Guest columnist Sara Ross: Federal dollars are coming to towns

  • A geothermal heat pump system is shown in the basement of Crotty Hall, the net-zero-energy home of the economics department at UMass Amherst, in March 2017. gazette file photo

Thursday, September 22, 2022

The new Inflation Reduction Act signed into law in August is a game-changer that has not yet made its way on the long journey from President Joe Biden’s pen to our towns. But it is coming and the message is clear — municipalities need to prepare to take down these resources.

Towns and cities can do that by having robust decarbonization plans ready, adequate staff to apply for the new resources, “shovel-ready” projects that take advantage of low-carbon solutions, and staff to manage them.

This new law has the potential to provide financial support for a wide array of infrastructure projects and in several forms. Here is just one example.

The act has a new provision that provides 30% of the project costs for both solar and geothermal investments through a new direct cash payment for non-taxable entities including municipalities. Given that geothermal and solar are both large ticket items, this 30%-off coupon (and we may qualify for an additional 10% if we use domestically-sourced material) will translate into millions in support from the federal government.

Let’s apply this to the elementary school project underway in Amherst. When I last checked, the estimated price tag on the geothermal system, which will provide clean heating and cooling, was $12.1 million. With the new Inflation Reduction Act, it is my understanding that this investment will qualify for a 30% direct incentive from the federal government netting Amherst $3.6 million in financial support that it did not expect to receive. This is on top of newly enriched utility incentives for $1.6 million.

In other words, changes in government support in just the last month have unearthed $5.2 million of funding from our utility and federal partners for just one $12.1 million piece of our overall infrastructure puzzle. This is massive.

With the same 30% off coupon available for solar, our municipal buildings have an opportunity to lead the way to a zero-carbon future. We can pair investments in solar and geothermal so that our buildings can make their own clean energy and then use it to keep buildings comfortable — with no on-site combustion and no carbon emissions.

Even with this new financial support from government, these are still substantial investments for communities. But with the price of natural gas on the rise, and increasing bouts of extreme heat making air-conditioned public buildings a necessity not a luxury, do we really think we understand the cost of business-as-usual? All indications are that this moment calls for rapid transformation not hedged half-measures.

We have entered a new era in which government, including our federal government, is in the process of mobilizing massive resources toward climate-smart infrastructure. Design teams, contractors, and project managers across the country are just starting to understand what the Inflation Reduction Act will mean for their projects.

This change will take some time to filter its way into our specific project budgets such as the currently imperiled Jones Library project. But it will happen. Our job is to keep moving forward.

Sara Ross lives in Amherst.