10-year extensions of existing credits for wind and solar, as well as provisions for heat pumps, rooftop solar and standalone energy storage, like batteries. The credits also are tied to prevailing wage and domestic content requirements — a bid to help ensure the clean energy transition is built by a unionized workforce and through a domestic supply chain.
EVs
While Manchin raised criticisms about electric vehicle incentives, they ultimately made it into the package: A $7,500 rebate for new vehicles and a $4,500 tax credit for used ones. It’s a potentially significant boon for expanding electric vehicle purchases to drive down greenhouse gas emissions from transportation, the largest source of the greenhouse gases in the U.S.
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