The most significant investment in climate action and clean energy in U.S. history has been signed into law, and it’s good news for Maine!
The Inflation Reduction Act (IRA) will have big benefits for Maine people by making clean energy, home efficiency and electrification, and electric vehicles more affordable for everyday people. We know these technologies save people money, and this new law gives us the boost we need to help more and more Mainers make the switch.
Here are four ways the IRA will benefit Mainers and help us meet the goals laid out in our statewide Climate Action Plan, Maine Won’t Wait:
1. Delivering More Affordable Clean Energy
In 2019, Maine updated our Renewable Portfolio Standard, or RPS, with a goal of having 80% of our energy come from renewable sources by 2030. By further lowering the costs of new renewable energy, the IRA will lower rates, reduce electricity bills, and insulate consumers from natural gas price volatility, the main driver of recent rate increases in Maine. Specifically, the IRA:
- Extends and expands renewable energy tax credits for building and producing more local clean energy, like wind and solar.
- Allows tax-exempt entities like cities and towns, to directly benefit from clean energy projects and encourages better labor standards in the clean energy industry.
- Establishes a federal clean energy accelerator mirroring the one created in Maine in 2021, to leverage private capital to fund and invest in climate and clean energy projects, speeding up our energy transition in new ways.
2. Expanding Access to Electric Cars and Trucks
Transportation accounts for half of Maine’s carbon emissions, so electrifying our cars and trucks while cleaning up the grid is a top priority. Maine Won’t Wait has a goal to put 41,000 zero-emission electric vehicles on the road by 2025, and 219,000 by 2030. The IRA will help more Mainers start saving money on transportation each month by expanding access to EVs. Specifically, the IRA:
- Extends and expands a $7,500 credit for new electric vehicles and creates a $4,000 credit for used electric vehicles.
- Allows consumers to get their EV tax credit immediately at the dealer instead of waiting for the next year’s tax filing.
- Targets rebates to lower priced, non-luxury vehicles and lower-income buyers.
3. Energy-efficient Homes and Businesses
Heating, cooling, and lighting buildings is a significant source of Maine’s carbon pollution, and our reliance on heating oil, natural gas, and other fossil fuels costs Mainers a lot of money and has negative health impacts. Maine Won’t Wait includes goals to install at least 100,000 new heat pumps by 2025 and weatherize at least 35,000 homes and businesses by 2030. The IRA includes:
- Tax credits and rebates for money-saving heat pumps and heat pump water heaters, pollution-free electric induction stoves, insulation upgrades, and improvements to home wiring and electric panels to support electrification.
- Rewiring America estimates that households that fully electrify using the incentives in the IRA will save an average of $1,800 every year on energy costs. In Maine, where many households heat with expensive heating oil, the savings are likely higher.
4. Mitigating the Impacts of Climate Change
The IRA includes a number of other elements to comprehensively address climate change, including:
- Funding for making public lands and coasts more resilient to climate impacts, for forest restoration, and climate-smart agriculture.
- Significant provisions for clean energy and climate investments in disadvantaged communities and neighborhoods historically overburdened with pollution.
- Incentives for clean energy manufacturing, like floating offshore wind turbine platforms.
- Funding to expand environmental product declarations for construction materials like steel and concrete, essential for lowering the climate impacts of building projects.
Investments with Enormous Payoffs for Mainers
Independent studies have shown that in addition to lowering inflation and creating millions of jobs, the climate provisions in the bill could cut greenhouse gas (GHG) emissions by 40%, significant progress toward what scientists tells us is needed to limit global warming’s impacts.
Taking action on climate is not only reducing dangerous climate changing pollution, it’s saving Maine families money today. After all, the biggest driver of high energy prices is our continued dependence on fossil fuels like oil and natural gas. Just a few weeks ago the Maine Public Utilities Commission (PUC), announced a reduction in electricity rates due to our state’s procurement of cheap solar energy. High-efficiency heat pumps show big savings over fossil fuel heating systems. And electric and hybrid vehicles have far lower fuel costs than gas-powered cars and trucks.
Here in Maine, we’re already leading on climate. Bipartisan majorities in the Legislature and Governor Janet Mills have enacted emissions reduction goals and dozens of new clean energy laws. Even though high fossil fuel prices are squeezing Maine families, clean energy technologies being used as a result of these new laws are saving tens of thousands of Maine families money today.
Federal action is long overdue to support the achievement of Maine’s ambitious climate and clean energy goals. Thanks to the work of the Natural Resources Council of Maine, our members, and many others, Maine is currently on a path to hit our greenhouse gas reduction targets. The IRA will support, expand, and accelerate that progress, and not a moment too soon.
—by Jack Shapiro, NRCM Climate & Clean Energy Director