US intensifies efforts in climate preservation: Biden's Inflation Reduction Act takes center stage

The Inflation Reduction Act (IRA), passed by the US Congress in August 2022, has catalysed a significant surge in the clean energy sector. This historic piece of legislation, aimed at growing quality jobs for the middle and lower-middle classes, has been instrumental in the green transformation of various industries.

In the first quarter of 2023, commercial solar grew by an impressive 35 percent, accounting for 54 percent of all new electricity-generating capacity added to the US grid. This growth is a testament to the Act's impact, as the renewable energy sector has experienced substantial growth under its auspices, as enthused by GreenBiz.

The private sector has announced approximately $240 billion in new clean energy manufacturing investments since 2020. Of this, over $110 billion has been earmarked for new clean energy manufacturing, with over $70 billion directed towards the EV supply chain and over $10 billion towards solar manufacturing.

The IRA has also stimulated the production capacities of major U.S. firms in nuclear energy, hydropower, wind energy, solar energy, energy storage systems, and lithium batteries. However, specific company names are not detailed in the provided search results.

The Act's success in achieving its goals depends on the number of stakeholders that take advantage of its offers. One notable beneficiary is the automotive industry, with automakers GM and Ford using the act's battery production tax credit to build new battery plants across a "battery belt" from Michigan to Georgia.

The IRA aims to turn 80 percent of US electricity clean and cut greenhouse gas emissions by 50-52 percent below 2005 levels by 2030. The Act's influence is evident in the surge of EV passenger model sales, which exceeded the same quarter last year by 79 percent in the first quarter of 2023. Sales are expected to surge by 50 percent in 2023.

The IRA covers a wide range of projects, including clean energy generation and manufacturing, electric vehicles, home energy efficiency upgrades, building efficiency, advanced manufacturing, and more. The Act is providing a significant subsidy boost for the US energy transition market. However, unlike Europe, the US has fewer levers for pushing industries to switch to low-carbon energy sources, such as a carbon trading system.

The passage of the IRA was achieved with a narrow margin, securing one vote in the Senate from West Virginia senator Joe Manchin. In one year, the IRA created over 170,000 clean energy manufacturing jobs in 44 states, including predominantly Republican-voting states.

The IRA is old-fashioned industrial policy, devoting massive sums of money to buildout new industrial sectors. It is the single-most important measure in US history for climate protection. The Act is not just a boost for the clean energy sector, but a crucial step towards a more sustainable future for the United States.

US intensifies efforts in climate preservation: Biden's Inflation Reduction Act takes center stage