The Inflation Reduction Act (IRA) of 2022 brings significant financial incentives to rural communities, aiming to promote renewable energy production and the transition to sustainable energy sources.
Under the bill, approximately $11 billion has been allocated for rural electric cooperatives, renewable energy loans, biofuel infrastructure, and the Rural Energy for America Program (REAP). These funds will be available until the end of fiscal year 2031, providing ample opportunity for growth and development.
Jonathan Coppess, director of the University of Illinois ag policy program, highlighted the importance of the REAP program and the additional funding, stating that they assist agricultural producers and rural small businesses in becoming more energy efficient and adopting renewable energy technologies.
The IRA designates up to $2 billion for REAP, including $303 million specifically for underutilized technologies and technical assistance. The U.S. Department of Agriculture expects these funds to support renewable energy and energy-efficiency projects for over 41,500 farms and small businesses.
Biofuels infrastructure is also a focus of the legislation, with up to $500 million allocated for grants. These grants aim to improve infrastructure for blending, storing, and distributing biofuels, offering consumers more fueling options. The grants can cover up to 75% of the cost, encouraging the sale and use of agricultural commodity-based fuels.
Additionally, the IRA extends biodiesel, alternative fuel, and second-generation biofuel tax credits until the end of 2024. This includes a $1-per-gallon biodiesel tax credit for pure biodiesel producers or blenders and a $1-per-gallon renewable diesel tax credit for biomass-based diesel or diesel/renewable diesel blends.
Rural electric cooperatives will also benefit from the IRA, as it provides significant funding opportunities for affordable and reliable clean energy systems. The Empowering Rural America ("New ERA") program offers $9.7 billion to eligible rural electric cooperatives for deploying renewable energy systems and zero-emission/carbon capture systems.
The Powering Affordable Clean Energy (PACE) program offers $1 billion in partially forgivable loans to renewable energy developers and electric service providers. These loans will support large-scale solar, wind, geothermal, biomass, hydropower projects, and energy storage.
With these financial incentives and support, the IRA seeks to drive the growth of renewable energy and biofuels infrastructure while fostering sustainable practices in rural communities.
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Categories: Iowa, Business, Energy, Rural Lifestyle