Taking advantage of the Inflation Reduction Act in Contra Costa County

After the success of The Future of Diablo Valley conference, for which I chaired and did the bulk of the organizing, I was approached by a friend in the local sustainability community. She asked me if I’d like to help organize a conference focusing on green tech in Contra Costa County. I enthusiastically said yes!

There’s a lot to chew on around this topic. To summarize the three massive spending bills passed by the Biden administration in 2021 and 2022:

  • $550 billion in new spending over the next five years in the Infrastructure Investment and Jobs Act (IIJA)
  • $280 billion in the CHIPS and Science Act
  • $390 billion for clean energy in the Inflation Reduction Act (IRA)

This all amounts to “industrial policy,” long considered the third rail in national politics for market meddling. But here we are, post-pandemic, with billions of money itching to be spent on green infrastructure. It’s precisely the boon my fellow climate tech entrepreneurs have been waiting for. I want Contra Costa County, the toilet-shaped county where I live, to take advantage of this. I want a green economy to grow and flourish in Contra Costa County. The question is: How do we take advantage of this windfall? 

The funds for climate come from the IRA and the IIJA. We’ll start with the IIJA. 

The IIJA includes $21.5 billion for clean energy demonstrations and research hubs. There’s $8 billion set aside for clean hydrogen. $2.5 billion for advanced nuclear, and $10 billion for carbon capture, direct air capture, and industrial emission reduction. The $1 billion allocated to demonstration projects in rural areas probably won’t slide here, even though much of Contra Costa remains in its 19th-century state. 

So the real industrial oomph comes from the IIJA. The IRA, which gets most of the attention in the media, provides nearly $400 billion in tax credits for consumers and businesses to adopt clean technology. McKinsey summarized these credits as:

  • $4,000 consumer tax credit for the purchase of a used electric vehicle
  • $2,000 consumer tax credit for the purchase of heat pumps, heat pump water heaters, biomass stoves, and boilers
  • $3 per kilogram for the production of clean hydrogen
  • $15 per megawatt-hour for power produced at a qualifying nuclear facility

I would love to see a renewed manufacturing sector in Contra Costa County. We’re perfect for it. I’d argue we’re better equipped than Fremont with its Tesla factory. We’re closer to rail, the Central Valle,  Highway 5, and shipping ports, and we have “cheaper” housing. Our network of community colleges is perfect for supplying the labor for the advanced, high-skilled manufacturing industries to support the green economy. 

We need to attract these businesses. But how? Contra Costa County has refineries but not much appliance manufacturing. We have a strong services sector, especially in the financial, medical, and real estate industries. We also have highly-trained tradespeople for building construction and maintenance. Diablo Valley College and our other local community colleges provide much of that training.

So, where does Contra Costa stand to benefit from the IIJA and IRA funds? I would look here. 

Services industries:

  • EV charger installation and maintenance
  • Heat pump installation and maintenance
  • EV and heat pump permitting, inspection, and construction management
  • Financial advice to access EV and heat pump incentives
  • Real estate management to execute these retrofits and promote green buildings to tenants and buyers

Government sector:

  • Streamline EV charger permits
  • Streamline water heater and HVAC permits
  • Electrify government buildings and fleets

Manufacturing industries:

  • EV chargers
  • Heat pumps
  • Solar panels

A stretch goal is to create a green technology manufacturing sector. For this to happen, we will need to get services going first and use that advantage to attract the industry. There’s a lot of research to do here, starting with understanding if these appliances are built anywhere in California. I suspect not. Suppose there’s an economic rationale or the possibility of an incentive provided by these federal dollars directly or through the state. In that case, I hope our county leadership will be aware and make noise about getting our share. 

How big is our share? According to this press release from the governor’s office, California will receive more than $16 billion from the IIJA. Allocated by population, Contra Costa should receive about $400 million. Then there’s the $47 billion multiyear infrastructure package already in the state budget. Our share of that budget is over $1 billion. So we have $1.4 billion potentially to work with, and more if we can be creative and put good proposals together.

The media calls this a once-in-a-generation event. Unlike the similarly-described extreme weather we’ve been experiencing, I agree that this funding won’t come again next year.

This is the case for organizing a Green Economy Conference in Contra Costa County. We need our representatives to see this window of opportunity, a critical period when economic incentives strongly align with environmental needs. A boom in green economic output could transform this county, producing the change I’ve been working towards through the Diablo Valley Tech Initiative.

I can continue to leverage my connection to Diablo Valley College, which will play a key role in connecting workforce development initiatives to the green economy. I’ll also bring in the connections and perspective I’ve gained recently from my work on Shovels. This will be fun! 

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