Despite federal pushback to renewable energy infrastructure — including pauses to Inflation Reduction Act funds — local leaders and experts are hoping state support and strong industry momentum will buffer the region against any substantial drops in clean energy consumption.
Peninsula Clean Energy, the county’s public electricity provider, relies on customers using rebates — whether they are funded locally or at the state or federal level — to purchase costly appliances and systems, like water heaters and heating, ventilation and air conditioning systems, which can cost more than $10,000 altogether without additional financial help. While PCE self-funds much of its local rebate programs, Director of Energy Programs Rafael Reyes said there is some uncertainty over the future impact of some programs dispersed at the state level, including the High-Efficiency Electric Home Rebate Act, an IRA-funded program that offers assistance on home electrification for low- to moderate-income households. The Department of Energy has allocated $290 million in HEEHRA funds to California, which are dispersed through the state’s TECH Clean program.
“[PCE is] not directly impacted by the federal change or pause in funding with the IRA. That said, there is the potential that certain other rebate programs could be impacted,” Reyes said. “One round of [HEEHRA] funding is already in the process of being dispersed to customers through rebates, and so far we have not heard of any impact to those funds.”
In January, President Donald Trump signed an executive order, titled Unleashing American Energy, that, in part, paused some IRA funds, largely focused on grant and loan programs. While the first round of funds are in the process of being dispersed, it remains to be seen whether the second round of HEEHRA funds, which would be about $152 million, will be affected.
The IRA was passed in 2022 and provided billions of dollars to support carbon emission reduction efforts and infrastructure, for both organizations and individuals. The electric vehicle tax credit was one of the most popular provisions for individuals, and states and organizations have also used credits and other financing mechanisms to bolster EV manufacturing and incentivize renewable energy infrastructure. California has received billions of dollars in IRA funds, including $1.6 billion in tax breaks alone in 2023.
PCE is also working with local governments in San Mateo County to install solar systems in their facilities, which would be partially financed through a direct-pay investment credit, an IRA provision.
“It remains to be seen whether direct pay will be in any way impacted by the executive orders,” Reyes added.
Davina Hurt, chair of the Bay Area Air Quality Management District, said she is also concerned about how potential IRA funding cuts could stifle progress made by the district and other regional entities.
“There have been historical levels of financial incentives available from the federal and state government that now have a question mark as to how who will be able to continue receiving any of those incentives, from as small as farmers to the everyday person with some of their appliance overhauls,” she said.
Over 1,500 customers used PCE-specific rebates last year, though that does not include the number of county residents who also used state-level programs such as the HEEHRA rebates. In addition to financial support for electrical appliances, the county’s Sustainability Department received a $330,000 IRA-supported energy efficiency grant, although the funds have not been disbursed. Some cities throughout the county have also received IRA funds, such as San Mateo, which plans to use $155,000 to install 12 new EV charging ports at City Hall.
Trump’s recent executive order also goes after some of California’s environmental regulations, directing the Environmental Protection Agency to rescind waivers it has granted the state that allow it to impose more stringent rules on vehicle emissions standards. During the first Trump term, the Bay Area Air Quality Management District joined lawsuits against Trump with the state and other entities over similar efforts, one of which is still pending.
The vast majority of BAAQMD’s operating budget does not come from federal funds, but a $15 million Department of Transportation grant for charging infrastructure could be in jeopardy. Recent DOT memos have stated the agency will focus on projects in areas with high marriage and birth rates and those without vaccine mandates – as well as potentially end programs related to climate change.
In response to the uncertainty at the federal level, Hurt said regional entities should try to not only tighten up finances but also work even closer together with the private sector.
“We are going to need to have more public-private partnerships that help insulate us from this loss of federal support,” she said. “In some spaces, we’re going to need to take a closer at our budgets and figure out where we are spending money and see how those things can be altered slightly.”
While it’s still higher than pre-pandemic levels, according to recent Pitchbook data, venture funding for climate technology has decreased each year since 2021, as artificial intelligence takes an increasingly larger share of the funding pie. Tariffs are likely to keep impacting the private sector, particularly those reliant on solar technology. President Joe Biden raised tariffs on Chinese-made solar technology last year in an effort to boost U.S. production of renewable technologies. And while Trump implemented a 30-day pause on tariffs from Mexico and Canada, they are still in effect for China, which the U.S. relies on for solar panels and EV battery components.
“There is more concern with regard to the potential impacts of tariffs,” Reyes said. “Most of our power purchases are through our agreements with developers, and those developers may be impacted by the tariffs depending on how they are sourcing the panels, and batteries may also be impacted. For our local program we anticipated tariffs, and we accelerated our procurement processes for equipment.”
Additional tariffs from Trump coupled with a reduction in IRA funding, could be a hiccup in the clean energy market — but Reyes is still optimistic long term.
“The federal changes have the potential to create material impacts,” Reyes said. “That said, the cost of clean energy generation and electric vehicles continues to drop dramatically, so with the ongoing global momentum around these technologies, we do expect it to continue.”
(4) comments
Clean energy is important, however rebates and current projects are not going to the masses, but to those who can afford these very expensive projects. The rebates also cause the price to go up since the provider knows there is a rebate. There should be real progress in developing cleaner more efficient product. PCE should probably be allowed to stick around for the first iteration of infrastructure, but at some point in the future it assets should be acquired and run by utility companies with the proceeds going back to the local government who provided support. One downside to PCE is that it is directly in competition with other utility providers for a limit amount of resources cost both more to spend more of their own limited resources.
Can anyone explain to me how Davina Hurt managed to keep her position at the BAAQMD since is no longer in an elected position? Another example of the swamp that refuses to abide by the rules?
Good call Dirk.
The question I have about Davina Hurt, Laura Bent, Nicole Fernandez representing BAAQMD (Air Quality district) and/or the Samaritan House, why they would support, even celebrate a highway widening. Is it so great for them to bring more air pollution, more noise pollution, more car violence, more health problems into low-income, Equity Focus Areas?
And in the case of Nicole Fernandez representing also the Samaritan House and North Central - why would she then take away bike lanes from low-income, single mothers in her own neighborhood violating city and county Equity Plans in the process?
It's almost like the whole Equity, BIPOC, gender-equality discussions are only used as a distraction and not real for these people. So what are they really getting out of it?
https://ccag.ca.gov/san-mateo-county-express-lanes-joint-powers-authority-and-caltrans-hosts-opening-celebration-for-the-san-mateo-101-express-lanes/
A detailed article I will forward to the DOE and Elon Musk’s band of merry men at DOGE. Hopefully, DOE/DOGE can put a stop to this waste of federal taxpayer dollars flowing to “green industrial complex” projects and claw back funds already disbursed.
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