A tax break on clean energy projects is coming to coal and oil towns

Read the full story at Grist.

Community advocates in the coalfields of central Appalachia and other places dependent upon fossil fuel production have long insisted that their towns cannot be left behind by the nation’s switch to renewable energy. The Biden administration has responded to such calls by working to ensure under-resourced communities benefit from this green transition. 

To help achieve that, the Inflation Reduction Act includes a 30 percent tax break for windsolar, and other green energy projects. It provides an additional 10 percent credit for projects in “energy communities” — those long anchored, and polluted, by fossil fuel industries. The tax break is intended for energy developers and manufacturers that might relocate to a community, employ local people, and contribute taxes to the local government.

Last week, the Treasury Department outlined how clean energy companies can secure those credits. For a project to qualify, at least 0.17 percent of the targeted community’s employment or 25 percent of its tax revenue must be related to the extraction, processing, transport, or storage of coal, oil, or natural gas. 

Although the program will help cities and towns nationwide, the need is particularly acute in Appalachia, where coal industry jobs fell 54 percent between 2005 and 2020, according to a report by the Appalachian Regional Commission. Along with its guidelines, the Treasury Department released a map indicating in red which U.S. counties might be eligible for these projects. The coalfields of central Appalachia, particularly West Virginia and portions of Virginia and Kentucky, are almost solidly red.  

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