Maintaining Momentum: Alternative Funding Guide for State Energy Projects

The document addresses the funding gap for state Priority Climate Action Plans (PCAPs) following the oversubscription of the EPA's CPRG Implementation Grants. It outlines a framework for building 'capital stacks'—combining federal grants, tax incentives, and low-interest loans—to finance ten common climate measures across the transportation, electricity, industry, buildings, and waste sectors. The guide emphasizes leveraging the Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law (BIL) to maintain momentum in decarbonization efforts.

• The EPA's Climate Pollution Reduction Grants (CPRG) Implementation Grant program was significantly oversubscribed, with 299 applications totaling over $33 billion submitted, resulting in many state priority measures remaining unfunded despite the $4.3 billion available.
• States can fund unfunded priority measures by assembling a 'capital stack' that prioritizes public funds for projects unable to attract private capital, while using commercially viable projects to attract private financing.
• For transportation, states can electrify public fleets using the 45W Tax Credit for Qualified Commercial Clean Vehicles and the 30C Alternative Fuel Infrastructure Tax Credit, or access low-interest financing via the DOE’s Loan Programs Office State Energy Financing Institution (SEFI) program.
• Distributed energy resources (DERs) can leverage the IRA's expanded production tax credit (PTC) and investment tax credit (ITC), with bonus adders for domestic content, energy communities, and low-to-moderate income benefits potentially increasing the ITC value to 70 percent of project costs.
• Industrial decarbonization is identified as the most impactful sector for GHG reduction, with states encouraged to use federal tax credits and LPO programs such as Title 17 Innovative Technologies for non-commercialized tech like hydrogen and CCUS.
• Residential building decarbonization is the most common measure in state PCAPs; low-income households can stack the Home Efficiency Rebate (HER) and the Home Electrification and Appliance Rebate (HEAR), potentially receiving up to $8,000 for insulation and $14,000 for electric appliances per unit.
• Commercial building retrofits can utilize the 179D Energy Efficiency Commercial Buildings deduction, which provides up to $5 per square foot when prevailing wage requirements are met.
• Landfill diversion projects can be funded through Community Change Grants, the Solid Waste Infrastructure for Recycling Grant Program (SWIFR), and the Greenhouse Gas Reduction Fund (GGRF), while anaerobic digesters may use the ITC if construction begins before 2025.

APA

RMI (2024). Maintaining Momentum: Alternative Funding Guide for State Energy Projects. https://rmi.org/resources/maintaining-momentum-alternative-funding-guide-for-state-energy-projects/

Chicago

RMI. Maintaining Momentum: Alternative Funding Guide for State Energy Projects. 2024. https://rmi.org/resources/maintaining-momentum-alternative-funding-guide-for-state-energy-projects/.

Wikipedia

{{cite report |author=RMI |title=Maintaining Momentum: Alternative Funding Guide for State Energy Projects |date=15 August 2024 |url=https://rmi.org/resources/maintaining-momentum-alternative-funding-guide-for-state-energy-projects/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2024maintaining, author = {{RMI}}, title = {{Maintaining Momentum: Alternative Funding Guide for State Energy Projects}}, institution = {RMI}, year = {2024}, month = aug, url = {https://rmi.org/resources/maintaining-momentum-alternative-funding-guide-for-state-energy-projects/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }