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Happy Anniversary, Inflation Reduction Act!

Climate Justice Climate Energy North Carolina

August 16 marks the one-year anniversary of President Joe Biden signing the Inflation Reduction Act (IRA) into law. The landmark law was the first major piece of legislation Congress passed to address climate change, and just one year later, it is already improving people’s lives.

As greenhouse gas emissions from the energy sector are the largest source of climate pollution globally, the law focuses on clean energy investments to mitigate climate change. In just one year, the IRA has created an estimated 170,606 jobs and 272 new clean energy projects

The IRA is projected to reduce greenhouse gas emissions by 31-44 percent, bringing the United States closer to meeting its Paris Agreement commitment of a 50 percent emissions reduction by 2030.

In my current home state of North Carolina, $9.61 billion has been invested in clean energy projects, including electric vehicle and battery manufacturing projects at Toyota, Wolfspeed, Aplitronic, Atom Power, and Kempower. Combined, these nine new clean energy projects have helped create over 4,000 well-paying jobs.

This is all good news, but more improvements to a vibrant clean energy landscape are still needed. With a growing number of climate experts warning that the climate change “tipping point” — the point at which average global temperatures rise 1.5 degrees Celsius above pre-industrial levels and lead to irrevocable damage to climate protective ecosystems (e.g. destruction of coral reefs and melting of the Greenland and West Antarctic ice sheets) — is imminent, immediate climate action is imperative.

To prevent worst-case climate change scenarios, IRA funding must be coupled with reductions in legislative and regulatory barriers to clean energy. State action, including here in North Carolina, is also needed.

Building on the IRA

Improving the regulatory landscape around customer-owned solar electricity generation (think solar panels on residential properties and subscriptions to community solar projects) is one solution to rapidly reduce climate-changing emissions in tandem with IRA funding.

A National Renewable Energy Lab study found that doubling solar panel capacity each year between 2021 and 2025, and quadrupling solar capacity between 2025-2030, could achieve 95 percent grid decarbonization by 2035. In conjunction with solar energy IRA opportunities like the Solar for all Grant for states, municipalities, and nonprofits; Clean Energy Tax Credits for energy producers; and Environmental and Climate Justice Block Grants for community-based organizations, lowering barriers to solar can facilitate these investments and, ultimately, a full and just clean energy transition.

Here in North Carolina, that would include the state:

  • Preserving “net metering” incentives that compensate people who generate their own electricity and transfer unused electricity to utility companies
  • Incentivizing low-wealth people to generate their own electricity on their own properties or in their own communities
  • Creating structural conditions that promote a vibrant, competitive energy marketplace

The Center for Progressive Reform launched a Campaign for Energy Justice in 2022 to help ensure that all people have reliable access to clean, affordable electricity as North Carolina decarbonizes in the face of climate change. As part of that effort, we released a policy brief in April that outlines recommendations the state can take to encourage customer-owned generation, particularly among low-wealth people. While focused on North Carolina, it has lessons for energy justice advocates and policymakers in other states, too.

The brief — Power to the People: Advancing Energy Equity via Customer-Owned Electricity Generation — recommends the above proposals layered on top of IRA funding. If adopted, these recommendations would allow more customers in the state, particularly low-wealth customers, to benefit from their own energy production. Customers who own their own energy production systems build wealth as they reduce spending on energy bills and can even sell their extra energy back to the grid.

Because solar energy is a renewable resource, it has the added benefit of reducing greenhouse gas emissions and improving the environmental and public health of communities. Clean, affordable solar energy is power — and a win-win!

The IRA recognizes the importance of investments in renewable energy like solar, but a friendlier solar landscape is needed in North Carolina and beyond to avert climate catastrophe.

To learn more about the Center’s Campaign for Energy Justice, read our brief, visit our website, subscribe to our email list, and follow us on social media.

Climate Justice Climate Energy North Carolina

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