Energy Communities: related map layers

This article highlights map layers to locate energy communities that may qualify for Production Tax Credits and/or Investment Tax Credits from the Inflation Reduction Act

Energy Communities referenced here are as they are defined in the Inflation Reduction Act of 2022 (IRA). The IRA offers clean-energy projects up to 10 percent additional financial incentives if the projects are sited within an “energy community.” 

• Brownfields
• Coal Communities
• Jobs and Tax Revenue
• Assumptions, Clarifications, and Limitations of the data

Brownfields

Brownfields typically are small parcels of pollution-contaminated land that, once designated by the US Environmental Protection Agency, become eligible for funding that supports cleanup and redevelopment.

Coal Communities

Coal communities are any census tract where a coal-fired power plant has closed since 2010, or a coal mine has closed since 2000, and qualifies for additional incentives in the IRA, along with any adjacent tracts.

Jobs and Tax Revenue

The IRA defines this third type of energy community as a metropolitan or non-metropolitan statistical area (as defined by the Office of Management and Budget) where “0.17 percent or greater direct employment or at least 25 percent of local tax revenues [are] related to the extraction, processing, transport, or storage of coal, oil, or natural gas,” and unemployment is at or above the national average in the previous year.

An energy community also may be one where fossil fuels provide at least 25 percent of local tax revenue. However, no one knows how much revenue local governments get from fossil fuels. Although we have estimated fossil fuel revenues at a national level, no nationwide database provides this information at the local level, and most local-government budgets do not have line items for facilities or infrastructure related to coal, oil, and natural gas.

Assumptions, clarifications, and limitations of the data:

• Unemployment rates change frequently, it is not clear whether an energy community will stay an energy community - and continue to be eligible for the bonus tax credit. 
• A baseline 2021 US average unemployment rate of 5.3% was used
• For retired coal-fired power plants, exact coordinates don’t exist from 2010 to 2012. Instead, their ZIP codes are matched to the census tract with which they share the most land-area overlap.
• To calculate the percentage of the workforce directly employed in the energy sector, we sum the employment in North American Industrial Classification (NAICS) codes listed in Table 1, then divide by total employment. However, the IRA does not define which NAICS codes to use, nor whether to divide their sum by total employment or total labor force (which includes unemployed workers). The specific language in the IRA is, “extraction, processing, transport, or storage of coal, oil, or natural gas (as determined by the Secretary).” Two of these codes (213 and 486) include some non–fossil fuel activities but overwhelmingly consist of jobs in the coal, oil, and natural gas sectors.
• Counties don’t map perfectly to statistical areas in New England. We show county-level data for New England.

References: 

Federal Solar Tax Credits for Businesses - US Department of Energy
Business Energy Investment Tax Credit (ITC) - DSIRE
Energy Communities: Coal Closure - US Department of Energy
Energy Communities: Brownfields - Resources.org
Energy Communities: Fossil Fuel Employment + High-Than-Average Unemployment Statistical Areas*** - Resources.org

***We have the MSA/Non-MSAs that meet the Fossil Fuel Employment 0.17% Threshold - US Department of Energy layer in Transect but are NOT yet using it in Instant Parcel Search or Financial Incentives calculator because it is not complete and will produce false positives. The DoE estimates an updated map will be released in May 2023, and we will update it once a complete map layer is available.