It helps U.S consumers buy electric vehicle chargers, rooftop solar panels, and fuel-efficient heat pumps. It extends energy-industry tax credits for wind, solar and other renewable energy sources — and for carbon capture technology. In fact, most of its impact is accomplished through tax credits, reports the New York Times, “viewed as one of the least expensive ways to reduce carbon emissions.
“The benefits are worth four times their cost, according to calculations by the Energy Policy Institute at the University of Chicago.” One example is ending an eligibility cap on the $7,500 tax credit for consumers buying electric vehicles:
Currently, the credits are phased out after a manufacturer has sold 200,000 electric or plug-in hybrid vehicles. Restoring the credits would be huge for Tesla and General Motors, which have used up their quotas, as well as companies like Ford Motor and Toyota that will soon lose access to the credits. The new tax credit, available through 2032, would make vehicles from those companies more affordable and address criticism that only rich people can afford electric cars…
As it exists, the 200,000-vehicle cap on tax credits would provide a competitive advantage to market newcomers like BYD of China that are expected to use electric vehicles to enter the U.S. market. They could have benefited from the credit while Tesla, the Texas-based company, could not. The Democratic climate legislation would flip that. As written, the bill appears to disqualify cars not made in North America from the credit. Cars made in North America by foreign companies like Mercedes-Benz, Toyota or Volvo would qualify, but imported models would not.
In fact, the 725-page legislation also includes “a strong dose of industrial policy,” with several provisions that “appear designed to undermine China’s hold over the electric vehicle supply chain… It favors companies that get their components and raw materials from the United States or its allies, while effectively excluding China.”
“I think it is absolutely a transformative bill,” said Leah Stokes, an associate professor of political science at the University of California, Santa Barbara, who specializes in energy and climate change…
Cars would qualify for the full credit only if their batteries were made with materials and components from the United States and countries with which it has trade agreements. The percentage of components that have to meet those restrictions to qualify for the credit would increase over time, under the bill. That provision is aimed at encouraging domestic development of businesses like lithium mining and refining.
Read more of this story at Slashdot.