US Senate Settles For $369 Billion Clean Energy Investment

• Senator Joe Manchin has agreed to support the Inflation Reduction Act of 2022 which approves $369 million investment in energy
• It will back the administration's efforts to bring down costs by investing in clean energy and deal with climate change
• Tax credits for residential and utility scale solar have been extended for 10 years, and incentives introduced for local manufacturing
• President Joe Biden has also come out with a slew of measures to bring down electricity costs with the use of solar energy

US President Joe Biden finally managed to bring around his namesake Senator Joe Manchin to agree to a $369 billion investment in Energy Security and Climate Change Programs by 2030, while also announcing measures to lower home electricity costs with solar.

West Virginia's Democrat Senator Manchin reached an agreement with Senate Majority Leader Chuck Schumer to support the Inflation Reduction Act of 2022 that is expected to bring down energy costs and lower inflation. Full legislative text available here.

Among provisions of the act, a 30% residential solar tax credit has been extended till 2033, to be reduced to 26% in 2034, and to 22% in 2035. Utility scale solar has also got a 30% credit for 10 years, with conditions apply.

To support manufacturing of clean energy equipment including solar panels, the act promises a $10 billion Investment Tax Credit (ITC), and an additional $30 billion for production tax credits to speed up domestic manufacturing. These measures, among others, will reduce carbon emissions by roughly 40% by 2030.

"The Inflation Reduction Act of 2022 addresses our nation's energy and climate crisis by adopting commonsense solutions through strategic and historic investments that allow us to decarbonize while ensuring American energy is affordable, reliable, clean and secure," stated Manchin. "The increased risk of geopolitical uncertainty demands that we turn our focus to increasing US energy production and bringing good paying energy and manufacturing jobs back to America.".

This turnaround from Manchin comes after he refused to back Biden's Reconciliation Bill 2022, prompting the latter to hint an executive action to get things moving (see US' Clean Energy & Climate Bill In Jeopardy).

The Biden administration also announced new measures to use solar energy to lower electricity costs and create clean energy jobs, while also encouraging energy efficiency measures. These include the following:

• 5 million families living in rental housing assisted by the Department of Housing and Urban Development (HUD) will be able to subscribe to local community solar. On an average, it can help them save 10% on their electricity bills annually.
• The Department of Energy (DOE) and the Department of Health and Human Services (HHS) have announced Community Solar Subscription Platform with the states of Colorado, Illinois, New Jersey, New Mexico, New York, and Washington DC signing up for the pilot. It is anticipated to help families here save over $1 billion annually in combined electric bill savings.
• $10 million funding from the DOE to support creation of 'hundreds of thousands' of solar jobs over the next decade, and that these are accessible to workers from all backgrounds, offering benefits.
• Sunny Awards for Equitable Community Solar from the DOE will recognize communities implementing best-in-class community solar programs and projects that lower costs.

"These announcements are bolstered by funding from President Biden's Bipartisan Infrastructure Law which will create good-paying jobs in one of the fastest growing sectors of our economy – clean energy," stated White House.

The Solar Energy Industries Association welcomed the government action on community solar, and recommends the administration to relax LMI eligibility requirements and streamline the community solar subscription to do away with 'burdensome and lengthy' sign up process.

The deal now needs to be cleared by Congress followed by Biden's signature to come into effect. Roth Capital analysts believe that the Senate may vote on the act as early as next week but note that this could be easily delayed, while at the same time, the House has to line up votes.