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4w ago

Schools Scramble to Preserve Clean-Energy Plans as HR1 Cuts Credits and Speeds Deadlines

Treasury’s physical‑work test, coupled with a September 30 EV credit cutoff, forces accelerated timelines and fresh financing gaps for districts and campuses.

Emma Weber leads a chant at a Colorado state capitol rally in support of “The Green New Deal for Colorado Schools.”
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Overview

  • HR1, enacted July 4, discontinues many Inflation Reduction Act incentives that schools planned to use and sets a June 2026 “commence construction” deadline.
  • New Treasury guidance issued August 15 replaces the 5% spend test with a stricter physical‑work test requiring significant on‑site labor before projects qualify.
  • Electric vehicles acquired after September 30 lose eligibility for tax credits, affecting school buses and chargers, with one estimate adding up to $40,000 per bus despite EPA’s program still covering about two‑thirds of costs.
  • Los Angeles Unified expected roughly $25 million in credits for a $90 million solar and EV‑charging effort but now turns to bonds, utility rebates, third‑party financing, and state grants to fill the gap.
  • Districts from Tucson to CSU campuses weigh accelerations, scale‑backs, or alternative funding as smaller systems struggle with complex rules, even as ground‑source heat pump credits remain available.