This is the first blog post in a two-part series that Florida Policy Institute is publishing on federal infrastructure implementation. The next post will focus on the impacts of the Infrastructure Investment and Jobs Act and the Creating Helpful Incentives to Produce Semiconductors and Science Act.
Congress passed three sweeping pieces of legislation in late 2021 and 2022 — the Infrastructure Investment and Jobs Act (IIJA), the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, and the Inflation Reduction Act (IRA). Together, these three laws will invest over $2 trillion in federal funding to rebuild America’s infrastructure, accelerate the transition to a green economy, and create millions of new clean energy jobs.
So far, across all three pieces of legislation, FPI has tracked at least $3.6 billion in new federal commitments to Florida infrastructure projects — with more on the way — led by various state government agencies, investor-owned utilities, rural electric cooperatives, nonprofits, ports, universities, counties, cities, schools, private landowners and businesses, land trusts, and the Archdiocese of Miami. These investments will fundamentally reshape Florida’s public infrastructure.
IIJA and IRA are meant to work in tandem, so coordination and planning are crucial to maximizing impact and efficiency. Unlike many other states, however, Florida did not appoint an overall infrastructure implementation coordinator. The state’s approach also changed over time: first it refused, then quietly accepted $346.3 million in home energy and appliance efficiency rebates, and it has yet to set up the program (along with 47 other states). Florida was also one of five states that rejected $3 million for planning when the state declined Phase I of $5 billion in Climate Pollution Reduction Grant funding. Then, in September 2023, the five metropolitan areas that did apply learned they did not receive any funding. When required by law, however, state agencies have prepared deployment plans for certain initiatives, including EV charging.[2] Yet this deployment has been slow and politicized, even though the state has the second-most electric vehicles in the nation.
FPI will be tracking the impact of the new infrastructure investment programs in IIJA, IRA, and the CHIPS and Science Act; specifically how these programs impact everyday Floridians, especially communities with low income, communities of color, and under-resourced communities.
The Inflation Reduction Act
The IRA is not a single program but a puzzle of tax credits, loans, formula grants, and competitive grants spread across more than a dozen federal agencies. However, at its core, the legislation offers a crucial opportunity for state, local, and Tribal governments to play a much more active role in addressing cost-of-living crises, investing in communities, and tackling extreme weather impacts while transitioning to clean and renewable energy.
In the past, the federal government has incentivized clean energy mainly through tax credits, which does not help public and nonprofit entities since they are exempt from state and federal taxes. However, starting in 2023, as a result of the IRA's elective pay feature, the federal government will provide supercharged subsidies straight to these groups to develop clean energy while reducing reliance on private investors.[3] The Bipartisan Policy Center estimates that elective pay could double the impact of every federal dollar spent because private investors will not be drawing off some of the funds. That means Florida’s local governments and nonprofits could double the $3.6 billion the federal government invested. The tax credits also do not have a cap. The Brookings Institution estimates that the tax credits could deliver as much as $780 billion in investment and consumer savings instead of the initial $270 billion estimate. In fact, the Congressional Budget Office already rescored the law to reflect higher-than-expected green technology tax credit uptake.
The clean energy tax credits are a core equity lever. Unlike other tax credit programs, the bulk of IRA clean energy tax credits are tied to strategic equity outcomes: investing in domestic manufacturing, paying prevailing wages and apprenticeship programs, and directing investment into communities with low income. There are also bonus credits for locating projects in energy and communities with low income. For example, while the base amount for the Investment Tax Credit is just 6 percent for large projects that do not meet the prevailing wage and apprenticeship requirements, applicable entities can stack bonus credits to cover up to 70 percent of the cost basis of eligible projects. There is a loophole, however, for projects that produce under 1 megawatt: they automatically qualify for the 30 percent base credit.
While the IRA offers a critical opportunity for Florida governments, most of these programs, including the tax credit subsidies, are carrots, not sticks. Local and state governments could stall, leaving money on the table and ceding key siting and ownership decisions to private market actors alone.
The public and private sectors in states like Texas, Georgia, Nevada, and Arizona have been quick to capitalize on the new subsidies. Texas has created solar and storage resources faster than any other state since the IRA passed, with 35.6 gigawatts of clean energy capacity planned over the next 18 months, compared to Florida’s 2.2, even though Florida ranks third in the nation in rooftop solar energy potential.
Florida is one of only four states that bans power purchase agreements, requiring solar energy to be sold exclusively by utilities, which limits solar deployment. This and other laws limit competition and favor utility monopolies over private enterprise, industry growth, and consumer cost savings. It also limits public sector potential. However, one workaround is long-term solar leasing. Seeing an opportunity with the IRA, the Empower Coalition in Alachua County developed one such solar leasing program to place solar panels on municipal and education buildings through 30-year lease agreements. The funding raised by the leases would be placed in a fund managed by the county, in partnership with a community coalition, and directed to benefit the most energy-burdened households.
So, what are the main things the IRA can do for Florida communities? Below, Florida Policy Institute reviews some of the key funding decisions and opportunities.
Incentivizing the Deployment of Clean Energy and Reducing Climate Pollution
Clean energy is by far the largest funding sector in the IRA, receiving $250.6 billion out of the total $393.7 billion (64 percent). Funding methods include tax incentives, grants, and loans for clean electricity generation and storage, clean transportation, and electric vehicle incentives. While Florida's restrictive utility regulation, rising insurance costs, and storm risks pose challenges for scaling rooftop solar, public agencies and nonprofits can play a key role in accelerating the deployment of clean energy by leveraging their assets and elective pay to install building-scale solar and other clean technologies.
The Greenhouse Gas Reduction Fund (GGRF) is the largest allocation in the IRA at $27 billion. GGRF will promote overall green investment by enabling nonprofit and public sector developers to monetize tax credits and supercharging the Community Development Financial Institution sector (CDFIs are nonprofit community-based lenders) with $20 billion in new investment. GGRF capitalizes a whole new public and non-profit green finance sector, with the idea that these institutions will leverage significant additional private investment. There are 37 CDFIs operating across the state that will begin to see an uptick in green capital available for low-income lending. GGRF funds were obligated on August 16, 2024, so it is too early to tell how these new green finance intermediaries will operate in Florida.
The Florida Solar For All Coalition (FSFA), which includes the Solar and Energy Loan Fund — the one Florida-based nonprofit green bank — is the only direct GGRF recipient in Florida.[5] FSFA received $156.12 million to deploy rooftop solar energy systems, and it will prioritize the most energy-burdened households across the state. The coalition will focus on single-family homes and multi-family rentals in communities with low income. They are planning a soft launch this fall and a public launch in February 2025.
The first year of the communities with low income bonus credit program also had a big impact in Florida: in 2023, 2,603 facilities received the bonus, generating 31 megawatts of clean electricity and receiving a portion of approximately $3.5 billion in federal investment. This credit was designed to benefit households with low income and affordable housing developments.
So far, the single largest clean energy award likely goes to Seminole Electric and two rural electric cooperative co-applicants. Seminole is a generation and transmission cooperative that provides wholesale electric power to nine rural electric cooperatives in Florida, servicing over 2 million Floridians and 42 counties. Seminole will receive a portion of the $9.7 billion Empowering Rural America Program to build 700 megawatts of solar energy and create 3,400 short- and long-term jobs. By comparison, all of Florida’s utilities announced less than 800 megawatts of solar photovoltaic investment in the last four quarters.[6]
Lowering Energy Bills and Improving Energy Efficiency
The IRA’s main policy to fund retrofits in households with lower income was left to the states, and unfortunately, that means many of the programs, including Florida’s, are stuck. The Florida Department of Agriculture and Consumer Services received $346.3 million to set up rebate programs for energy efficiency retrofits and appliance efficiency upgrades. The Whole Homes Rebate Program will provide rebates to households of low and moderate income for energy efficiency retrofits ranging from $2,000 to $4,000 for individual households and $2,000 to $4,000 per dwelling in multi-family buildings. The Home Electrification and Appliance Rebates are exclusively for households with less than 150 percent of Area Median Income to purchase high-efficiency equipment, with a rebate cap of $14,000 per household. The U.S. Department of Energy is currently reviewing the state’s application to set up the program.
Then there are the household clean energy and efficiency tax credits. Many of these credits go to consumers, and anyone who buys an eligible item qualifies. Households can deduct up to 30 percent of the cost of installing solar panels, insulating their homes, and purchasing other items to reduce energy bills and emissions. Housing developers are eligible for certain credits up to $5,000 to meet energy efficiency standards, and commercial buildings can receive credits for reductions in energy use.
Unfortunately, the benefits of these credits have accrued overwhelmingly to people with high income. IRS data revealed that the 25 percent of households with the highest income received 66 percent of the tax credits, worth a total of $5.5 billion, while the 25 percent with the lowest income received just $32 million. Governments and nonprofits must move quickly to ensure new investment opportunities equitably benefit people who cannot afford upgrades with a high upfront cost.
Investing in Resilience – Restoring Communities, Coasts, Trees, and Water Infrastructures
Dozens of Florida governments secured significant federal investments for new resilience infrastructure, which will remake streetscapes across the state. Though most initiatives in this area are fully allocated, the EPA Community Change Grant program, an environmental justice program, remains open through November 2024.
In 2023, USDA’s Urban and Community Forestry Program awarded over $29 million to 23 local and county governments in Florida to expand tree canopies — vital for heat mitigation — in urban, suburban, and rural communities. The Miami-Dade County Parks Department received $10 million to create a healthy urban forest in low-income areas with low tree canopy and restore critical habitats in under-resourced communities. Florida is the hottest state in the contiguous United States, with the highest number of heat-related illnesses. Tree canopy coverage is below 10 percent in one out of five Miami ZIP codes.
In 2024, the U.S. Department of Transportation awarded three city governments and one Tribal government in Florida more than $209 million to reconnect communities cut off by inequitable transportation infrastructure decades ago, leaving neighborhoods without direct access to opportunity, schools, and essential services. The $147 million the City of Jacksonville secured to complete the Emerald Trail was the largest one-time federal grant the city has ever received. The 30-mile Emerald Trail will connect 14 historic urban neighborhoods to downtown, the St. Johns River, McCoys Creek, and Hogans Creek. The Emerald Trail will link 16 schools, two colleges, three hospitals, 21 parks, and the Regional Transportation Center, among other destinations.
While Florida has yet to receive any funds from the EPA Community Change Grant program, the Alachua County Empower Coalition intends to apply for this funding for their solar leasing program. Community Change grants will fund $10 million-$20 million community-driven projects that address climate challenges and reduce pollution while strengthening communities through thoughtful implementation. Numerous coalitions from across the state applied for funding, and all funding is expected to be committed by year’s end.
Cleaner Air Through Clean Transportation
The IIJA includes several important grant programs for cleaner air that have already directed hundreds of millions to Florida schools and municipalities — and much more funding is likely on the way. Two important IRA programs, the Clean Heavy Duty Vehicles and Clean Ports Program, are slated to announce the recipients of $4 billion in additional funding by the end of 2024. There will also be awards announced soon for Air Monitoring and Air Quality Sensors Grants.
Two IRA tax credits will benefit the same schools that just received school buses through the IIJA’s Clean School Bus Rebate Program. One credit is for commercial clean vehicles, with up to $40,000 available for each vehicle weighing more than 14,000 pounds. The second is for alternative refueling properties that allows for a tax credit of up to 30 percent of project costs, up to $100,000, that can be used for each unit of charging infrastructure in low-income and non-urban areas if school districts meet prevailing wage and apprenticeship requirements.[4]
Up to this point, 378 electric school buses have been committed to Florida school districts, so the commercial clean vehicles tax credit alone could add $15,120,000 to Florida school district budgets, depending on how the school districts claimed the IIJA rebates and purchased the buses. [7]
Notes
[1] $650 billion of $1.2 trillion of IIJA spending is reauthorizations of existing programs, for items like highway formula funding, which are excluded from this calculation. For more about the current highway funding formula, see here. FPI will focus on tracking the impacts of the new federal investment programs in IRA, IIJA, and the CHIPS and Science Act. FPI is still updating its database and expects this figure to grow.
[2] ~$75 billion of formula grants in IIJA require state plans. For one example, see Florida’s Electric Vehicle Infrastructure deployment plan here.
[3] The production tax credit and the investment tax credit are the primary credits project developers will claim to install new clean power sources.
[4] Florida repealed its prevailing wage law in 1979, so it follows rates set by the U.S. Department of Labor under the Davis Bacon Act. Executive Order 14026 applies to most new covered workers, setting the wage floor at $17.20/hr.
[5] The Florida Solar For All Coalition is a partnership between Solar United Neighbors (SUN), The Nature Conservancy, and St. Lucie-based Solar and Energy Loan Fund (SELF).
[6] See here. Duke Energy Florida, LLC and Florida Renewable Partners (an affiliate of Florida Power & Light) each announced 225 megawatts of new solar photovoltaic investment over the last four quarters.
[7] Applicable entities cannot derive excess benefit to exceed the costs basis of the applicable purchase under IRS guidelines.
