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Senate's clean energy spending plan could spur investments in Michigan, supporters say

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A Senate spending proposal on the table in Washington this week could spur investment in clean energy in Michigan. Senate Republicans oppose the plan, in part because it would increase taxes on corporations and it calls for $369 billion in new federal spending on clean energy.

The proposal, known as the Inflation Reduction Act of 2022, calls for far less spending than what was in the $2 trillion “Build Back Better Act” passed by members of the U.S. House last November. But it still includes major proposals to deal with health care costs, and big investments in clean energy projects that would impact Michigan.

“A bill like this will demonstrate that these types of policies are not just good for climate, they’re good for the economy,” says Margrethe Kearney, senior attorney for the Environmental Law & Policy Center. “They’re good for our growth, they’re bringing us into the future.”

The 725-page proposal includes tax breaks and financing to spur solar and wind energy projects, and offers credits for homeowners and developers to make buildings more energy efficientKearney says the incentives for solar energy could help Michigan because the state produces a number of components that go into solar panels.

“Anything that boosts, in general, development of solar, is going to be helpful for Michigan,” Kearney says.

The proposal also includes $40 billion in investments specifically for rural communities, a detail highlighted by U.S. Senator Debbie Stabenow of Michigan in her statement supporting the plan.

“The historic investments will lower costs for Americans, support jobs in rural America, and tackle the climate crisis,” Stabenow said in a statement released last week. “We are equipping farmers, foresters, and rural communities with the necessary tools and resources to be a part of the solution and grow their local economies at the same time.”

Part of the proposed incentives also include grants and other support for farmers to adopt methods that result in less greenhouse gas emissions on the farm.

Perhaps the biggest wins for Michigan in the proposal, though, are the provisions that relate to electric vehicles. The plan would offer rebates of up to $7,500 on new electric vehicle purchases, and create a new $4,000 rebate for used electric vehicle purchases by low and middle-income buyers.

“We want to be making those electric cars here in Michigan,” said Kearney, “and I think that could be a huge boost to our economy and for our workforce.”

The proposal includes $2 billion in grants to upgrade auto manufacturing facilities to produce clean vehicles, and up to $20 billion in loans to build new clean vehicle manufacturing facilities.

Democratic Senate leaders say they plan to bring the proposal up for a vote this week. After that, the provisions of the bill would have to be reconciled with the U.S. House before it could go to President Biden to be signed into law.

Dustin Dwyer reports enterprise and long-form stories from Michigan Radio’s West Michigan bureau. He was a fellow in the class of 2018 at the Nieman Foundation for Journalism at Harvard. He’s been with Michigan Radio since 2004, when he started as an intern in the newsroom.
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