The Inflation Reduction Act – State Energy Offices

The Inflation Reduction Act of 2022 (IRA)^[1] is a landmark United States federal law that aims to curb inflation by reducing the budget deficit and investing in domestic energy production while promoting clean energy. The IRA covers new and reinstated tax laws that will affect individuals and businesses, including credits and deductions for clean vehicles, renewable energy, energy efficiency, and carbon capture. The IRA also provides billions of dollars to fund various programs and initiatives related to the clean energy transition, such as grid modernization, electric vehicle charging infrastructure, clean energy research and development, environmental justice, and climate resilience.

One of the questions that arise from this legislation is: what is the role of state energy offices (SEOS)^[2]in the implementation of the IRA? SEOS are agencies or divisions within state governments that are responsible for developing and implementing state energy policies and programs. They often work with federal agencies, local governments, utilities, businesses, nonprofits, and other stakeholders to advance state energy goals and priorities. SEOS plays a role in facilitating the clean energy transition by providing technical assistance, financial incentives, education and outreach, policy analysis, planning, and coordination. These offices will play an important role in ensuring that funds are used effectively to drive energy efficiency and renewable energy initiatives in their states.

With the passage of the IRA, SEOS have an opportunity to leverage this federal funding and support their state’s clean energy efforts. SEOS can do this by applying for grants or loans from federal programs authorized or expanded by the IRA. For example:

• The State Energy Program (SEP)^[3] received an additional $3 billion over five years to assist in the implementation of clean energy plans.

• The Weatherization Assistance Program (WAP)^[4] received an additional $6 billion over five years to help low-income households improve their home energy efficiency.

• The Clean Energy Challenge Grants program was funded with $8 billion over eight years to reward states that achieve high levels of clean electricity standards.

• The IRA authorized $7.5 billion over five years for electric vehicle charging infrastructure deployment across different levels of government.

• The IRA increased funding for existing programs such as Low-Income Home Energy Assistance Program (LIHEAP)^[5], State Energy Conservation Plans (SECP)^[6], and Rural Energy Savings Program (RESP)^[7].

Another avenue for accessing federal support is to partner with federal agencies or national laboratories to access technical expertise or resources. For example, the Environmental Protection Agency created a new Clean Energy Accelerator with $27 billion over ten years to provide low-cost financing for clean energy projects through state green banks or other entities.

Finally, the key benefit of SEOS is its ability to work closely with local communities to identify the most important energy needs of the state. These offices understand the energy landscape in their state and can work with local stakeholders to design programs that address the needs of their communities. This local approach helps ensure that funds are used effectively and that they have a lasting impact on energy use and prices. SEOS is also well-equipped to manage the complex reporting and compliance requirements associated with the Inflation Reduction Act. This includes tracking energy savings and ensuring that funds are used in accordance with federal guidelines.

SEOS will play a critical role in promoting energy efficiency and renewable energy initiatives of the IRA across their state. ANB Systems offers a suite of low code/no code software solutions that simplify and streamline complex workflows. As SEOS across the United States begins to roll out its programs, solutions like ANB’s eTRACK+ will be needed to manage the complex customer qualification process, energy savings calculations, and reporting requirements of the IRA.