Supplier to Strategist

Biden Infrastructure Plan: A Focus on Sustainability

Supplier to Strategist: A Blog Series on Sustainability, Efficiency and Technology
4 min read

One of the largest, most impactful and most discussed actions that President Joe Biden has introduced is a proposed more than $2 trillion infrastructure package for fiscal year 2022. This money would be allocated to a bill dubbed the American Jobs Plan, which includes traditional upgrades to roads and bridges, education, housing, waterways, broadband as well as extensive energy and grid enhancements, including updates to transmission lines.

The proposed bill is expected to prioritize sustainability resources for building and housing and tax incentives for energy efficiency programs, electrification and electric vehicles. There may also be an increase in renewable energy initiatives and credits, such as a ten-year extension on existing tax credits for wind and solar projects.

In this blog, we talk through some of the proposals to learn what resources and funds could be available through this legislation and how your organization could take advantage of those prospective policies.

Sustainable Buildings – The Moving Forward Act

A portion of the bill is expected go toward sustainable buildings, particularly in low-income housing areas, with initiatives to:

  • Expand the low-income housing tax credit
  • Create a new Neighborhood Investment Tax Credit to subsidize development costs to encourage the rehabilitation of vacant homes or construction of more than 500,000 homes for low and middle-income homebuyers
  • Increase the Historic Tax Credit program for all projects, expanding credit for small projects and eliminating rules that prevent access for non-profits, including public schools.
  • Invest $300 billion in fixing existing infrastructure, including bridges, and $100 billion into broadband investments.

Constellation analysts anticipate that there will be a package passed in 2021 for infrastructure and sustainable buildings; this package may fall somewhere between the proposed American Jobs Plan and the counteroffer being sent by the Republican party.

Energy Efficiency and Emissions Proposals

In addition to the Moving Forward Act, the bill includes the CLEAN Future Act and Leading Infrastructure For Tomorrow’s America Act, or the LIFT Act, which focus on several efficiency and emissions reduction goals, such as:

  • Energy efficiency grants for home and public buildings, including faster distribution of weatherization assistance funds from the Department of Energy (DOE)
  • Significant increases in energy efficiency and conservation block grants to states and the creation of a Clean Cities Coalition Program to have cities work together on greenhouse gas emission reduction programs
  • The acts also have increased rural and remote community electrification grants, including increased eligibility to areas impacted by the closure of a coal generating unit, and
  • Increased grant funding authorization to $50 million.

Currently, it may be difficult for the federal legislation to pass, as such standards have difficulty complying with the Byrd Rule as they are policy changes that are extraneous to the budget and may not be included in reconciliation. The House Committee on Energy and Commerce is expected to continue to push these items and attempt to adapt the proposal to be more budget focused. However, it may still face issues in the Senate as Republicans are not likely to vote for requirements impacting individual states.

Electrification and Electric Vehicles

The plan includes a significant $174 billion in investment for electric vehicles (EV) and the conversion of government vehicles to rapidly adopt electrification. The EV plan includes:

  • An increase on the cap of the number of qualified plug-in electric drive motor vehicles that qualify for tax credits
  • Grant and incentive programs for the installation of 500,000 EV chargers by 2030
  • $2 billion for state transit to move to electrification projects, and
  • $2.5 billion for a clean school bus program and $96 million for grants to ensure access to EVs in underserved communities.

Effects on Energy Sources

Finally, the act includes substantial impact to energy sources through significant investments in renewable energies under the Moving Forward, CLEAN and LIFT acts, and heavier regulation and restrictions of the coal, oil and gas sectors. Billion-dollar grants would be awarded to state and local communities for renewable energy modernization, tax incentives for renewable energy technologies, technologies that reduce carbon emissions and energy storage.

Further stimulating the sustainability movement is the potential for enhanced regulations by the Environmental Protection Agency, the Department of Interior or even the Securities and Exchange Commission. Both U.S. Special Presidential Envoy for Climate John Kerry and U.S. Secretary of Energy Jennifer Granholm have stated they can meet climate targets without action from Congress. The logical extension of this is more federal rulemaking and enforcement action at the agency level. However, this legislation may be difficult to pass as Republicans do not want more power in agencies’ hands.

Regardless of the legislation’s passing, companies are already taking the initiative to create their own sustainability goals

Regardless of the legislation’s passing, companies are already taking the initiative to create their own sustainability goals. Therefore, we can expect to see accelerated demand for wind and solar farms and other renewable energy sources to be installed and utilized on commercial and residential properties. Visit us at www.constellation.com/SET to ensure you are taking the right steps to execute your sustainability plan to achieve your carbon reduction goals.

Stay apprised on the latest in governmental affairs, both nationally and regionally, by subscribing to our regular communications, such as the weekly eMarket Update or the monthly Market Intel Webinar by visiting www.constellation.com/subscribe. You can also follow us on LinkedIn and Twitter for updates.

*This blog post is a part of our “Supplier to Strategist: A Blog Series on Sustainability, Efficiency and Technology” where we will provide the framework for customers on how to develop and achieve their long-term sustainability strategy and goals, and understand the innovative management products and solutions that can make a direct impact on their bottom line.

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