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IRA Funding for �Clean Energy Projects

Kathy Kuntz, Director

CCL Wisconsin

March 2, 2024

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Office of Energy & Climate Change

Inside County Exec Parisi’s Office
Reduce emissions in county operations

Carbon neutral facilities/fleet/land by 2030

Reduce countywide emissions

Cut emissions 50% by 2030
Carbon neutral by 2050

2020 Climate Action Plan
Find us at DaneClimateAction.org

DaneOECC on social media

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Dane County Is Leading By Example

100% renewable offset electricity for our facilities

100+ vehicles running on Renewable Natural Gas from the landfill

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Celebrating 150+ Local Climate Champions

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Making It Easy to Access IRA Funding

Clear explanations
Up-to-date information
Links to forms
Email alerts

https://daneclimateaction.org/�what-you-can-do/federal-funding

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Federal $ = Huge Opportunity in Wisconsin

Unprecedented Amount of Funding

Bipartisan Infrastructure Law (BIL)

Mostly formula and competitive grants

Inflation Reduction Act (IRA)

Financial incentives so clean energy cheapest option
Mostly (2/3) tax credits

Addresses Long-Standing Gaps in Purple Wisconsin

More money for renewables, energy efficiency
New money for electrification
New opportunities for customers who use propane for heating
Increased emphasis on hard-to-reach households

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Feds Did an End Run – Now It’s Up to Us

Use the new funding
Get efficiency, electrification and �renewable energy projects done
Document the benefits of action
Build the case for ongoing funding

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Renewable Energy Credits for EVERYONE

30% credit for solar, wind, battery storage and geothermal

Businesses
Farms
Tax Exempt Entities
Homes
Apartments

Can layer with Focus on Energy and PACE financing (not homeowners)

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The IRA Expanded Renewable Energy Credits

Congress: everyone should benefit �from these tax credits

Nonprofits and local governments can now�get credits (Elective Pay)
For-profits without tax liability can transfer�credit
Homeowners can carry forward the credit to �future tax years

No limit on size of credit

Over 1 MW systems have to meet prevailing wage to get full 30%

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Renewable (ITC) Tax Credit 2023-2032�Solar, Wind, Geothermal, Batteries

	Less than 1 MW	Over 1 MW (1,000 KW)
Base Credit	30%
Meets Prevailing Wage/Apprenticeship	N/A	No: 6%	Yes: 30%
Domestic Content	+10%	+2%	+10%
Energy Community	+10%	+2%	+10%
Bonus Credits (competitive with annual limits)
LMI Communities or Tribal Land	+10%	+10%	+10%
Qualified Low Income Building or Impact	+20%	+20%	+20%
Subtotal of Credits
Tax-Exempt Financing	Subtract 15% of subtotal
Total Tax Credit or Direct Pay	Up to 70%	Up to 30%	Up to 70%

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Solar Electric Systems Are Increasingly Affordable

https://www.nrel.gov/news/program/2021/documenting-a-decade-of-cost-declines-for-pv-systems.html

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Solar Typically Tied to Electric Grid

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Case Study: McFarland Public Safety Center

Fire, Municipal Court, and Police
58,000 sq ft
A net-zero building

Geothermal
Solar arrays

Project Costs

$850,000 Solar PV
$2.5M geothermal & HVAC system
Total for solar/geo $3,350,000

Expect about $1M in Elective Pay Credits

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The Big Energy Efficiency Opportunity

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Pursue Efficiency If…

Some rooms/floors are a lot warmer/cooler than �other rooms/floors
Some windows frost up in the winter
Snow melts off your roof faster than it melts off �of the neighbor’s roof
You have big icicles hanging from your eaves
Your energy usage is higher than similar homes �in the neighborhood

You can look this up on MGE and Alliant Energy’s websites

First step? ENERGY AUDIT!!

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Efficiency Tax Credits for Homeowners

Up to 30% of cost of eligible energy �efficiency measures

Annual maximum of $1,200 �plus $2,000 maximum for heat pumps
Do not carryover to next year
Encourages a multi-year plan

Claim on taxes the year after you do �the work
Layer with Focus on Energy incentives

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New Energy Efficiency & Electrification Programs

Home Energy Rebates (HER) via Wisconsin’s Focus on Energy
Energy efficiency incentives

Incentive based on energy savings achieved
Single family and multi-family (landlords) eligible
Higher incentives for low-moderate income folks

Electrification incentives

Heat Pumps, Induction Stoves, Panel upgrades
Up to 100% of cost if < 80% of area median income
50% for households 80% - 150% of area median income
Households > 150% of area median income are not eligible

Both programs will launch summer 2024

Federal guidance summer 2023, then states have to create a plan…
If you install now you can’t be sure you’ll be eligible for these programs

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Heat Pumps in Wisconsin

Your air conditioner is a heat pump with half the features
Common heat pump options:

Ground source (geothermal) – use constant temps under ground
Cold climate air source (often includes some back up electric heat)
Dual fuel (leveraging air source heat pump and gas/propane system for coldest days)
Ductless “zone” units

Best choice depends on home efficiency, existing heating system, current fuel costs, and consumer priorities (Money? Emissions? Comfort?)
Currently the dual fuel option seems best for finances and emissions

Assuming you heat with natural gas like most folks in Wisconsin

Focus on Energy has a new consumer guide to heat pumps
Dane County has a list of local heat pump installers on our website

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Business: EE Improvement Tax Deduction

Tax deduction based on modeled energy savings

5X higher incentive if prevailing wage, apprenticeship

$2.50/sq ft for 25% savings
$5/sq ft for 50% savings

Baseline for existing buildings is past energy usage
Also available for new construction

Can layer Focus on Energy and PACE financing
Tax-exempt entities can assign tax deduction to design team
Best opportunities in older, inefficient facilities

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IRA & Electric Vehicles

Individuals

Up to $7,500 for qualifying new vehicles

Increasingly rigorous requirements for battery components and assembly

Requirements do not apply to leased vehicles

Not available for premium vehicles or high income folks

Up to $4,000 for a used EV

Sale price cannot exceed $25,000
Must purchase from a dealership
Individual income of $150,000 or less to qualify

In 2024 can be instant rebate off purchase price

Businesses/nonprofits

Up to $7,500 for light duty vehicles

Applies to all EVs and non-road (forklifts, commercial lawnmowers)

Up to $40,000 for heavy-duty vehicles

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EVs are the Future

Auto manufacturers are shifting to EVs

Ford & GM: 50% of new sales by 2030
Cadillac & Volvo: 100% of new sales by 2030

Benefits of driving an EV…

Charge at home
Minimal maintenance
Clean and quiet
Torque = fun to drive

Curious about chargers?

PlugShare.com

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Resources Make It Easy to Go Green

https://daneclimateaction.org/what-you-can-do/federal-funding

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Questions? Comments?

Kathy Kuntz

Kuntz.Kathryn@countyofdane.com

DaneClimateAction.org

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Energy Efficiency Tax Credit Scenarios

Example 1: Reduced Tax Liability
Jane’s annual tax liability (total she must pay)	$5,000
Qualifying heat pump purchase earns heat pump tax credit	($2,000)
Adjusted federal tax liability	$3,000
Annual withholdings (Jane’s pre-paid taxes)	$3,000
Jane owes	$0

Example 3: Partial Benefit
Bill’s annual federal tax liability	$1,500
Qualifying heat pump purchase earns heat pump tax credit	($2,000)
Adjusted federal tax liability	$0
Annual withholdings (Bill’s pre-paid taxes)	$1,500
Bill’s tax refund	$1,500

Example 2: Increased Refund
Arlo’s annual federal tax liability	$5,000
Qualifying heat pump purchase earns heat pump tax credit	($2,000)
Adjusted federal tax liability	$3,000
Annual withholdings (Arlo’s pre-paid taxes)	$5,000
Arlo’s tax refund	$2,000

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Solar/Geothermal/Battery Storage �Tax Credit Scenarios

Example 1: Reduced Tax Liability
Malcolm’s annual federal tax liability	$15,000
Qualifying solar purchase earns solar tax credit	($9,000)
Adjusted federal tax liability	$6,000
Annual withholdings (pre-paid taxes)	$10,000
Malcolm’s tax refund	$4,000

Example 2: Reduced Tax Liability – Extended to 2024
Maria’s federal tax liability	$5,000
Annual withholdings (pre-paid taxes)	$5,500
Qualifying solar purchase earns solar tax credit	($9,000)
Adjusted federal tax liability	$0
Maria’s tax refund	$5,500
Maria’s tax credit extended to 2024	$3,500