Wilson Sonsini’s Energy and Climate Solutions group celebrates the historic passage of the energy and climate provisions of the Inflation Reduction Act of 2022 (IRA). Like our clients, we are mission-driven and laser-focused on the advancement of clean energy and the decarbonization of our economy. With our clients, we applaud the IRA’s long-term vision of a 10-year tax regime, accompanied by automatic stabilizers for the new technology-neutral ITC and PTC to begin in 2025 that will create stable U.S. clean energy tax policy, $369 billion direct in investment in our sector, and additional hundreds of billions in DOE loan authority. Combining these transformative investments with over $120 billion in clean energy and climate infrastructure and technology provisions in the Bipartisan Infrastructure Law (BIL) and the CHIPS Act (CHIPS), the federal government has acted decisively to create fundamental, disruptive change in how we power our economy.
These policies and investments will advance clean technologies, reduce costs of clean energy, stimulate investment, create new business models to meet customer demands, employ millions of Americans, and, most importantly, scale up the nascent American industrial revolution aimed at addressing the global challenge of climate change and thus position the U.S. economy for continued global success. The IRA alone is projected to reduce GHG emissions by approximately 40 percent over 2005 levels.
We are ready to get to work. To assist our clients and collaborators, we would like to make the following resources available.
Advanced Energy Economy (AEE) prepared an excellent overview of the IRA, Advanced Energy Provisions in the Inflation Reduction Act of 2022. We worked with the team at AEE to prepare the summary and AEE has kindly allowed our clients and friends to access the summary on their website. AEE’s summary contains a cogent, readable explanation of the IRA’s clean electricity tax credits, as well as provisions related to clean fuel vehicles and charging infrastructure, funding of EV fleets, advanced energy manufacturing, residential and commercial energy efficiency and electrification, transmission infrastructure, clean energy equity and community investment, and clean energy financing and deployment in rural communities.
Our energy project development and finance teams are hard at work analyzing the tax and related provisions in the IRA to determine how our clients can unlock the benefits for solar and wind, batteries and energy storage, carbon capture, use and sequestration (CCUS), other industrial decarbonization, EVs and charging infrastructure, hydrogen, nuclear, and rural energy infrastructure. We are excited about the new financing possibilities unlocked by the novel provisions of direct pay and the transferability of tax credits, as well as the migration toward a technology-neutral tax credits regime in a few short years. Please sign up using the link below or contact any member of the team listed below if you want to hear more, connect on any of these areas, and dig deeper into the possibilities.
By our calculation, the IRA, BIL, and CHIPS will propel a total of more than $750 billion into federal agencies for ultimate investment in clean energy and climate solutions sectors through grants, loans, and other financial and technical assistance. Yet, following the money down its many paths is not easy; therefore, Wilson Sonsini endeavors to make publicly available a central source of information related to where, when, and how the clean energy investments will become available across multiple federal agencies.
Accordingly, Wilson Sonsini is proud to announce the release of our new Clean Energy & Climate Solutions Federal Funding Database. As a new electronic platform, the database will develop and grow to serve as a central aggregation of relevant clean energy federal funding opportunities across the federal government with current or prospective openings for applications—a single source to track clean energy and climate solutions federal funding opportunities across the federal government (the DOE, EPA, USDA, and DOT, among others). At present, the database is seeded with currently available opportunities funded by the BIL and previous appropriations, but it will grow over time, and we intend to build in enhanced searchability and other options. As the IRA is implemented and subsequent funding announcements pursuant to the BIL and CHIPS are announced, the tracker will be updated with announcements of several billion dollars’ worth of grant, loan, and other non-dilutive awards from the federal government, specific deadlines, opportunities to engage, eligibility requirements, and links to application information. These federal funding opportunities are non-dilutive, support a redundant and therefore stable capital stack, bring a host of reputational benefits, and allow enterprises to leverage from federal systems and expertise.
Finally, we are publishing a white paper, Federal Funding Opportunities for Scaling Climate Solutions, which provides a general guide for understanding how this federal funding works at a high level, particularly for those with less background on these topics. The paper offers an overview of major provisions providing federal funding opportunities to advance clean energy and climate solutions, with a focus on innovation-driven companies, their investors, and strategic partners, and provides an introduction to the Clean Energy & Climate Solutions Federal Funding Database.