President’s announcement Thursday is just one piece of a big clean energy picture

by Erik Gunn, Wisconsin Examiner
September 6, 2024

On Thursday afternoon, President Joe Biden stood in front of a solar panel array on the grounds of Vernon Electric Cooperative in Vernon County to announce $7.3 billion that will go to expand clean power sources for rural electric co-ops across the country.

It was a big chunk of change, yet just a slice of what has been a major economic priority for Biden since he took office in January 2021: pushing the U.S. toward more clean and renewable sources of energy.

Provisions in two of the Biden administration’s signature pieces of legislation have sought to address climate change on several fronts, but with an emphasis on hastening the country’s conversion to solar, wind and other forms of power that advocates hope can supplant the fossil fuels blamed for accelerating climate change.

The efforts began with the 2021 bipartisan infrastructure law, which included measures to expand electric vehicle charging stations to encourage more drivers to shift away from gasoline-powered cars and trucks.

It accelerated with the 2022 Inflation Reduction Act, which yoked together policies to curb health care costs and rein in tax cheats along with its climate provisions.

Advocates have called the 2022 legislation’s climate provisions a landmark in federal policy — “the most ambitious investment to address the climate crisis ever,” in the words of Amy Barrilleaux, communications director for Clean Wisconsin.

“It’s no exaggeration to say this is a huge deal for the state of Wisconsin and the U.S. as a whole,” Barrilleaux says. “We need this badly.”

For advocates, the legislation reflects the role government can play in advancing clean energy goals instead of relying purely on the private sector.

“Throughout our history, you’ve seen times when the government has gotten involved to push the country forward,” Barrilleaux says. “In the 1930s it was electrifying rural communities. You can wait for the private sector to do that, but it’s slower and more expensive. The government can invest wisely in things that we need, and has done that over and over and over again.”

Power move

Biden’s announcement Thursday focused on just one clean energy avenue — power generation in rural America. Wisconsin-based Dairyland Power Cooperative will receive $573 million, a grant combined with a loan, to increase its supply of solar and wind power. The co-op will combine those funds with private investment for the $2.1 billion project.

Dairyland is one of 16 rural energy co-ops serving 23 states that will participate in the $7.3 billion Empowering Rural America (New ERA) program operated through the U.S. Department of Agriculture. The White House has compared the effort to bring renewable power to places like western Wisconsin to the federal rural electrification program that President Franklin Delano Roosevelt instituted in the 1930s.

“Before the New Deal, private companies refused to provide affordable electricity to rural communities,” Biden told the audience of about 100 people who gathered Thursday afternoon for the announcement. “As a result one in 10 rural households — only one in 10 — had electricity before FDR came to power.”

Farmers, he said, responded by organizing local electric co-ops, which have grown to more than 800 in number across the country.

As nonprofits, however, they don’t qualify for the tax credits available to for-profit utilities for investing in new, renewable power sources. The New ERA program was conceived to provide an alternative, Biden said.

Before the passage of the Inflation Reduction Act, renewable energy investment in Wisconsin had been rising, says Sam Dunaiski, executive director of RENEW Wisconsin, a renewable energy advocacy group. But incentives that the 2022 law instituted or expanded “really kind of kicked this industry into high gear.”

Currently, about 15% of electrical utility generation in Wisconsin comes from renewable sources, such as wind, solar or hydropower. In the short term, the state is on track to grow that to between 25% and 30% in the next few years, Dunaiski says.

Homeowner rebates

Clean energy provisions in the Biden administration legislation aren’t limited to the power supply, however.

The 2022 law includes a collection of tax credits and rebate programs to encourage homeowners to make energy-saving choices, from insulating their homes to replacing old appliances with energy-efficient and low-emission models — heat pumps instead of furnaces, for example, and new electric induction stoves in places of gas stoves.

Green Homeowners United, based in Milwaukee, advises homeowners on measures they can take to improve energy efficiency, ranging from adding insulation to installing new appliances that qualify for the Inflation Reduction Act rebates and tax credits.

Green Homeowners has a staff of trained employees who can do some of the upgrades and a list of approved contractors for other work. The organization also helps homeowners navigate the new tax credit and rebate programs.

Some tax credit incentives were in place before the Inflation Reduction Act became law, but the addition of direct federal rebates has made the incentives more widely available, says Kevin Kane, Green Homeowners’ chief economist.

Kane says improving energy efficiency at home has a double payoff: savings for the homeowner but also contributing to a better environment. A Natural Resources Defense Council analysis in 2017 concluded that improving energy efficiency at home is the single largest way to reduce carbon dioxide emissions.  

“We’re saying, hey there’s a social benefit to all of us upgrading our homes and lowering our energy bills,” Kane says.

“Tax credits don’t help a lot of people below a certain income,” however, he says — because they require someone to spend the money up front to qualify for the tax credit, and they can only collect the credit at tax time.

The new rebate programs, some of which take effect later this year, cut the expense up front, making the qualifying item, such as an appliance, more affordable immediately.

“It’s helping to kickstart the private market to get more people to want to pay for these improvements, because they see the incentive for doing so,” Kane says.

Nonprofits benefit

For years for-profit businesses that adopt clean energy improvements — installing rooftop solar arrays, for example — have been able to take 30% of the cost off their tax bills. But nonprofit organizations and municipalities don’t pay taxes, and haven’t had the same incentive to go green.

That was another change in the Inflation Reduction Act: Direct Pay, a program that provides cash back to those organizations equivalent to what a tax credit would be worth.

A growing number of nonprofits are making use of that provision, says Barrilleaux of Clean Wisconsin. The organization held an event in August with the Black Business Hub of Madison, which installed a new solar array supported by Direct Pay. And a community ice rink in McFarland is now able to operate in the summer, the ice frozen thanks to solar power.

And other forms of clean energy, such as geothermal energy, also qualify under the provision.

Barrilleaux says it’s hard to exaggerate the breadth of the Inflation Reduction Act’s clean energy provisions.

“Legislation, really, that thinks through, from the smallest community food pantry to the biggest utility in the state and everything in between is a huge achievement,” Barrilleaux says.

Yet it remains well under the radar for many, if not most people.

“At Clean Wisconsin, what we’re trying to do is really tell people about it,” Barrilleaux says — explaining to the broader public the variety of incentives for homeowners on up to “the bigger scale things as well. It’s really important to talk about, because it is transformative And there’s so much going on.”

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