Biden administration announces tax breaks to push higher pay for green energy workers

The Treasury Department on Tuesday announced final rules for prevailing wage and registered apprenticeships (PWA) under the Inflation Reduction Act (IRA), saying that qualifying employers in the renewable energy sector will be eligible for a fivefold increase in the available tax credit.

Under the finalized rules, taxpayers will be eligible for the increased credit if they pay the prevailing wage, or the average wage in a given field within a given area. About three quarters of IRA renewable energy projects are sited in counties with median household incomes below the national average, according to a Treasury analysis.

“This rule will ensure these tax breaks are providing real, tangible benefits to workers in communities across the country,” acting Labor Secretary Julie Su said in a statement. “From fair wages to training opportunities for workers, this administration is doing everything we can to make sure working people share in the prosperity of a clean energy future.”

The Biden administration has sought to pitch renewables jobs and efforts to combat climate change as a job creator in contrast to Republican claims that they will cost jobs in the energy sector. United Auto Workers President Shawn Fain, while highlighting worker concerns about ensuring jobs will be preserved, has emphasized that he also considers the transition to renewables versus union jobs a false choice.

Senate Finance Chair Ron Wyden (D-Ore.), considered a climate hawk within the Senate Democratic caucus, praised the final rules and said they illustrated the stakes of the 2024 election.

“The idea that fighting climate change would end up hurting vast numbers of American workers was a fabrication by Republicans and their Big Oil donors all along,” Wyden said in a statement. “If Republicans are in control in 2025, they’re going to try to tear down the climate and energy reforms we passed in the Inflation Reduction Act, including these protections and benefits for workers.”