Learn the Basics of the Energy Community Bonus Adder Provision 

When we think about the term energy communities, as in the bonus adder provision included in the Inflation Reduction Act, we’re referring to legacy fossil fuel communities anchored in the extraction, processing, or generation of energy using coal, oil, and gas. While many are excited about the clean energy transition, it’s important to consider the people and communities where many are currently or have previously worked in these legacy energy technologies. That’s the core intent of the Energy Community Bonus Adder financial incentive – to support energy communities and ensure that they are not left behind as we shift to renewable energy. 

Of all the solar provisions included in the Inflation Reduction Act, the Energy Community Bonus Adder is considered one of the more simple ones. That’s because there’s no limitations on the amount of projects that qualify under this Bonus Adder, so it can be built into the financial models of your projects.

In this excerpt from the new Inflation Reduction Act Solar Provisions: Energy Community Bonus Adder course, we hear from Lee Barken, Chief Community Officer at CollectiveSun, about the three ways to qualify for the Energy Community Bonus Adder as well as review an eligibility map. To dive deeper into the Energy Community Bonus Adder criteria, like MSAs (or Metropolitan Statistical Areas), be sure to enroll in the free Inflation Reduction Act Solar Provisions: Energy Community Bonus Adder course from CollectiveSun. 

To recap, everything about energy community or fossil fuel energy community bonus adders is based on location and there’s three ways to qualify.

You can either be in a brownfield. You can be in a statistical area. That’s the MSA [Metropolitan Statistical Area] or non MSA, or the coal closure. 

Those are the three ways to go about it.  

Here’s your map. You’ll notice here, something really interesting kind of jumps out at you. First of all, one –  brownfields aren’t on here. That’s going to have to be researched separately.  

Two is that the statistical areas are these blue areas. That’s the MSAs or non MSAs that are eligible. They have the 0.17 percent and they have unemployment that’s greater than the national average.  These orange areas are,  you know, category number three – the coal closures. 

So the intention here originally, when you think about Joe Manchin in West Virginia, we all thought like Appalachia is going to have  incredible opportunities for eligibility because you normally associate coal plants and coal mines with this region. But look at how much of the country actually became eligible. Enormous parts of the are able to claim eligibility, not just from category three, but category two. 

So, and next year, all these blue areas, these purple-ish areas will potentially look different.   And there’s a lot of places where you might not think you’re going to be eligible, but I’d really encourage you to check.