A year after the adoption of the Inflation Reduction Act, the single largest government climate change investment in U.S. history, Maine and other states are still waiting for the bulk of those promised federal dollars to hit the streets.
Maine Gov. Janet Mills, far right, Maine Community College System President David Daigler, center, and White House national climate advisor Ali Zaidi listen to an explanation of how a heat pump operates during a tour of Kennebec Valley Community College’s heat pump workforce training lab in Fairfield in July. Michael Seamans/Morning Sentinel
State leaders insist, however, that the law’s impact will be substantial once the funding begins to flow.
“The Inflation Reduction Act is a big, bold investment in a brighter future for America – one where our communities are healthier, costs are lower, air is cleaner, energy is greener, jobs are better, and the economy is stronger,” said Gov. Janet Mills, who is also co-chair of the U.S. Climate Alliance.
The biggest benefits provided to Mainers by the landmark law so far are the federal electric vehicle and heat pump tax credits that became available in January. It is too soon to say how many Maine residents took advantage of these credits, which are claimed on federal tax forms.
There is no time limit on these tax credits, which are expected to be available for at least a decade.
The biggest impacts of the IRA probably won’t be felt until 2024 when IRA-funded home efficiency and electric vehicle rebates go into effect. These rebate programs will be administered by states, which must apply for funding and create programs before the money can go out.
Maine has applied for the rebate funding and expects to roll out its programs later this year or early next.
It is important to note, however, that many of these rebates will come with income restrictions meant to direct benefits to low and moderate-income Mainers, many of whom have struggled to reap the financial benefits of heat pumps and electric vehicles.
The state has published an online guide to the climate incentives available to Mainers through the IRA.
The state set a goal to install 100,000 heat pumps in Maine homes and put 219,000 electric vehicles on the road to help cut emissions by 45 percent by 2030. It met its first heat pump goal this year, and wants 175,000 more by 2027. But at 9,500 vehicles, Maine has only achieved 4 percent of its EV goal.
Climate officials say the best way to meet both goals is to help low-income Mainers afford both.
“It will be exciting when it gets here, but it will take a while for the money to hit the streets,” said Michael Stoddard, executive director of Efficiency Maine, the independent administrator of energy efficiency programs in Maine. “For a state like Maine that does so much heating, it will be significant.”
The trickle-down impact of government-funded energy efficiency incentives has already led to the creation of some new jobs. A heat pump manufacturer in Maine announced in March that it had raised $6 million in private funding to build a new factory in Bangor that would employ 200 people.
By 2024, Maine will be spending a $3 million climate pollution reduction grant it received this month. The Maine Climate Council plans to use the funding to engage disadvantaged communities and fund studies and analyses needed for its next update of the state’s climate action plan.
Maine also submitted its notice of intent to apply for the Greenhouse Gas Reduction Fund Solar for All competition, which will provide billions of dollars to increase access to affordable, resilient, and clean solar energy for low-income households. Final applications are due next month.
“One of the things we’re excited about next is the availability of IRA incentives for public projects, such as municipal buildings or schools,” said Anthony Ronzio, the Office of Policy Innovation and the Future deputy director. “The rules are still being finalized but should be available soon.”
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