Renewable Energy Inflation Reduction Act 2022 has now become Law in U.S.

Vice President Joe Biden signed the Inflation Reduction Act of 2022 into law. The IRA has allocated $370 billion for climate and energy projects for the future ten years.

The inflation Reduction Act (IRA) is the largest climate and energy spending package in American history. The massive energy, climate, and tax package allots $370 billion to promote renewable energy and climate resilience.

IRA Main Objectives

The first objective of the IRA is to reduce 40% in national carbon emissions starting in 2030. Another objective of the policy package is to reduce Americans’ energy costs. The 30% tax credit will enable 7.5 million more families to install solar panels on their rooftops. This saves them at least $300 yearly. The present administration claims that householders that purchase electric automobiles and use renewable energy sources can save more than $1,000 annually.

Solar energy will play a significant role in the decarbonization and onshoring of U.S. energy. By 2030, there will be 950 million solar panels, 120,000 wind turbines, and 2,300 grid-scale storage facilities. The solar industry can boost domestic manufacturing capacity, expand the solar workforce, and quicken the adoption of renewable energy.

The Investment Tax Credit extends for another ten years at a 30% rate for residential and commercial projects. For solar plants larger than 1 MW, the tax credit is at 6%. In addition to that, the main aim of the IRA is to combat inflation, lower energy costs, and advance climate goals. It will improve access and equity for those who need it most. Also, it will stimulate U.S. manufacturing to create millions of good-paying jobs.”

This law has significant provisions that relate to domestic manufacturing. The United States distributes $30 billion in production tax credits to companies that create solar panels, wind turbines, and batteries. The $10 billion in investment tax incentives will go toward solar panels, wind turbines, and electric vehicle manufacturing facilities.

Future of Renewable Energy Industry

Researchers from Princeton University, Dartmouth College, Evolved Renewable Energy Research, and Climate Impact Consulting calculated that the IRA could increase solar deployment from the current rate of 10 GW of capacity added annually by 2024 to nearly five times that amount, adding 49 GW of utility-scale solar annually.

The present prediction of $177 billion for solar investment could nearly double to $321 billion by 2030. According to the analysis, over the following ten years, the Act will lead to a total capital investment of close to $3.5 trillion in new American energy sources. The act anticipates a reduction in yearly energy spending in the US of at least 4% by 2030, saving consumers, businesses, and manufacturers more than $50 billion annually.