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New federal incentives can help communities repurpose brownfields into brightfields, high-value sites that support equitable, clean energy
Brightfields, like any clean energy project, will be able to take advantage of these broadly applicable clean energy tax credits. More importantly, for the first time ever, the IRA includes federal incentives that explicitly support brightfields and the communities where brownfields are most common:This provision creates a 10% tax credit bonus for solar and wind projects sited on brownfields; in areas with significant employment in coal, oil, gas extraction or processing since 2000; or, in or adjacent to a census tract where a coal mine closed since 2000 or coal unit retired since 2010.
.This provision also creates two incentives for low-income community-oriented projects up to 5 MWs: 10% tax credit bonus for solar and wind facilities located in qualifying low-income communities or on Tribal land; or, 20% tax credit bonus for projects that financially benefit low-income or Tribal communities, most likely through a. Projects are defined as “benefitting” these groups if at least 50% of the financial benefits of the project go to households with incomes less than 200% poverty line or incomes less than 80% of an area’s gross median income. Because closed landfills, Superfund sites, and other brownfield sites were often located in disadvantaged and marginalized communities, these two incentives work in tandem to encourage brightfields reinvestment in lower income areas that were home to or bordered industrial and other fossil-fuel intensive operations. Taken together, these two incentives dramatically shift where investment in the clean energy economy will likely be prioritized. The new Energy Communities and Low-Income Communities tax credit incentives can fundamentally alter the equation for projects depending on where they are sited and who they benefit. In fact, for projects meeting all these criteria, it’s possible to achieve a 70% investment tax credit. At this level, more costly, complex projects that had previously struggled to pencil out financially may now get a green light.Did you know that for the first time ever, the Inflation Reduction Act enables tax-exempt entities to claim direct payment instead of tax credits for qualifying projects? This opens the door for projects to be owned by tax-exempt entities . Before this, these entities were ineligible to directly capture the benefits of federal tax credits because they did not pay federal taxes.RMI is partnering with theto Brownfields program to launch the first-ever accelerator for brightfields projects to create a broader project development pipeline for the market. This program will include technical assistance, tools, and other resources to help local governments, site-owners, and community partners make smart and sustainable choices about the reuse and revitalization of brownfield sites and prepare for funding, financing, and procurement for clean energy. We will help communities understand and leverage the new IRA incentives that encourage clean energy projects on brownfields and in low-income communities. This 4 MW solar project is in Cuyahoga County, OH and supplies enough electricity to power 500 homes. Photo courtesy of Jackie Lombardi viaThis technical assistance builds directly on RMI’s years of experience as one of the leading technical partners to major US cities through the. In this initiative, RMI helped cities small and large across America implement their climate action plans and collectively procure over 500 MW of clean energy. Now, RMI will be enhancing the brightfields toolbox and helping communities prepare for brightfields development. The US energy system has always required land — from coal mines to oil rigs to natural gas pads. Unquestionably, the energy transition will need open areas to host solar panels, wind farms, and other clean energy facilities. The good news is that brownfields of all types — including closed landfills, old industrial areas, and even— can be part of the solution if developed safely, strategically, and in accordance with environmental regulations. Given the enormous untapped potential of these sites and new IRA incentives, the time is ripe to shift brightfields from an emerging practice to a mainstream opportunity. Doing so will enable communities of all shapes and sizes to embrace and benefit from the clean energy transition. To learn more about how your community can participate in this Brightfields Accelerator or how you can support RMI’s Brightfields Accelerator, contact Matthew Popkin at
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