The Senate approved the Inflation Reduction Act on a party-line vote Sunday, sending the bill to the House of Representatives for a scheduled vote on Friday.
“The House will return and move swiftly to send this bill to the President’s desk,” House Speaker Nancy Pelosi, D-Calif., said in a statement.
After gaining the support of Sen. Kyrsten Sinema, D-Ariz., late last week, Senate Democrats passed the bill through the budget reconciliation process, which requires a majority vote and cannot be blocked by a filibuster. The bill passed on a 51-50 vote, with Vice President Kamala Harris casting the tie-breaking vote.
The bill contains a range of incentives and tax credits to spur emissions-free energy, electric vehicles, nuclear power and clean hydrogen, among other things.
After the bill passed, Senate Finance Committee Chair Ron Wyden, D-Ore., touted the bill’s tax credit provisions, noting they will be in place for 10 years.
“Congress will no longer need to extend these incentives every few years, giving companies and states certainty to plan clean energy projects and create jobs,” Wyden said in a statement.
Also, after 2024, the renewable energy production tax credits will shift from being technology-specific to being emissions-based and technology-neutral.
“For the first time, the tax code is going to reward emissions reductions, and encourage the development of new clean energy technologies as soon as they come online,” Wyden said. “No longer will Congress need to legislate technology by technology, making it easier to innovate and bring new technologies to market.”
The 10-year tax credit policy will provide the solar and energy storage sectors with needed certainty, according to Abigail Ross Hopper, Solar Energy Industries Association president and CEO.
For example, the bill extends the solar investment tax credit, or ITC, and makes it “buildable” by making it larger if certain labor and domestic content criteria are met, Hopper said Monday during a press briefing. Also, the credit can cover interconnection costs.
In addition, the ITC can be taken instead as a production tax credit, and the legislation creates a stand-alone energy storage tax credit, Hopper noted.
“All of these changes give companies a lot more flexibility in how they choose to benefit from these incentives, helping them to make the best decision possible for their own business,” Hopper said.
The bill contains tax credits to reward domestic solar manufacturing. If the bill becomes law, Hopper said she expects a spate of U.S. manufacturing groundbreakings and announcements.
The bill’s refundable and transferable tax credits will allow renewable energy developers to move more quickly on their projects, according to Nat Kreamer, Advanced Energy Economy CEO.
“Global inflation in fossil fuel costs underscores the need to speed up development of advanced energy projects and modernize our power grid,” Kreamer said in a statement.
Utility and clean energy trade groups praised the bill’s passage.
“Electricity customers across the country will benefit greatly from the clean energy tax credits included in the Inflation Reduction Act,” Edison Electric Institute President Tom Kuhn said in a statement. “This monumental legislation provides much-needed certainty and will help electric companies reach a clean energy future faster, without compromising on the reliability and affordability that customers value.”
National Rural Electric Cooperative Association CEO Jim Matheson highlighted two provisions in the bill that would benefit cooperative utilities: direct-pay tax incentives for tax-exempt entities and a $9.7 billion grant and loan program designed for electric cooperatives that buy or build clean energy systems.
The bill could cut U.S. greenhouse gas emissions by around 40% by 2030, according to various estimates.
