President Biden signed the historic Inflation Reduction Act (IRA) into law on August 16, 2022, which includes approximately $369 billion in clean energy and climate investment. Now that we’ve had a few months to dig in, we bring you a roundup of our favorite resources that have helped us understand the IRA’s role in accelerating the clean energy transition.
The United States aims to reduce greenhouse gas (GHG) emissions to 50% below 2005 levels by 2030 and net-zero by 2050. Several national efforts analyzed the IRA’s potential to hit those targets and generally agreed the bill would result in approximately 40% reduction of 2005 levels by 2030: 40% (U.S. Department of Energy); 31%-44% (Rhodium Group); 37%-41% (Energy Innovation); and ~42% (Princeton REPEAT Project).
Princeton University’s REPEAT Project provides some of the best technical resources related to the IRA. In addition to the preliminary report on the IRA’s impacts, the project published a second transmission report on the important role that electricity transmission expansion must play in unlocking the IRA’s full emissions reduction potential.
The REPEAT Project also put together a comprehensive summary of all energy and climate policies in the 117th Congress, which allows orcomparison between the IRA, the Infrastructure Investment and Jobs Act (akaBipartisan Infrastructure Law), and provisions in the proposed Build BackBetter Act, which was not passed.
Dave Roberts of Volts wasted no time getting into the weeds on the IRA and has produced five podcasts on the subject, along with full transcripts. These include conversations with the REPEAT Project’s Dr. Jesse Jenkins and UC Santa Barbara’s Dr. Leah Stokes.
Jenkins has also made appearances on Shayle Kann’s Catalyst podcast, discussing how the IRA will make clean energy technology cheaper, and the Ezra Klein Show for a less wonky conversation about both decarbonization in general and the IRA’s specific role in decarbonizing the U.S. economy.
Kann also has a second IRA-related podcast dedicated specifically to EVs and batteries, in which he speaks to Sam Jaffe about the IRA’s impacts on the American EV battery supply chain and how consumers and manufacturers can make use of EV tax credits.
How the IRA could Accelerate Building Decarbonization
The America is All In coalition published a report (beautifully illustrated by climate artist Nicole Kelner), which details the IRA building provisions, including rebates for high-efficiency appliances, such as heat pumps, the residential clean energy tax credit, and grants to support state and local governments in adopting building energy codes.
The report also includes recommendations for further actions that state, tribal, and local governments, as well as non-government actors can take to take full advantage of the IRA’s building provisions. RMI separately released an analysis on how the IRA could drive millions of retrofits, heat pump installations, and newly constructed efficient homes.
The BlueGreen Alliance focused its analysis on how the IRA provisions will simultaneously address climate change, create good jobs, and advance equity and environmental justice. They produced three fantastic factsheets on manufacturing, clean energy tax credits, and transportation, which detail relevant IRA provisions and how they will boost competitiveness and job creation.
The BlueGreen Alliance also released an amazing user guide that reviews goals, timelines, and implementation mechanisms (including helpful definitions for the types of funding mechanisms) for various policy areas included in the IRA. This report does a deeper dive into provisions that will help grow good jobs and a fair and just economy alongside a stable climate and clean environment.
Rewiring America provides another treasure trove of IRA resources, including their IRA Guide (complete with helpful explanations of electric appliances), an Electric Explainer of key IRA programs, and a Household Savings Memo.
Rewiring America estimates that a household could save $1,800 annually by taking advantage of IRA incentives to replace furnaces and water heaters with heat pumps, buy an electric vehicle, and install household solar panels. To find out which incentives your household is eligible for and how much you can save, Rewiring America created a handy IRA Calculator.
Lastly, Rewiring America appeared on a recent webinar hosted by Electrify Now called The Inflation Reduction Act - What’s in it for you?, in which panelists discussed how households and clean energy appliance manufacturers can take advantage of incentives within the IRA.
We have been closely tracking what the IRA could mean for environmental justice communities, as well as our region’s rural and Tribal communities.
Canary Media posted an article detailing some of the most impactful environmental justice investments in the IRA, including $15 billion of the Greenhouse Gas Reduction fund (also called a “green bank”) that is set aside for low-income and disadvantaged communities; $3 billion in grants for community-led environmental and climate justice projects; $1 billion to make affordable housing more energy-efficient; rebates that low-income families can take advantage of for home electrification; and more.
With regard to rural and Tribal communities, a White House Fact Sheet explains some of the IRA provisions that can support rural clean energy development, including direct-pay clean energy tax credits now available to rural electric cooperatives and an expansion of the USDA’s Rural Energy for America Program (which coincidentally was featured in CETI’s recently released short film, Harvesting the Sun).
While this is by no means a comprehensive list, these resources offer a starting point to understand the IRA’s complex provisions. It will be up to states and local governments to realize the IRA’s full promise to rebuild American manufacturing while reducing GHG emissions and creating millions of good jobs.
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