Full Title: IRA Clean Energy Credits with Labor Standards Can Boost Union Jobs and Economy in Appalachia
Author(s): Ted Boettner
Publisher(s): Ohio River Valley Institute
Publication Date: September 1, 2024
Full Text: Download Resource
Description (excerpt):
The Inflation Reduction Act (IRA) is the largest federal policy action to date to combat climate change and reorient our economy toward cleaner energy. One of the IRA’s largest impacts is on clean electricity investments and production through expansions of the generation-based Production Tax Credit (PTC) and the capital-based Investment Tax Credit (ITC). The PTC and ITC account for more than one quarter of the IRA’s estimated $900 billion in anticipated expenditures by 2031.
Included in the PTC and ITC, along with ten other tax incentives in the IRA, are targeted labor and workforce development standards. These standards include primarily prevailing wage and registered apprenticeship targets that increase the value of the PTC and ITC five-fold, with the aim of improving job quality and workforce training pathways in clean energy production, which traditionally has lower job quality and less union density than fossil fuel energy production.
According to the US Department of Labor, there are 76 IRA-powered clean energy power projects in Kentucky, Ohio, Pennsylvania, and West Virginia, including 57 in the pre-construction phase of development. The 57 clean energy projects in the four-state region include 33 solar, 20 hydroelectric, two wind, and two battery storage projects. Approximately 32 of these pre-construction clean energy projects are in “energy communities” that have been reliant on fossil fuels and are consequently eligible for a bonus ITC or PTC credit.