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New Energy World magazine logo
New Energy World magazine logo
ISSN 2753-7757 (Online)

What the Inflation Reduction Act means for green energy in the US

22/3/2023

8 min read

Feature

Row of onshore wind turbines set against pink and orange sunset Photo: Pexels
By 2030, roughly 40% of the US’ electricity is expected to come from wind, solar and energy storage

Photo: Pexels

Signed into law on 16 August 2022, the Inflation Reduction Act (IRA) is the US’ most significant climate legislation and the single largest investment in renewable power in the nation’s history. Sara Siddeeq reports on what the Act means for the US.

Over the last few decades, the US has lagged behind in clean energy production. The nation has experienced an 80% decrease in solar manufacturing over the past 10 years, while China has emerged as the dominant player in the solar supply chain. China is also the leading wind energy producer, renewable energy investor and minerals producer required for clean energy.

 

China’s monopoly has limited the US’ opportunities to diversify clean energy supply chains, foster more competition, create domestic manufacturing jobs and mitigate geopolitical risks.

 

In response, the IRA provides the US with $369bn of funding to support a more rapid transition to renewable energy. It introduces several new provisions while resembling elements of the Build Back Better Act (BBBA) and building on measures included in the Bipartisan Infrastructure Law. It is designed to revolutionise the renewable energy landscape by building in incentives that promote technological innovation and domestic manufacturing.

 

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