New government money can be used to help companies participate in the green revolution, whether you are looking to go solar or electrify company vehicles.
There’s never been a better moment to enter the climate space.
Three key pieces of legislation will help you to make the leap, whether you’re looking to create a sustainable company or go green to bring in new customers.
First, the Infrastructure Investment and Jobs Act was passed in November 2021. It increases infrastructure spending by approximately $550 billion over 10 years. IIJA targets roads and ports, the internet, rail, public transit, electric vehicles, power infrastructure, resilience, and environmental remediation.
Second, the inflation reduction act (IRA) was passed in September 2022 and allocates $369 million towards energy security over the next ten years.
The CHIPS, Science Act and American Manufacturing, Supply Chains, and National Security are all strengthened by the investment in research and development.
These policies are changing. How can you make the most of them?
1. Low-cost solar can be switched at a discount
Small businesses can receive a 30% tax credit for switching to low-cost solar energy. Solar power will ensure your business has a steady energy supply and a predictable price. Solar can reduce your costs over the long term.
2. Get a tax credit to electrify commercial vehicles
You might also want to invest in your vehicle’s solar power. A tax credit is available for 30% of the cost for commercial trucks and vans. Electric vehicles are now more accessible and reliable thanks to increased investment in domestic EV manufacturing and infrastructure. The new Class 8 semi-trucks claim ranges of 186 mi to 500 mi. Electric vans can travel between 100 to 400 miles.
Like solar power, investing EVs will save you money over the long term because electricity prices are cheaper and more stable than any other fuel. You can also invest in managed Charging to increase efficiency.
This allows you to charge at times when there is less energy available (i.e. The most expensive hours are vehicle-to-grid connectivity, which allows your vehicle to take power from the grid while charging at times that reduce peak energy consumption (i.e. You can even combine your EVs and your renewable electricity to maximize your tax credit.
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3. To increase your building efficiency, you can use tax credits
According to the DOE, homes and commercial buildings consume about $2,000 a year in energy. However, there is a possibility that $200 to $400 of these costs could be wasted due to outdated systems. The 179D tax reduction is increased by the IRA so small business owners can get up to $5 per square feet to help improve energy efficiency.
These improvements can include better lighting, heating, cooling or ventilation systems and building envelopes that separate the air-conditioned from unconditioned areas of buildings. The new tax credit will reduce upfront costs and make your utility bills more affordable as efficiency improves.
4. Participate in the clean energy supply chain
The IRA’s goal is to increase American manufacturing of materials such as batteries, solar and wind components, and carbon capture systems. Twenty companies received grants already, most of which focused on lithium, one the key materials in battery production.
This legislation includes not only tax credits but also domestic sourcing requirements. These domestic sourcing requirements will ensure that every business involved in clean energy supply chains has clients in the US.
The CHIPS and Science Act provide funding for research and development to support these new industries. These grants are targeted at rural areas so you don’t have to be located in a major technology hub like New York City or San Francisco to open an innovative business.
5. Be a part of a hydrogen hub
The Department of Energy launched an $8 Billion program to create regional hydrogen hubs in the US. The creation of hydrogen hubs helps to jumpstart the industry by connecting equipment producers, hydrogen producers, as well as hydrogen users, in order to establish clean energy centers across the country.
In the fall 2023, the new grant funds will be announced. These projects offer both opportunities to be involved and ideas for setting up new businesses. Keep an eye out for these announcements.
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6. Keep an eye out for more grants
New programs and money will be created as the money moves from law into implementation. If you are interested in applying for federal money directly, search for “discretionary” or competitive grants.
These grants are awarded based on a set of criteria. They are often given to federal agencies but can be given to private companies, nonprofits or labor unions depending on the program.
Similar to project grants, they are intended to finance specific projects, initiatives or services. They can be given to government agencies or nonprofits as well as private companies.
The Department of Transportation, Department of Energy and the Environmental Protection Agency will receive a large portion of this funding. Keep an eye on these sites. You can also look into funding opportunities at your local agencies. Consider following groups such as the Blue Green Alliance, or these tricks and tips.
This legislation will help you succeed, whether you are looking to invest in clean fuels and vehicles for your already existing business, or if you want to transition into the fast-growing clean energy sector. This funding will not be available for long so make sure you take advantage of it to make your business part of the net zero future.
