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From NRDC
College campuses have always been hubs of climate activism, with students joining nationwide movements to protest pipelines like DAPL and Line 3 and to divest from the fossil fuel industry, among other causes. At the same time, students increasingly factor in a school’s own environmental values as they decide where to apply.
And as many universities begin to take a closer look at their climate footprints, the Inflation Reduction Act (IRA) offers a new opportunity to tackle decarbonization projects on campus. This is the chance to swap out any inefficient or outdated infrastructure that feeds into energy-sucking buildings, like dorms and research labs, to not only reduce carbon emissions but also to help cut power costs. By making these green investments, colleges are also showing prospective students their seriousness in shaping the next generation of climate leaders.
What kind of clean energy projects qualify?
About a dozen tax provisions are eligible for direct pay. Many colleges and universities will be eager to take advantage of the ones for electric vehicles and clean energy generation. These credits can be applied to a wide range of renewable energy projects, from solar, wind, and geothermal energy development to electric vehicle infrastructure.
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Investment Tax Credit for Energy Property (ITC): Colleges can use the ITC if they are looking to install new clean energy projects on campus. After December 31, 2024, the Clean Electricity Investment Tax Credit will replace the ITC. While the ITC covers an extensive list of technologies, the more flexible tech-neutral replacement will help colleges pay for any power facilities that achieve net zero greenhouse gas emissions. In other words, beyond solarized roofs and wind turbines, it will also apply to things like large-scale battery systems and other emerging technologies.
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Production Tax Credit for Electricity from Renewables (PTC): While the ITC is based on the construction costs for a project, the PTC provision is based on how much clean energy a project generates. This credit can be claimed for the first 10 years a project operates and applies to initiatives to generate renewable energy, similar to those covered by the ITC.
At the end of 2024, the PTC will be replaced by the Clean Electricity Production Tax Credit, which will also more broadly cover any power facilities that achieve net zero greenhouse gas emissions. (Generally, you cannot claim the ITC and PTC for the same project, so it will be up to the organization to figure out which credit will be more worthwhile.)
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Clean vehicle tax credits: Colleges can also tap into a set of two clean vehicle credits if, for example, they want to replace their fleet of gas-powered shuttle vans with electric versions. The Alternative Fuel Vehicle Refueling Property Credit can also be used to install charging stations in qualifying areas (which cover about two-thirds of the United States).
