- Newsletter (345)
Welcome to the weekly newsletter of the Michigan Energy Innovation Business Council (Michigan EIBC), the business voice for advanced energy in Michigan. Here’s what’s new this week:
How The IRA Reshapes Tax Credits for Efficiency and Electrification
The Inflation Reduction Act (IRA) is a complex piece of legislation that will be shaping the energy sector in the U.S. and Michigan for the foreseeable future. We did a deep dive into the IRA by subject area to help the advanced energy community in Michigan understand the many provisions within the buildings. Today we feature the credits related to efficiency and electrification.
Extension, Increase, and Modifications of Nonbusiness Energy Property Credit (Section 13301)
The tax credit (section 25C of the tax code) allows residential homeowners to use qualified energy-efficiency improvements and expenditures for residential energy property on a taxpayer’s residence to reduce their federal income tax liability.
The IRA made several changes to this credit:
- tax credit extended from end of 2021 to end of 2032
- credit renamed to the “Energy Efficient Home Improvement Credit”
- increased from 10% to 30%
- now applies to non-primary residences
- now applies to biomass stoves and home energy audits
Limits applied to the credit are:
- annual per-taxpayer limit of $1,200 and a $600 per-item limit for most expenditures, but an annual credit limit of $2,000 for geothermal and air source heat pumps and biomass stoves
- home energy audit credits limited to $150
- starting in 2025, taxpayers are required to submit a product identification number to claim the tax credit
Residential Clean Energy Credit (Section 13302)
This tax credit for residential homeowners (section 25D of the tax code) applies to purchases of solar electric property, solar water heating property, fuel cells, geothermal heat pump property, small wind energy property, qualified biomass fuel property and, now with the IRA, qualified battery storage property.
- extended the credit from the end of 2023 to the end of 2034
- adds battery storage technologies to list of eligible properties
- size of the credit is 30% through 2032, 26% in 2033 and 22% in 2034
- to qualify, battery storage must have a capacity of not less than 3 kilowatt-hours
Energy Efficient Commercial Buildings Deduction (Section 13303)
This deduction (which does not expire; section 179D of the tax code) applies to commercial property owners or tenants who pay for costs of construction. Previously, this was a permanent deduction of up to $1.80 per square foot allowed for certain energy-saving commercial building property installed as part of (1) the interior lighting system; (2) the heating, cooling, ventilation, or hot water system; or (3) the building envelope.
Now, the IRA has changed this deduction to be $0.50 per square foot, increased by $0.02 for each percentage point by which the certified efficiency improvements reduce energy and power costs, with a maximum amount of $1.00 per square foot. For projects that meet prevailing wage and registered apprenticeship requirements, the base amount is $2.50 per square foot, which would be increased by $0.10 for each percentage point increase in energy efficiency, with a maximum amount of $5.00 per square foot.
To qualify, a building must increase its efficiency relative to a reference building by 25 percent. The deduction applies to taxable years after December 31, 2022, and not later than the date that is 4 years before the date such property is placed in service.
New Energy Efficient Home Credit (Section 13304)
This credit (section 45L of the tax code) is for single and multifamily homebuilders. The IRA increases this credit from $2,000 (with certain manufactured homes qualifying for a $1,000 credit) to a $2,500 credit available for new homes that meet certain Energy Star efficiency standards, and a $5,000 credit available for new homes that are certified as zero-energy ready homes.
Tax credits for multifamily dwelling units that pay prevailing wages to laborers and mechanics during construction are increased to $2,500 (for dwellings that meet certain Energy Star efficiency standards) and $5,000 (for eligible zero-energy ready multifamily dwellings)
The credit is extended through the end of 2032. It applies to homes and units acquired on or after January 1, 2023.
Residential Solar Installations Expected to Have Record Year
Adding to the signs that the renewable energy industry is bouncing back from the pandemic and supply chain woes, more residential solar capacity will be installed in the U.S. in 2022 than any previous year, according to a new analysis from Bloomberg New Energy Finance.
The analysis projects that a record 5.6 GW of residential solar will be installed by the end of the year, three times more than projected new commercial solar capacity. Some of the biggest factors driving consumers to adopt solar are high electricity prices and a need for greater reliability in the face of more power outages caused by increasingly severe weather.
In future years, the effects of the IRA tax credit provisions will be another tailwind for solar growth. In a recent report, the Solar Energy Industries Association said the greater demand for solar triggered by the IRA, combined with provisions to encourage domestic manufacturing, could lead to a “renaissance in American solar manufacturing” that “will insulate the U.S. solar and storage industry from global supply disruption and help secure the safety and reliability of the electric grid.”
Michigan EIBC Is Hiring: Energy Policy Expert
The Michigan Energy Innovation Business Council (Michigan EIBC) and Institute for Energy Innovation (IEI) are hiring a full-time energy policy expert. Applications will be accepted for one more week until September 9th!
The chosen candidate’s policy portfolio may include:
- Development of legislative strategy and policies in collaboration with policy team
- Legislative advocacy including meetings with legislators and partners
- Support of advanced energy sector-specific initiatives including research and report writing
- Support of regulatory policy efforts at the Michigan Public Service Commission
- Support of advanced energy sector-specific initiatives, including research and report writing
- Communication and collaboration with members of the advanced energy industry
- Support of sector-specific initiatives and events in collaboration with team
Tickets On Sale for 10th Annual Michigan Energy Innovators Gala
Tickets and sponsorship opportunities are available for the 10th Annual Energy Innovators Gala on Sept. 28 at The Eastern in Detroit! Get your tickets now! Please click here for more sponsorship details and contact Brianna Gerard at email@example.com with any questions.
5:00 pm | Cocktail hour + Networking (open bar + food trucks serving)
5:30 pm | VIP reception (open bar + food trucks serving)
6:00 pm | Keynote Speaker + Awards Program
7:30 pm | Continued Networking + Dessert & Coffee/Tea Bar
8:00 pm | Event Concludes
The Gala’s keynote speaker will be State of Michigan Treasurer Rachael Eubanks. Eubanks was appointed as Michigan’s 47th State Treasurer by Governor Gretchen Whitmer in January of 2019. She is committed to bringing creativity, collaboration, and commitment to identify and implement solutions to some of Michigan’s greatest challenges. She does this while also building upon Treasury’s culture of service to Michiganders, through continuous improvement and employee engagement, which are the foundation of Treasury’s mission to provide fair and efficient financial services on behalf of taxpayers, governments, students, and all Michiganders, for the long-term fiscal health and stability of our state. In 2016 she was appointed by Governor Rick Snyder (and reappointed in 2017) to serve on the Michigan Public Service Commission (MPSC) as a utility regulatory commissioner. In that capacity she reviewed and voted on hundreds of orders that helped shape Michigan’s energy future. In particular, the Commission had regulatory oversight over the implementation of two comprehensive energy law changes during her tenure. She served on several national organizations, including being elected as Vice President to the Organization of PJM States, Inc., and was on the Board of Directors of the National Association of Regulatory Utility Commissioners, where she was Chair of the Supplier and Workforce Development Subcommittee.
Thank you to our sponsors!
EDF Renewables Distribution-Scale Power team provides industry-leading, cost-effective development, engineering, construction, and operations of solar and storage projects. Solutions are customized for utilities, co-ops, landowners, communities, and institution. The team specializes in community solar and environmentally sensitive sites and has developed over 1400+ MW of solar and storage projects across the United States.
Inman Solar is a Developer, EPC and Owner/Operator of commercial and small utility scale solar PV projects.
Michigan State University
Sustainability is a Spartan Priority. Our land grant roots power our vision for the future. Established in 1855 as the nation’s pioneer land-grant university and Michigan’s first agricultural college, MSU was called upon to address growing areas of concern in the country: education, agriculture, infrastructure and science. Today, MSU’s 5,200 acre campus is still home to leading research, as well as cutting-edge technologies, award-winning programs and thousands of Spartans working to make a difference every day – addressing sustainability challenges across all disciplines. With dynamic facilities like the South Campus Anaerobic Digester, the Student Organic Farm and the Facility for Rare Isotope Beams, MSU continues to serve as a beacon for innovative leaders who want to use their educational experience to shape the solutions of tomorrow. MSU continues to set a standard of sustainability excellence for universities globally: by eliminating the use of coal at the T.B. Simon Power Plant in 2016, building the largest solar covered parking area in the nation and continuing to invest in student research, cross-disciplinary partnerships and expanded building efficiencies. Spartans are at the forefront of discovery, building on a foundation of strong core values to deliver high-impact results to the campus community and beyond. Guided by a powerful vision and mission, MSU strives to enable Spartans to conduct this important work on a campus that delivers on efficiency and innovation.
Michigan Energy News
- Groups like the Natural Resources Defense Council and the Citizens Utility Board of Michigan argue that DTE residential ratepayers should not have to bear all of the increased costs DTE is proposing in its rate case.
- A ribbon-cutting ceremony, attended by Gov. Whitmer, is held for SK Siltron’s $300 million expansion of its semiconductor wafer manufacturing plant in Bay City.
- More than 10% of DTE’s electric service territory in southeast Michigan was without power on Aug. 22 following thunderstorms.
- Here is how DTE and Consumers Energy customers can apply for a bill credit in return for losing power.
- DTE President Trevor Lauer blames trees not in DTE’s “right-of-way” as the biggest causes of the power outages.
- A fire at a BP refinery in Indiana causes Gov. Whitmer to declare a state of emergency over disruptions to gasoline and diesel supply.
National Energy News
- As Californians are called on to conserve energy during a heat wave, the governor declares a state of emergency and the state legislature approves a bill to extend the life of the Diablo Canyon nuclear plant.
- In response to incentives found in the IRA, First Solar plans to build a new 3.5-GW solar module plant in the Southeast and expand its manufacturing capacity in Ohio.
- A number of environmental groups file a petition with the EPA asking it to phase out gas and oil-burning furnaces and water heaters.
- A $1 billion transmission line project in New England gets a win in a Maine Supreme Court ruling that follows a ballot initiative that had blocked the project.
- Automakers and mining companies are pushing for a change to a federal law on mine permitting, saying the process is too long given demand for minerals for batteries used in EVs and energy storage.
- Environmental justice advocate groups have been skeptical of the IRA, but most see it as an improvement on the status quo.
Attention Michigan EIBC members: if you have a job announcement you would like in the newsletter, please send a paragraph describing the position and a link to apply to Matt Bandyk at firstname.lastname@example.org. Please include in the email a specific end date for the job posting.
5 Lakes Energy
5 Lakes Energy is hiring a Consultant or Senior Consultant (depending on relevant experience and skills) to help advance clean energy policy in the Midwest. As a small, well-respected firm with broad expertise and a range of sought-after practice areas, the Consultant should expect to work on a wide variety of projects in the effort to mitigate climate change and accelerate the clean energy transition, with a focus on analytical modeling to calculate social, economic, and environmental impacts of policies in the energy sector and to move electric utilities to fully decarbonized but reliable and affordable power supply. 5 Lakes Energy works consistently in Michigan but also engages elsewhere across the Midwest and the US.
5 Lakes Energy
5 Lakes Energy is hiring an Expert Consultant to help advance clean energy policy in the Midwest. As a small, well-respected firm with broad expertise and a range of sought-after practice areas, the Expert Consultant should expect to work on a wide variety of projects in the effort to mitigate climate change and accelerate the clean energy transition, with a focus on providing expert advice and testimony in the areas of electric utility cost-of-service and rate design, particularly in relation to the use of clean energy technologies, such as distributed generation, energy storage, heat pumps, and electric vehicles. 5 Lakes Energy works consistently in Michigan but also engages elsewhere across the Midwest and the US.
Michigan and National Energy Events
The 10th Annual Energy Innovators Gala will be held on Sept. 28 at The Eastern in Detroit. Get tickets here.
The Detroit 2030 District will be hosting the 2030 Districts Network International Summit when all twenty-four 2030 Districts come to Detroit on Oct. 4-6. Tickets are available to the public. Click here to register. The Detroit 2030 District is one of twenty-four 2030 Districts across North America. Michigan is the only state with three Districts–Detroit, Ann Arbor and Grand Rapids.
Consumers Energy has developed a draft RFP to solicit up to 700 Zonal Resource Credits (“ZRCs”) of capacity and associated energy and renewable energy credits (“RECs”), if applicable, starting on May 31, 2025. Find the draft RFP documents here. Notices of intent are due Oct. 21.
The U.S. Department of Energy’s Solar Energy Technologies Office (SETO) announced the Advancing Equity Through Workforce Partnerships funding opportunity, “which will award $10 million for the development of collaborative workforce programs that will facilitate the rapid deployment of solar energy technologies while supporting an inclusive workforce with opportunities for union membership.” Applicants must file a mandatory letter of intent by Sept. 13.
The DOE issued a Request for Information (RFI) for the $750 million Advanced Energy Manufacturing and Recycling Grant Program. The program aims to support manufacturers to produce clean energy products or deploy emissions reduction equipment at facilities in coal communities. RFI responses are due Sept. 16.
The U.S. Department of Energy’s Community Geothermal Heating and Cooling Design and Deployment Funding Opportunity Announcement (FOA) will award $300,000–$13 million for “projects that help communities design and deploy geothermal district heating and cooling systems, create related workforce training, and identify and address environmental justice concerns.” The application deadline is Oct. 11.
The Community Collaboration on Climate Change (C4) is seeking a full-time contract position to provide coordination of C4 leadership, organizational representatives, Grand Rapids residents, and the program deliverables.
State of Michigan DNR is going big in solar with projects in the ground, others in development and additional ones being planned. DNR has released a Request for Proposal for Prequalification Program for Renewable Energy PPAs: www.michigan.gov/sigmavss. Use “Guest Access” to get the RFP. A previous round of pre-qualifications netted solar companies that then were able to bid on a portfolio of DNR solar projects in Southwest Michigan. Another portfolio in the Northern Region is in the works for later this year. Only companies who pre-qualify can bid on future DNR solar projects. Please direct all correspondence to the Solicitation Manager, Laura Gyorkos at gyorkosL@michigan.gov.
The Michigan Economic Development Corporation’s PlanetM Testing Grant gives mobility companies the opportunity to access testing facilities around the state, including Mcity at the University of Michigan. Apply here.
Aaron Kurz, a former Michigan EIBC intern and University of Michigan alum, is working to build a state-level Science Policy Fellowship in Michigan, the Michigan Initiative for Science Policy (MISP). This program will place five recent STEM PhD recipients throughout the Michigan state government to provide a source of non-partisan, evidence-based information to decision makers. MISP will join the 10 other state programs throughout the country, including Idaho, Missouri, and New Jersey. Additional information about this initiative may be found at miscipol.org. If you are interested in providing written support for MISP, please contact Aaron at email@example.com.