WASHINGTON, Aug. 17, 2022 (GLOBE NEWSWIRE) -- A breakthrough just came for U.S. development of clean infrastructure as the Senate passed the Inflation Reduction Act of 2022. Solar Investment Tax Credits (ITC) are a vital part of this legislation. Created by the Energy Policy Act of 2005, the ITC was due to be phased out. This new legislation ensures this critical incentive will remain at 30 percent or higher for the next decade. These tax credits are now being made available to tax-exempt entities for clean electric vehicle charging by a specialty finance company called Charge-Zero.
Unaddressed by the new legislation is the issue that tax credits are only useable by entities that pay Federal taxes. Unfortunately, much of America's new transportation infrastructure will need to be installed by state and local governments - entities that do not pay Federal taxes - and by real estate investment trusts (REITs), which are largely exempted from Federal taxes.
Last year's Infrastructure Investment and Jobs Act created the National Electric Vehicle Infrastructure Formula Program (NEVI), which allocates nearly $5 billion to provide funding to states to create an interconnected network of electric vehicle charging infrastructure. No considerations exist from the Federal government to incentivize this network to be powered by clean energy, though, as desired by the Inflation Reduction Act just passed.
Charge-Zero fills this gap. The creation of the ITC led specialty finance firms to create a niche financial structure called "tax equity," whereby non-tax-paying entities can access investment tax credits to reduce the cost of their clean energy investments. Charge-Zero utilizes tax equity to reduce the cost of NEVI program funded charging infrastructure projects and make them solar-powered.
Charge-Zero partner Zack Michaelson describes the business as filling in the gap to ensure EV charging infrastructure is incentivized to be clean. "The ITC is like a coupon. States, municipal governments, and REITs, unfortunately, are unable to use that large coupon. We create a way for them to use the coupon so that clean energy is also the cheapest energy," Michaelson says. Fellow Charge-Zero partner, Eric Lowitt, adds, "To charge EVs only via the grid defeats the purpose of switching to clean vehicles. The grid is ill-equipped to handle the surge in demand for energy from a growing fleet of EVs. That's why renewable energy infrastructure for EV chargers is needed. With today's news, these projects have become much more affordable."
With the Inflation Reduction Act of 2022 becoming law, and the private sector stepping in with Charge-Zero to make the ITC incentives accessible, there is a viable path for governments and REITs to build an interconnected network of clean energy EV charging stations capable of DC fast charging. The resulting infrastructure will increase America's energy resilience, reduce the dependence on expensive and imported oil, lower greenhouse gas emissions, and protect the fragile electrical grid.
Press Contact: Zack Michaelson
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