After passing the Inflation Reduction Act (IRA), the solar & wind energy industry will boost soon in the United States. According to the act, there will be 155GW addition in the industry. This will increase demand in both solar & wind industries.
Inflation Reduction Act Impact on Solar & Wind Industry
The Inflation Reduction Act (IRA) will result in an additional 155GW of wind and solar power deployments by 2030. However, The signing of the IRA has increased long-term solar forecasts. The 155GW of new renewable energy capacity will be made up of 70GW of utility-scale and 85GW of wind.
Also, The solar industry is trying to bring out itself from the anti-dumping import tariff investigation. Although, President Biden was responsible for putting this issue on hold for two years. However, The Uyghur Forced Labor Prevention Act demanded 3GW of PV modules at the port.
Additionally, some IRA advantages are dependent on criteria for domestic content. It will take time for the US to increase energy panel production and its supply chain. Whether or not we actually reach 40 to 50GW of capacity is highly questionable at this point.
According to the report, it will take until 2024 for the solar industry to start taking advantage of the IRA. The study group has also stated that the new act will have a significant positive impact on offshore wind. On the other hand, it warns that there are not many wind turbine installation vessels available that can meet U.S. criteria.
Moreover, IRA is offering a 30% investment tax credit (ITC) or the per-kilowatt-hour Production Tax Credit through IRA (PTC). The PTC starts at 3/10th of a cent per kWh but rises to 1.5/kWh when the prevailing wage is applied. With inflation, that rate should rise going forward.
Overall, the Inflation Reduction Act will boost the solar and wind industry of the United States.