The IRA’s Bonus Tax Credits Will Help Clean Up Fossil-Energy Communities

In response to the U.S. Treasury’s release of its guidance on the Inflation Reduction Act (IRA) bonus tax credit for clean energy projects located in energy communities—a 10% increase to the baseline credits, Evergreen Action Power Sector Policy Lead Charles Harper released the following statement:

“The IRA’s bonus tax credits for energy communities are vital to ensuring a just and equitable transition toward a clean energy economy. We’re happy to see the Treasury taking steps toward the strong implementation of this program.

“Workers are the heartbeat of the U.S economy and they cannot be left behind in economic transition. Communities across the country are filled with hard-working Americans that have historically made their living by working in fossil fuel extraction or adjacent industries. The IRA’s bonus tax credits make certain that as our nation seizes the abundant opportunities embedded in a clean energy economy, we are prioritizing the well-being of those workers.

“The bonus tax credits, along with other bonus credits for prevailing wages and apprenticeships, will help ensure that communities and workers aren’t left behind while offering those same communities the chance to become leaders in the clean energy transition. This is exactly why Evergreen called for these bonus credits from the beginning: as a way of actualizing a just transition for displaced fossil fuel workers. With a boost from the IRA’s bonus credits, Americans previously faced with a declining fossil fuel economy can find thriving opportunities in new, good-paying jobs in clean energy sectors like wind and solar. We know that these bonus credits can, and will, help to set a new trajectory within the very communities that need them most.”

Evergreen was key in shaping and calling for the IRA’s clean energy bonus tax credits—from early 2021 to the early stages of the reconciliation process, and most recently, at the outset of the IRA’s implementation stage, following its passage. The IRA’s clean energy tax credits will likely drive the largest emissions reductions of any IRA program, and the bonus credit for energy communities is an essential way that these tax credits prioritize labor and equity.