Almost a hundred years after their creation, rural electric co-operatives (rural co-ops) continue to supply electricity to more than 40 million people across the United States, including historically underserved communities. Rural co-ops are still disproportionately powered by coal and fossil gas—dirty energy sources whose volatile prices and harmful pollution hit consumers hard, especially when weighed against cheap, clean, and reliable renewable energy alternatives.
To address the challenges of the 21st century, the Inflation Reduction Act (IRA) is providing rural co-ops with a once-in-a-generation funding opportunity to drive a transition to clean energy. A full suite of financing opportunities to quickly raise equity for renewable energy projects and refinance stranded assets, like coal plants, are available to rural co-ops starting this summer, in 2023.
This paper outlines five major IRA funding opportunities, many of which can be “stacked” to create a mega-discount:
- The Empowering Rural America (New ERA) program, which offers rural co-ops competitive grants and loans to transition to clean, affordable, and reliable energy
- The Powering Affordable Clean Energy (PACE) program, which offers partially-forgivable loans for renewable energy projects and renewable energy storage
- Direct pay clean energy tax credits that subsidize the investment in and operation of new clean power sources
- Clean energy tax credit bonus adders that incentivize reaching higher benchmarks for domestic supply chains, building a clean energy workforce, and more
- The Energy Infrastructure Reinvestment (EIR) program, which provides guaranteed loans to help replace fossil fuel energy infrastructure, and the Greenhouse Gas Reduction Grants that fund the development of plans to reduce climate pollution
There is a future beyond reliance on expensive, polluting industries, where rural communities can design and own a clean energy future. Read how rural co-ops can seize this historic funding opportunity to deliver cleaner, cheaper, and more reliable electricity to their member-owners and power the next generation of rural America.