Photo credit: Dreamstime / Gino Rigucci
Streetcar Light Rail Www dreamstime com Gino Rigucci 1025

Infrastructure Bill Could Pump Billions into the Electrical Construction Market

March 11, 2021
If an infrastructure bill becomes a reality, it could mean billions in federal financial incentives and rebates to fuel the purchase of electrical products

Once the ink is dry on the $1.9-trillion COVID relief bill, Democratic leaders will dig into what will be an even more complicated piece of legislation — an infrastructure bill with a price tag that could easily top $2 trillion.

While President Biden hasn’t revealed many details of what he wants in what may be a historic infusion of federal funds into the nation’s infrastructure, his “Build Back Better” infrastructure proposal that was a big part of his election campaign and a recently proposed program for infrastructure spending by the House of Representatives, point to billions of dollars in federal funding that would provide the electrical industry with all sorts of potential sales opportunities.

The COVID Relief Package (HR 133) that President Biden is expected to sign on March 12 appears to offer comparatively little in the ways of electrical sales opportunities, other than electrical products needed in K-12 schools for retrofit projects involved with the installation of better air ventilation, handling and filtration systems, that could be funded by the $54.3 billion in the bill earmarked for these facilities.

In contrast, an infrastructure bill would quite likely offer billions in federal funding for a broad array of applications loaded with electrical products including:

•Electric vehicle charging networks

•Another round of rebates for the installation of energy-electrical products in commercial, industrial and residential applications

•Commuter rail and light rail systems

•Airports and other air traffic facilities

•R&D for newer technologies like battery storage and cells and supporting existing renewables such as solar and wind

• Electric utility grid

• High-speed internet to underserved urban and rural areas

President Biden’s “Build Back Better” infrastructure proposal offered insight into just how big of an investment he believes is needed. A post on www.joebiden.com, his campaign website, read in part, “It seems each Congress and every new Administration includes infrastructure as a top priority. Despite broad support from diverse coalitions, however, too often they fail to act. Our nation must launch a massive investment program in transportation, energy, water and communications technologies.

“Doing so will repair our crumbling roads, bridges and transit and the current gridlock in our major economic hubs that harm our productivity, global competitiveness and quality of life. It will propel public and private efforts to decarbonize our economy in a meaningful way and close the digital divide by expanding broadband and internet access. This effort also provides an opportunity to ensure the benefits and jobs from infrastructure investments are shared with communities that have borne disproportionate burdens in the past.”

Any infrastructure bill passed in Congress will most likely include elements of the Climate Change proposals that have been discussed in the halls of Congress by legislators and trade group lobbyists over the past few years. But a healthy chunk of any infrastructure spending will go toward repairing the nation’s network of roads and bridges, which have in many cases suffered from years of neglect. While some of this spending will go to street and highway lighting, other parts of infrastructure spending proposal will be of more interest to electrical manufacturers, distributors, reps and contractors.

The most recent of these proposals is the CLEAN Future Act announced on March 2 by leaders of the House of Representatives’ Energy and Commerce Committee. Aimed at cutting greenhouse gases and a “clean energy transition” for large parts of the U.S. economy, the proposal offered some ideas on the level of funding for the infrastructure investments outlined above. The scope of the CLEAN Future Act is mind-numbingly large, and it would pump billions of dollars into the electrical construction and utility industries if many of its energy- and grid-related proposals were ever passed by both houses of Congress and signed into law by President Biden. To give you an idea of just how big the dollars could be for the electrical market, Electrical Marketing’s editors highlighted several ideas in the CLEAN Future Act that we think would have the most sales potential for the electrical market.

Electric vehicles (EV)

The proposal includes all sorts of funding in the EV arena, including the authorization of $100 million per year from 2022-2031 for a DOE program that would provide rebates to eligible entities that install publicly accessible electric vehicle supply equipment. The CLEAN Future Act is loaded with billions of dollars for manufacturers of equipment for plug-in EVs, as it would authorize $2.5 billion per year from 2022-2031 for the DOE to “accelerate domestic manufacturing of batteries, power electronics, and other technologies for use in plug-in vehicles.”

Building energy efficiency

The CLEAN Future Act is currently proposing massive funding in this area, including $500 million for workforce training; $8 billion in rebates for home retrofits; and a whopping $17 billion-plus for the Department of Energy’s existing Energy Efficiency and Conservation Block Grant Program.

Funding for states to transition to a net-zero economy

Along with providing $200 million in funding to help states prepare plans to tap into an existing EPA program in this area, the House Committee’s press statement said the CLEAN Future Act would establish a “Clean Energy and Sustainability Accelerator” with $100 billion to help states, cities, communities and businesses transition to a clean energy economy.

According to the House’s infrastructure proposal, “The Accelerator will leverage public and private funds to provide financing for clean energy technologies and infrastructure, climate resiliency, building efficiency and electrification, industrial decarbonization, transportation electrification, and more.”

Public school funding for energy-efficiency improvements and renewable energy

The CLEAN Future Act would authorize $100 million per year from 2022-2031 for a grant program that would fund energy improvements in schools such as “air quality, daylighting, ventilation, electrical lighting, and acoustics, and facilitate installation of renewable energy technologies.

Rebates for industrial facilities that invest in more energy-efficient facilities

Manufacturers would have access to $1 billion per year in DOE rebates from 2022-2031 if they upgrade their facilities to improve energy and water efficiency and reduce greenhouse gas emission with a DOE-qualified technology. “Qualified entities with over 500 employees are eligible for a rebate that is 25% of the overall cost of a qualified technology, and qualified entities with under 500 employees are eligible for a 40% rebate,” according to the proposal. “Qualified entities can also apply for additional rebates for qualified technologies made in America, that facilitate the switch to a low- or zero-carbon energy source, and that are used to manufacture Carbon Star products.”

In addition to these financial incentives, the CLEAN Future Act includes a “nationwide Clean Electricity Standard (CES)” that requires electric utilities to obtain 100% clean electricity by 2035, and “invests heavily in clean energy, distributed energy resources, grid infrastructure, and microgrids.”

It’s way early to say which proposals in the CLEAN Future Act described here will ever be signed by law. But it’s not a bad idea to track the progress of it and any other infrastructure proposals that the House of Representatives or U.S. Senate come up with, because the chance of some sort of infrastructure legislation being passed in the Democratic-controlled Congress would appear to be pretty decent, and any bill would most likely contain big-time funding for the installation of electrical equipment.

The challenge will be figuring out how to access the available funds in the various DOE or EPA programs and getting to know the various government entities that will manage them.