Jan 24, 2023 3 min read Energy

Week 1: Inflation Reduction Act

An excerpt from Ezra Klein's interview with Jesse Jenkins that I feel helps me understand what the IRA does pretty well:

JESSE JENKINS: So what the Inflation Reduction Act does at its core is focus on making clean energy cheaper. And it does that in two main ways. The first way is with subsidies, right? So there’s a big package of tax credits that does the bulk of the work. But there’s also rebates for low-income households to do energy efficiency and electrification.

There’s loan programs that can help offer lower cost financing for projects. There’s grants that go out to states, and rural utilities, and others to help install things. And all of that is designed to make the cleaner option the good business decision, the good household financial decision. So that when you’re a utility thinking about where you want to purchase new electricity from, or you’re a fleet manager for Amazon thinking about what kind of delivery vehicles to buy, or you’re you or me thinking about how we want to get around town, what kind of vehicle do we want to purchase when the current one wears out. All of those decisions, we basically are putting the thumb on the scale heavily for the cleaner option over the dirtier option.

So that it just makes good economic sense. And that clean energy is cheap energy for everybody. That’s with subsidies upfront, but it’s also going to kick off the same kind of innovation and incremental learning by doing in economies of scale that unlock those tremendous cost reductions for solar, and wind, and lithium ion batteries over the last decade. The reason that these aren’t expensive alternative energy technologies, as we called them in the 2009 era, and are now mainstream affordable options is because we used public policy.

We, in the broad human sense, right? So Germany and Spain and China and the United States and a whole bunch of different countries decided to subsidize the deployment of those technologies when they were expensive, create early markets that drove innovation and cost declines and made them into tremendously affordable options for the future. And so we’re going to kick off the same kind of processes as well with this bill, building on the demonstration and hubs funding and things like that in the infrastructure law for the next generation of technologies that can take us even further down the path to net zero beyond 2030.

From their discussion later, it sounds like Jenkins is convinced that the financial incentives of the bill – essentially providing cheaper energy to people, while creating more opportunities for businesses to save or profit – will be able to circumvent some of the usual pitfalls of change that Ezra raises. Incidentally, my parents have installed solar panels to the roof of their home here in NYC through some process I'm still not totally clear on that essentially allows them to maintain their current electricity bill in the short term without directly paying for the installation of the panels themselves – at first it sounded "too good to be true", but it seemed to my parents the good household financial decision, as Jenkins describes.

For class this semester, I'm hoping to apply some of what we learn to a game, inspired in part by a game I played as a kid for the Game Boy Advance called Boktai. The game starred solar boy Django, who fights vampires with the Gun Del Sol, a solar-powered gun you charge up using a tiny solar sensor attached to the game cartridge.

The solar sensor has a small but critical role in the game – you can't fight vampires and other demons unless the Gun Del Sol is charged. I'd like to apply a similar function to a much simpler game. Perhaps changing the running speed of a character on a small LED based on the amount of solar energy?