Two years and $26 billion: Biden-Harris Administration’s Inflation Reduction Act supercharges Michigan’s clean energy future

Any act can have far-reaching consequences. In the case of the Biden-Harris Administration’s Inflation Reduction Act (IRA), those consequences are helping to transform Michigan’s economic and clean energy future.

EGLE Director Phil Roos celebrates federal investments at a recent event with officials from the Biden-Harris Administration and Michigan’s congressional delegation. 

 

In fact, Michigan is No. 1 in the nation for winning IRA-funded projects, with more than $26 billion in new investments supporting more than 21,000 good-paying jobs. The state leads the Midwest in the number of clean energy workers: nearly 124,000 and growing as of October 2023, with clean energy jobs growing twice as fast as the state’s overall economy.

“Because of the IRA, Michigan is at the forefront of the clean energy revolution, driven by our strong manufacturing capabilities, innovative enterprises, and unprecedented federal support,” Governor Gretchen Whitmer said in a statement marking the act’s second anniversary. “These landmark federal resources are propelling our transition to electric fleets and clean energy; generating tens of thousands of well-paying, high-skill jobs; boosting advanced manufacturing across the state; and propelling our economy.”

President Joe Biden signed the IRA two years ago, Aug. 16, 2022. One of the largest economic investments in U.S. history – and the single largest investment in climate and clean energy – it includes more than 20 tax incentives for clean energy, electric vehicles, and clean manufacturing, along with dozens of programs for state, local, and tribal governments, nonprofit organizations, educational and training institutions, and businesses.

In response to passage of the IRA, Michigan aggressively mobilized to secure funding, particularly to implement the state’s landmark MI Healthy Climate Plan (MHCP). This mobilization included:

• Creating the Michigan Infrastructure Office, the state’s federal funding coordinating office.
• Signing executive directives to prepare state agencies for formula-funding opportunities.
• Creating and convening a dedicated subcabinet and working groups, including one role devoted exclusively to climate and energy-funding priorities.
• Securing $337 million for the Make it in Michigan Competitiveness Fund to provide enabling funds to unlock federally backed investments.
• Launching a technical assistance center and programs to help communities leverage federal funding opportunities by providing support, planning, and matching grants to connect locals, tribal governments, and other eligible entities with consulting services to help identify, apply for, manage, and administer federal grant funding.

Michigan uses the IRA to implement the MI Healthy Climate Plan

The MHCP, which Governor Whitmer released in 2022, outlines a pathway for Michigan to reach 100% carbon neutrality by 2050, with interim emissions reductions by 2030, to avert the worst impacts of the climate crisis; create good-paying jobs; and build a healthier and more prosperous, equitable, and sustainable Michigan for all Michiganders.

“In the two years since the passage of the IRA, Michigan has secured funds allowing us to put the MI Healthy Climate Plan into action," said Phil Roos, director of the Department of Environment, Great Lakes, and Energy (EGLE). “But it’s not only about climate. The IRA has made a real impact in the lives of Michiganders, saving them money on their electric bills, creating new economic opportunities and high-paying jobs, and enhancing their communities. By investing in clean energy and climate solutions, the Biden-Harris Administration has invested in our future – the future of our people, planet, and economy.”

To ensure equitable implementation of the MHCP with IRA funds, the state has focused on environmental justice (EJ), the equitable treatment and meaningful involvement of all people, regardless of race, color, national origin, ability, or income. Climate and EJ tools include:

For more information on climate and clean energy related federal funding opportunities, visit EGLE’s Office of Climate and Energy funding opportunities webpage.

The IRA has accelerated Michigan’s MHCP efforts in several areas:

Cleaning the electric grid

Michigan’s power sector makes up the largest proportion of Michigan’s total greenhouse gas (GHG) emissions. The MHCP set a goal of generating 60% of the state’s electricity from renewable resources by 2030, as well as limiting the consumer cost of powering and heating homes to not more than 6% of annual income for low-income households. The IRA has made achieving these bold goals possible, particularly with investments focused on removing barriers and financing deploying renewable energy resources like wind, solar, and storage at scale. Examples:

• $156 million from the EPA’s Solar for All program to help more than 18,000 low-income households save money on energy bills by supporting rooftop or community-serving solar projects.
• $129 million from the EPA’s Climate Pollution Reduction Program to accelerate the building and deployment of large-scale renewable energy such as wind, solar, and storage projects with new incentives, technical assistance, clean energy workforce support, and more.
• $1.9 million from the U.S. Department of Energy’s (DOE) Renewable Energy Siting through Technical Engagement and Planning program to launch the Michigan Renewable Energy Academy that will offer technical assistance and resources to communities to improve planning, siting, and permitting processes for large-scale renewable energy facilities.

Repairing and decarbonizing homes and businesses

Michigan buildings, mainly homes and businesses, account for almost 18% of the state’s total GHG emissions. The MHCP includes strategies for reducing emissions from heating Michigan homes and businesses by 17% while increasing investments in building repair and improvement to lower costs for working families and small businesses. The IRA makes significant investments to make Michigan homes more efficient, lowering energy costs for families:

• $105.5 million from the DOE’s Home Efficiency Rebates Program to lower costs of energy efficiency upgrades to single-family and multifamily homes. Families are eligible for up to $8,000 in rebates.
• $105.2 million from the DOE’s Home Electrification and Appliance Rebates Program to help finance the cost of efficient electric technologies and appliances, like heat pumps and efficient dryers, in single-family and multifamily homes. Families are eligible for up to $14,000 in rebates.
• Additionally, there are tax credits available to families, for home energy efficiency and clean energy improvements. To date, more than 117,300 Michigan households have claimed tax credits and incentives for clean energy and electric vehicles against their 2023 federal income taxes. Families can identify what clean energy incentives and tax credits are available to them on the Michigan Energy Efficient Upgrade Savings Calculator.

  Driving clean innovation in industry

  Michigan’s industrial sector accounts for roughly 15% of the state’s total GHG emissions. MHCP recommendations include encouraging clean innovation hubs, tripling Michigan’s recycling rate, and more. The IRA has not only moved the needle on industrial decarbonization but has spurred a statewide clean energy manufacturing boom, helping Michigan workers build decarbonization solutions:

• $500 million from the DOE to support upgrades to General Motors’ Lansing plant, allowing the company to produce electric vehicles and positioning the facility for the vehicles of the future, preserving and creating 700 jobs.
• $157.7 million from the DOE to modernize ZF North America’s Marysville plant, transitioning it to produce electric vehicle component parts and preserving 536 jobs.
• $50 million from the DOE to support Nel Hydrogen’s $400 million Metro Detroit facility, enhancing domestic electrolyzer manufacturing production capacity, advancing a clean hydrogen economy, and employing more than 500 people.

The IRA is creating opportunities to build clean energy projects and manufacture the equipment – hiring workers at good wages – needed to strengthen domestic supply chains, lower household energy costs, and fight climate pollution, in Michigan and across the country. For more information about investments to improve Michigan’s infrastructure, visit Michigan.gov/Whitmer/issues/Michigan-Infrastructure-Office.