tax credits

Distributed Wind Energy | Earth Wise

March 17, 2023 By EarthWise 1 Comment

When we think about wind power, we are usually talking about increasingly giant windfarms – either on land or offshore – that produce power on a utility scale. But there is also distributed wind energy, which refers to wind technologies in locations that directly support individuals, communities, and businesses.

Distributed wind can be so-called behind-the-meter applications that directly offset retail electricity usage much as rooftop solar installations do. It can also be front-of-the-meter applications where the wind turbines are connected to the electricity distribution system and supplies energy on a community scale. Distributed wind installations can range from a several-hundred-watt little turbine that powers telecommunications equipment to a 10-megawatt community-scale energy facility. As of 2020, there were nearly 90,000 distributed wind turbines in the U.S. with a total capacity of about 1 GW.

A study by the National Renewable Energy Laboratory has estimated the potential for distributed wind energy in the U.S. According to the new analysis, the country has the ability to profitably provide nearly 1,400 GW of distributed wind energy capacity.

Entire regions of the country have abundant potential. The regions with the best economic prospects have a combination of high-quality wind, relatively high electricity rates, and good siting availability. Overall, the Midwest and Heartland regions had the highest potential especially within agricultural land.

Realizing this outcome for distributed wind will require improved financing and performance to lower costs, relaxation of siting requirement to open up more land for wind development, and continued investment tax credits and the use of net metering.

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U.S. has potential for 1,400 GW distributed wind energy, NREL finds

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Earth Wise is a production of WAMC Northeast Public Radio

Driving Electric Is Cheaper For Almost Everyone | Earth Wise

February 24, 2023 By EarthWise Leave a Comment

A study by University of Michigan researchers found that about 90% of U.S. households would save money on fuel costs by owning an electric car rather than a gas-powered car. So apart from the environmental benefits of electric cars, there are real economic benefits as well.

Both the price of gasoline and the price of electricity vary considerably across the country, so there are differences by location. The study found that 71% of U.S. drivers would see their fuel expenses cut at least in half by driving an electric car.

Drivers in California, Washington, and New York would see the largest fuel savings as well as the biggest emissions reductions from a new electric car. Those states have cleaner electric grids and a bigger gap between the cost of electricity and the cost of gas.

The study, published in the journal Environmental Research Letters, only looked at fuel costs and did not take into account the purchase cost of new cars. Generally speaking, plug-in cars have higher sticker prices than gas-powered cars but multiple studies have shown that over their lifetimes, electric vehicles end up being cheaper to own than comparable gas-powered vehicles because of lower maintenance costs on top of the fuel savings. The price gap between equivalent gas and electric cars continues to narrow in any case as the cost of batteries continues to decline. On top of that, the recent expansion of federal tax credits on electric cars is making the vehicles cost-competitive right at the point of purchase.

Gasoline prices have come down considerably from their peak a year ago, but for almost everyone, it is still much cheaper to drive on electricity.

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Seven in 10 U.S. Drivers Could Halve Their Fuel Costs by Going Electric, Study Finds

Photo, posted April 23, 2022, courtesy of Pedrik via Flickr.

Earth Wise is a production of WAMC Northeast Public Radio

Electric Vehicle Tax Credits | Earth Wise

February 17, 2023 By EarthWise Leave a Comment

As of January 1, many Americans can qualify for a tax credit of up to $7,500 for buying an electric vehicle. The credit is one of the changes enacted under last year’s Inflation Reduction Act. The purpose is to encourage EV sales and thereby reduce greenhouse gas emissions and air pollution.

There has been a tax credit for EVs for more than a decade, but its provisions made cars from any manufacturer ineligible as soon as that manufacturer had sold more than 200,000 cars. Notably, this eliminated the credit for purchasing cars from Tesla and General Motors. Given that electric cars are now selling in the millions, the 200,000-unit cap on the tax credit essentially made it useless as a real force to grow the industry.

The new tax credit has a somewhat complex set of requirements for determining the applicability and amount of the credit. There are price limits on eligible vehicles depending on vehicle type and there are requirements on where vehicles are manufactured, where batteries are manufactured, and where other components are made. The intent is to encourage American manufacturing of the cars and trucks to the greatest extent. There are also income limitations on buyers who want to take advantage of the credit, but those are quite large. The Department of the Treasury has online detailed information about the requirements for the credit and, of course, EV manufacturers can provide the specifics for their own vehicles.

For their part, automakers are adjusting prices, building domestic manufacturing plants and battery factories, and otherwise trying to position themselves for their customers to take advantage of the credit.

The new law also provides a smaller tax credit for the purchase of used electric vehicles.

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Electric vehicle tax credits explained: What’s new in 2023?

Treasury Releases Additional Information on Clean Vehicle Provisions of Inflation Reduction Act

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Earth Wise is a production of WAMC Northeast Public Radio

Electrifying Delivery Vehicles | Earth Wise

October 12, 2022 By EarthWise Leave a Comment

Most of the buzz about electric vehicles relates to passenger cars as the auto industry is making a major transition away from gasoline power. Recently, pickup trucks have started to get some attention as well as Ford’s electric version of the F-150 truck has hit the streets and the long-awaited Tesla Cybertruck will be introduced next year. There hasn’t been as much talk about delivery vehicles, but there should be.

There are about 15 million delivery vehicles in the U.S., and they are a significant contributor to greenhouse gas emissions. The post office alone has a quarter million of them. Such vehicles are especially attractive candidates for electrification. Most travel relatively consistent and short routes, which makes it easier for companies to be able to charge them and keep them charged.

Electrifying delivery vehicles in cities is especially important because the vehicles travel into and through residential neighborhoods, spreading pollution and particulates as they go.

Some provisions of the Inflation Reduction Act provide credits for the purchase of commercial vehicles. Light-duty vans and trucks qualify for a credit of as much as $7,500. Medium- and heavy-duty trucks qualify for credits as high as $40,000. In addition, substantial tax credits are available for the installation of charging equipment.

According to a study by the Rocky Mountain Institute, sixty percent of new truck sales could be electric by 2030. By 2035, the trucking industry could cut its emissions in half.

American companies are already stepping up to the plate. Amazon plans to deploy 100,000 electric delivery vehicles from new automaker Rivian. Walmart, UPS, FedEx, and others have also committed to electrified trucks.

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The Climate Bill Will Electrify More Delivery Vans and Trucks

Photo, posted August 1, 2021, courtesy of Ivan Radic via Flickr.

Earth Wise is a production of WAMC Northeast Public Radio

A Law To Tackle Climate Change | Earth Wise

September 8, 2022 By EarthWise Leave a Comment

The Inflation Reduction Act signed into law in mid-August is the most comprehensive U.S. legislation addressing climate change ever enacted. It contains $369 billion in funding for clean energy and electric vehicle tax breaks, domestic manufacturing of batteries and solar panels, and pollution reduction.

The legislation for the most part makes use of carrots rather than sticks to coax American consumers and industry away from reliance on fossil fuels. Rather than establishing more carbon taxes, mandates, and penalties, the law largely makes use of tax credits to provide incentives for the use of clean energy.

The law provides a large mix of tax breaks intended to bring down the costs of solar, wind, batteries, electric cars, heat pumps, and other clean technology. For example, consumers will get a $7,500 credit for purchasing many new electric car models and about $4,000 for buying a used vehicle.

On the stick side of the ledger, oil and gas companies that emit methane above certain threshold levels will incur fees that escalate over time. The law also increases the cost to the oil industry for extracting fossil fuels from public lands.

The act provides $60 billion for overall environmental justice priorities, including $15 billion targeted specifically for low-income and disadvantaged communities. There are many other provisions in the law addressing multiple climate-related issues.

According to three separate analyses by economic modelers, the investments from the Inflation Reduction Act are likely to cut pollution by about 40% below 2005 levels by the year 2030.

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The US finally has a law to tackle climate change

Photo, posted December 15, 2021, courtesy of Mario Duran-Ortiz via Flickr.

Earth Wise is a production of WAMC Northeast Public Radio.