CLIMATEWIRE | Officials at Valley Children’s Healthcare wanted to build a renewable energy microgrid after rolling blackouts swept across parts of California due to wildfires six years ago.
But as a nonprofit, the facility wasn’t eligible for renewable energy tax credits.
The Inflation Reduction Act changed that by allowing nonprofits and local governments to take advantage of tax credits that had previously been available only to the private sector.
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“Our organization, by definition, is about protecting the future, because children are the future, but when you’re a not-for-profit, tax credits are of no value to you,” Valley Children’s CEO Todd Suntrapak said in an interview. “The IRA dramatically changed our financial picture.”
Valley Children's is now preparing to break ground on a new microgrid that will supply about 80 percent of the energy needs at its main campus. The Inflation Reduction Act is providing direct payments to cover nearly half the cost.
The Department of Health and Human Services is working to ensure that more health care systems follow in Valley Children's footsteps.
The Inflation Reduction Act's direct payment and transferability language is "a game changer" for the nation's health care system — and its emissions — said Joe McCannon, a senior adviser at the Office of Climate Change and Health Equity at HHS.
Roughly 8.5 percent of U.S. greenhouse gas emissions come from the health care sector — that’s one reason the Biden administration established the Office of Climate Change and Health Equity three years ago. Then last year, the office launched a Health Sector Climate Pledge to urge health care organizations to commit to halving their greenhouse gas emissions by 2030.
The next step in that process, McCannon said in an interview, was the creation of the "Catalytic Program," which is designed to make sure that entities within the health sector — particularly community health centers working with limited resources to treat underserved populations — understand how to take advantage of the new funding.
The program involves biweekly workshops between January and April to help health care providers identify their sustainability needs, and find and access funding in the Inflation Reduction Act. The program offers additional help to “safety net providers” and community health centers, whose patients are less likely to have insurance and are more likely to suffer from the health effects of climate change.
“It’s one thing to tell people what’s out there and another thing to help them understand the mechanics of it and how to get it,” McCannon said. “That’s especially true of safety-net providers operating with constrained resources and serving those most impacted by climate change.”
The Catalytic Program will also advise health care centers on how to apply for grants through the climate law, but McCannon said there is a particular focus on the direct pay provisions because they are an entirely new funding mechanism.
“Our hope is that this catalyzes billions of dollars of investment in health care sector infrastructure and really remakes that infrastructure,” he said.
HHS is not alone in trying to draw attention to the pay provisions in the Inflation Reduction Act. The White House has previously issued press releases encouraging public school systems to take advantage of the new funding.
As of mid-January, more than 1,100 projects that are registered through the IRS online portal are taking advantage of the new provisions, the Treasury Department said.
“Increased access to clean energy credits is acting as a force multiplier so that more clean energy projects are built quickly and affordably, and more communities benefit from the growth of the clean energy economy,” Deputy Secretary of the Treasury Wally Adeyemo said in a press release.
At Valley Children’s, the Inflation Reduction Act's impact will be “immense,” said Suntrapak, who has spoken at White House events promoting the climate law.
The planned microgrid, along with fuel cells and a 40-acre solar farm, require an investment of $30.5 million. The Inflation Reduction Act will provide $13 million in direct payments, accounting for 42 percent of the project’s cost.
Without the Inflation Reduction Act, Suntrapak said, the hospital likely would have had to divide the project into smaller, less expensive sections that could be completed over a longer period of time, pulling resources away from patient care.
“We’re not going to be tying up as much capital in this investment, and we’re going to have more efficiency, and we now get to take those savings and put it directly into medical care for kids,” Suntrapak said.
Reprinted from E&E News with permission from POLITICO, LLC. Copyright 2024. E&E News provides essential news for energy and environment professionals.