Happy 1st Birthday to the Inflation Reduction Act! We’re excited to see homeowners around the country saving money and greening their lifestyles as a result of this historic legislation. It’s so encouraging to see how successful the law has already been at creating jobs, reducing carbon emissions, and fueling the clean energy future.
The IRA brings an opportunity for homeowners to more easily go solar, buy an EV, or electrify their homes. That’s super exciting on its own, but there’s so much more. It unlocks incentives for businesses and manufacturers to make meaningful investments in a clean energy economy, and has already moved the needle on climate change. Here’s an overview of the progress that’s been made in the year since the law passed, the path the legislation has set us on, and the incentives you can take advantage of as a result.
What is the Inflation Reduction Act and Why Does it Matter?
First, it’s important to know why the Inflation Reduction Act (IRA) is so impactful. From an average person’s perspective, it will positively affect your life, whether or not you take advantage of the incentives it offers. That’s because as people latch on to the law’s new tax credits and rebates, they will go solar or buy an electric car, and those actions will contribute to the reduction in greenhouse gases that are causing climate change. Every one of us will benefit from that. We’ll also benefit from the job creation and grid stability that solar supports, and the cleaner air that EVs make possible, just to name a few of the massive benefits the law brings about.
But equally important is the savings potential for everyday people who are strapped by inflation and would like to reduce their monthly bills. The tax credits and rebates help people take advantage of these greener options, which in the long run will give them more lifestyle security and lower their monthly payments for things like electricity, transportation, and home heating and cooling.
Specifically, the IRA provides homeowners with:
- 30% federal tax credit on solar panels and home battery storage through 2032.
- Tax credits and rebates on home energy efficiency efforts and electrification projects, like weatherization, or installation of a heat pump and induction stove.
- Tax credits and rebates on electric vehicle purchases, both new and used.
But the benefits don’t stop at our doorstep. They are wide-reaching, and have already affected the entire global economy. Below are a few fun facts about how the IRA has impacted the solar industry, as well as the DOE’s report on the overall impacts on the entire energy sector and on everyday people.
Solar & Storage Companies Add Over $100 Billion To U.S. Economy
The Solar Energy Industries Association (SEIA) recently published a report taking stock of the past year’s wins and projecting the IRA’s effects on solar in the next ten years. Here’s a snapshot of what they found:
The Last Year of Solar and Storage Growth
- In the last year, U.S. solar and storage companies have announced over $100 billion in new private sector investments.
- Solar and storage manufacturing is now surging in the United States, as 51 solar manufacturing facilities have been announced or expanded in the last year. Companies like Qcells, First Solar, and Maxeon have announced billions of dollars in energy projects.
- These new solar manufacturing facilities will invest nearly $20 billion into American communities.
- Since the IRA passed, 155 gigawatts (GW) of new production capacity has been announced across the solar supply chain.
SEIA’s Forecast for Solar Through 2033, With IRA vs. No-IRA
- Over the next 10 years, the IRA will lead to 48% more solar deployment than would otherwise be expected under a no-IRA scenario.
- By 2033, the U.S. will have installed 669 GW of total solar capacity, more than 4 times the amount installed today.
- By 2031, solar energy will produce more electricity each year than all U.S. coal-fired power plants in 2022.
- 10 years from now, there will be enough solar power installed to power every home east of the Mississippi.
- Over the next decade, solar industry employment will nearly double, from 263,000 today to 478,000 by 2033. Solar manufacturing jobs will swell to over 100,000 by 2033.
- Solar deployment spurred by the Inflation Reduction Act will offset an additional 665 million metric tons (MMT) of carbon emissions over the next 10 years when compared with a no-IRA scenario.
IRA and BIL Together Save US Homeowners 38B, and Reduce Emissions by 40%
In the bigger picture, it’s important to realize that the IRA is not just for solar. It is a far-reaching piece of legislation that affects every aspect of our lives. The U. S. Department of Energy issued a report recently that shows how the IRA and its companion, the Bipartisan Infrastructure Law (BIL) are revitalizing the U.S. energy system by investing in American energy supply chains, clean energy job creation, emissions reduction, and consumer energy savings.
Here’s a quick look at the DOE’s findings, and how the IRA and BIL are expected to change our lives within the next ten years. Together they will:
- Save American families up to $38 billion on electricity bills
- Reduce U.S. net greenhouse gas emissions 40% below 2005 levels by 2030
- Strengthen U.S. energy security by reducing net crude oil imports by nearly 60%
- Reduce industrial and manufacturing emissions up to 40% below 2005 levels
- Double the share of American electricity generated by clean sources to 80%
- Accelerate the electrification of the American vehicle fleet, with share of zero-emission light-duty vehicle sales reaching up to 65%
You can read the full report here.
Want to Learn How You Can Take Advantage of the IRA’s Benefits?
Reaching our climate goals can be achieved through various paths, but again, three main pillars stand out in our journey to net-zero. Click through to the following links to learn more about how each pillar works:
- First, we must embrace renewable energy.
- Second, we can boost energy efficiency,and
- Third, we can electrify our everyday lives to better take advantage of the clean energy we generate.
Thankfully, the IRA is making it easier for everyone to leverage these pathways in their lives and in business to make significant strides towards a brighter, greener future.
Get in Touch!
Click below or give us a call at (703) 343-9028 to see how you can be a part of the clean energy future today!
