How new federal incentives can help drive your energy transition
The Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) represent historic levels of funding and policy incentives designed to reshape America’s economy and spur the acceleration of the clean energy transition. Combined, the two bills allocate over half a trillion dollars in tax incentives, grants, advanced R&D and a myriad of programs designed to develop and deploy clean energy technology, domestic energy supply chains, clean transportation, energy efficiency measures, climate mitigation and more. Building the energy system of tomorrow while combatting the rapidly intensifying consequences of climate change will be no small task—but then again, passing such significant legislation in an era of American politics often viewed through the lens of hyper-partisanship was no small feat, either.
Unfortunately, there is little time for our elected leaders, government agencies and companies across industries tasked with building America’s clean energy future to rest on their laurels. The hard work of turning these policies into action is just beginning. These landmark federal investments are intended to leverage the power and ingenuity of the private sector and represent important opportunities for companies across industries to grow their business while contributing to the clean energy transition. To maximize these incentives, the ability of a company to effectively articulate their clean energy story will be just as important as their business operations plan.
Articulate Your Energy Story
Right now, the Biden administration is moving quickly to write the programmatic rules that will turn the legislative text from Congress into actionable programs and funding streams to get the money out the door and into the economy. This is a pivotal time for companies to strategically engage and communicate with the Administration to share their perspectives on how these funds and programs can best be deployed to have the most impact. In addition to formal public comment periods for new rules and programs, the administration will also host business and community roundtables in the coming months to solicit feedback on a range of clean energy initiatives.
Congress will remain an important stakeholder throughout the annual appropriations process and oversight of program implementation. While the legislative process surrounding the IIJA and IRA was often fraught with partisan debates, many of the individual programs have bipartisan support. Now that these policies are “on the books” and money is ready to flow, most Members of Congress—regardless of party—will be eager to advocate for investments in their home states and districts, if they haven’t already. As such, companies would be wise to develop a focused and compelling communications plan to educate policy makers on their clean energy investments, activities and goals while engaging them as advocates of and allies for the positive energy developments in their communities.
Challenges & Opportunities
With this context in mind, it is imperative that business leaders take a step back and notice both the challenge and the opportunity in front of them. The global energy transition from fossil fuels to cleaner generation sources like wind, solar and nuclear power is extremely disruptive, and it is happening now. The pace of the transition will only increase in its speed and intensity in the coming years. We have already experienced the impact of short-term energy cost increases and a volatile global energy market influenced by massive geopolitical upheavals. We have become aware of the intense pressure to transition workforces and job skills from fossil fuels to industries and roles that fit within a cleaner energy economy, causing economic uncertainty in fossil fuel communities around the country and the globe. When we consider that energy touches every aspect of our lives, it becomes clear that the ripple effects of the global energy transition will present unforeseen challenges for which we’re likely not yet prepared.
More plainly, the “electrification of everything” has made every business an energy business. Leaders of these businesses are required to tell a clear, compelling story on energy consumption and communicate the role they will play in the global energy transition. Leveraging annual sustainability reports and industry publications is a good place to start, but companies should strive to explore different mediums and messages via interactive websites, sustainability events featuring a diverse range of credible voices and experiential learning opportunities.
Turning Stories into Action
Of course, those communications are predicated on companies taking substantive action to meaningfully contribute to the energy transition. Consistency, transparency and accountability must be at the core of companies’ clean energy communication strategies. From socially conscious consumers to activist investors to increasingly influential community and environmental NGOs, the range of stakeholders which companies must engage has never been more diverse, vocal and pervasive than it is today.
The necessity for companies to communicate their perspective on the global energy transition presents a challenge, but more importantly, it presents an opportunity to better tell the company’s story and make an impact on key audiences. It is no exaggeration to say that the success of the historic climate and energy legislation which the IIJA and IRA represents depends on the strength of a collective commitment to meaningful action and consistent storytelling by business leaders who touch every aspect of our economy.
Decades from now, tomorrow’s leaders will look back at the passage of the IIJA and IRA as one of two things: a catalyst for substantive change in the fight to save our planet and secure the globe’s clean energy future, or a lost opportunity which future generations will rue as the one that got away. What will your story be?