A version of this article was originally published in The Daily Brief, our Maine politics newsletter. Sign up here for daily news and insight from politics editor Michael Shepherd.
A year ago, President Joe Biden signed the Inflation Reduction Act into law.
It was a misnomer, since analyses then and now said it would have little effect on inflation. The bill’s influence is going to rise in the next few months, including in Maine, where it is at the center of climate initiatives.
The context: Last year’s political fight over the party-line law trickled down to Maine after U.S. Rep. Jared Golden, a Democrat from the 2nd District, aligned himself with centrist Sen. Joe Manchin, D-West Virginia, on the package that Manchin co-authored as the key vote to pass it in the Senate.
Since then, Gov. Janet Mills has boosted the law. The Democrat did an interview with NPR on it this week in which she called it “a big benefit to us in Maine,” citing subsidies for heat pumps and other devices in a state that is still the most reliant on heating oil.
“We’re kind of frugal as a rule, and people hate spending all that money on oil and propane for winter heat,” she said.
While Mills has put forward the most aggressive climate agenda in Maine history, those remarks showed her focusing mostly on the immediate cost savings from a shift away from fossil fuels. Though that policy goal has been clear in Maine for more than a decade, it is still politically sensitive. Both Mills and her 2022 rival, former Gov. Paul LePage, signed an oil industry pledge on “energy choice” during the heat of their campaign.
What it’s done: The Inflation Reduction Act was a broad bill spanning taxes and health care, but the climate initiatives have been the most well-publicized items. At the beginning of the year, the first incentives for electric vehicles and heat pumps were made available. More subsidies will come on line by early 2024, according to Efficiency Maine, which manages state grants.
That will add up to $72 million in rebates by the end of the year, the agency said. The state is not planning to stack them atop existing incentives that have also gotten more generous in the past few years, so the only major increase coming could be for low- and middle-income families upgrading to heat pumps. Other incentives under the law could be similar.
What’s next: There will be challenges for states as these incentives roll out. For example, the list of electric vehicles qualifying for them is relatively short due to domestic production requirements. Maine has seen slow adoption of these vehicles as well, adding up to a paltry 4 percent of its 2030 goal as of last year.
At a higher level, the state and region are going to need more power in the ensuing years, putting more importance on the success of transmission lines and offshore wind, both of which come with major political hurdles. Homes will need more backup power if they are transitioning toward electricity, and there have been delays for whole-home generator purchases.
But the long-term energy direction here has been clear, and the Inflation Reduction Act looks to be speeding us along that track.