The Inflation Reduction Act: Two Years On
On August 16, 2022, the Inflation Reduction Act, the most comprehensive clean energy bill in U.S. history, was signed into law. Two years on, the private sector is driving a clean energy boom across the nation, with benefits that include the creation of tens of thousands of new manufacturing jobs, a more secure domestic energy future through the construction of at least 55 GW of new clean energy generation to meet our growing electricity demand, and cost savings for millions of families and businesses.
Thanks to the IRA, clean energy is leading a manufacturing resurgence in the U.S. A recent article in Forbes notes that the IRA has already spurred nearly $100 billion in private investment across 142 clean energy manufacturing projects, creating more than 80,000 jobs. States like Georgia, North Carolina, South Carolina, Michigan, Arizona, Nevada, Illinois, Indiana, and Louisiana have each seen at least $1 billion in new manufacturing investments or the creation of at least 10,000 new jobs.
As a recent article about the QCells solar panel facility in Dalton, Georgia points out, much of this manufacturing investment is occurring in parts of the country with a manufacturing heritage - helping to reinvigorate communities. In fact, IRA tax incentives have disproportionately spurred private investment in more conservative areas such as Northwest Georgia. Recognizing that energy tax credits included in the Inflation Reduction Act “have spurred innovation, incentivized investment, and created good jobs in many parts of the country ...and have enjoyed bipartisan support historically”, 18 House Republicans last week sent a letter to Speaker Johnson asking him to preserve them, further stating that “[p]rematurely repealing energy tax credits, particularly those which were used to justify investments that already broke ground, would undermine private investments and stop development that is already ongoing.”
The IRA is also helping families save money. In 2023 alone, 3.4 million families saved $8.4 billion in energy efficiency and clean energy home improvements through tax credits. These improvements not only reduce upfront costs but also lead to long-term savings on energy bills. For example, homeowners installing solar panels typically save $2,130 per year on their electricity bill. Replacing an inefficient heating system with a heat pump and upgrading your building to make it more energy efficient can save up to $3,100 in annually.
Finally, since the IRA was enacted, in addition to the 55 GW of new clean energy generating capacity that has been installed, an additional 300 GW in announced projects are on the horizon. The new capacity already online represents $75 billion worth of investments spread across the country. Perhaps most importantly, this surge in clean energy generation is essential in meeting our nation’s growing energy needs with clean, domestic production that increases our energy independence and national security.