PrintWe could probably devote an entire lesson to all the energy-related grants and incentives available to citizens and companies. Instead, let's pick just a few examples and work through how this type of energy policy is implemented.
While the American Recovery and Reinvestment Act of 2009 is by no means a 'typical' piece of legislation, let's take a look at it, specifically, because it called out several types of energy-related grant and incentive opportunities.
When ARRA passed, so too did all of the provisions built into it to drive clean energy development and stimulate new job growth in the energy sector. As a taxpayer and informed citizen, it's important for you to understand where your tax dollars are going and what sorts of activities they fund. With ARRA, energy funding reaches across the spectrum from installation and adoption of smart grid technologies to improved efficiency to innovative research into carbon capture. I encourage you to check out DOE's ARRA website to learn more about how the stimulus package benefited clean energy. Briefly, here's a general list of the types of activities funded through grants and incentives in this important piece of energy policy.
- Modernizing the Electric Grid - $4.5 billion
- Energy Efficiency - $12 billion
- Renewable Energy - $1.64 billion
- Carbon Capture and Storage - $3.4 billion
- Transportation - $2.85 billion
- Science and Innovation - $2.0 billion (including about $40 million in loan guarantees)
- Environmental Cleanup - $6 billion
ARRA was a rather high-visibility piece of legislation, given the tremendous investment of taxpayer dollars. In addition to ARRA, there are many, many other opportunities available to citizens and organizations, and DSIRE is a very comprehensive repository of these programs. While the site is devoted primarily to state-level incentives, it also offers links to federal programs.
The Inflation Reduction Act provides a bevy of incentives and some loan guarantees.
It is important to recognize the difference between subsidies and incentives. Incentives are intended to influence behavior and encourage some action to be taken by “sweetening to deal,” so to speak. A subsidy, on the other hand, is funding to make an action affordable enough to be taken. Put simply, I could do something without any incentive, but having the incentive would make it more attractive. If something needs to be subsidized, it means I cannot do it without the subsidy and still be financially prudent.