The 3 big wins for businesses in the Inflation Reduction Act
Last week, President Biden signed into law the largest investment to combat climate change ever passed by Congress. The nearly $369 billion in climate and clean energy provisions in the Inflation Reduction Act (IRA) include grants and tax credits that will bring down emissions and set the long-term investment certainty to secure the transition to a clean energy economy. Business voices were instrumental in securing the passage of this historic legislation with example after example of companies showing true climate leadership. Now that the IRA has been signed into law, here are 3 benefits for businesses worth celebrating.
1. The IRA’s investments will prime the market for clean energy, clean manufacturing, and zero-emission transportation, enabling companies to meet their ambitious net zero goals.
Every company with climate goals is counting on the availability and affordability of clean energy. The IRA puts the modernized grid within reach and has cleared the way for companies to meet climate pledges by expanding tax credits for things like new wind turbines, solar panels and batteries. These credits, combined with investments in new clean energy innovation and transmission infrastructure – will accelerate the accessibility of renewable energy for the private sector, especially for those in rural areas.
For companies that own and operate medium and heavy duty vehicles, fleet electrification is a high impact opportunity to drive down their emissions. The IRA will unleash critical investments and tax credits for the manufacturing and purchasing of heavy-duty vehicles that will make it easier for companies to electrify their fleets. Additionally, tax credits for charging infrastructure will complement the important investments in the Bipartisan Infrastructure Law.
2. The IRA provides long-term investment certainty that businesses need in the transition to clean energy.
The new law provides the stable, long-term incentives needed to drive manufacturer and purchaser investments in clean energy. For example, the IRA extends the investment and production tax credits for renewable energy and storage for a decade; these credits were previously limited to one to three years, making future planning difficult. Also, the IRA shifts in 2025 to technology-neutral tax credits, giving utilities and power operators stability and options to maximize their facilities’ long-term clean energy potential.
3. The IRA’s investments will boost American competitiveness, strengthen domestic supply chains, and create millions of jobs.
The law secures American supply chains by investing in new and adapted manufacturing facilities. The law supports the domestic production of everything from batteries to heat pumps and sets up American businesses to compete in the global energy economy. The by-product of this support? The opportunity for businesses to create millions of jobs across the country, especially in communities that need it most.
The Inflation Reduction Act is a transformative investment in communities and business, and a historic step forward in meeting national and enterprise level climate goals. However, the work is not over. The private sector has shown how powerful it can be in shaping climate policy. Business voices will continue to be instrumental in advocating for the additional policies needed – from executive agencies to state and local governments – to put the US and American businesses on a path to rapid decarbonization over the next decade and beyond.