Renewable energy is set to experience an unprecedented boom in the United States following its first-ever climate bill, with the capacity of solar and wind projects expected to double by the end of the decade and supply the essentials of total electricity supply in the United States, according to a new analysis has shown.
Passage of the legislation, known as the Inflation Reduction Act (IRA), will help propel the United States to the forefront of the clean energy economy, experts predict, helping to compete with China in the manufacture and installation of solar panels, wind turbines, batteries and emerging zero-carbon technology.
Tax credits contained in the bill’s $370 billion in climate spending are expected to help double installed wind and solar power capacity by 2030, according to an updated analysis by research firm Energy Innovation. This additional resource could allow clean electricity to supply between 72% and 85% of the total supply in the United States at that time, increasing from 795 to 1,053 gigawatts of combined solar and wind capacity.
“This bill is going to make it very cheap to create clean electricity – you’re going to get an incredible amount of solar and wind deployment,” said Robbie Orvis, senior director of analysis at Energy Innovation.
“This will really unleash investments in renewable energy. He has all the incentives to grow the industry in the country. It is a real springboard for renewable energies.
About $180 billion in additional renewable energy investment could be spent by 2030, according to Energy Innovation. A separate research group, Rystad Energy, has provide even more will be funneled into the sector – around $270 billion – leading to hundreds of thousands of new jobs. “The Cut Inflation Act is a game-changer for the U.S. wind and solar industry,” said Marcelo Ortega, renewable energy analyst at Rystad.
Previously, wind and solar developers had to rely on short-term tax breaks and partner with banks or other large institutions. The new bill provides the certainty of a 10-year tax credit program and allows the credits to be transferable to the promoters themselves. There are also billions of dollars for domestic manufacturing of clean energy components, as well as rebates for people who buy electric cars.
The White House said the legislation will save the country up to $1.9 billion in climate-related costs by mid-century through reduced deaths and property damage from extreme heat, flooding, drought and forest fires. Joe Biden called the bill a “historic moment” and pledged to cut US emissions in the middle of this decade.
Climate activists hailed the legislation as a long-awaited breakthrough, although they criticized aspects of the legislation that open up large areas of public land to oil and gas drilling. The concessions to fossil fuels were born out of a compromise reached with Joe Manchin, the centrist Democrat and key Senate vote who has received more money in donations from the oil and gas industry than any other senator.
Yet even with the additional land and water devoted to drilling, several different analysts have predicted that the United States should reduce its global warming emissions by about 40% by the end of this decade, boosting the global effort to avoid disastrous climate change.
Such predictions, however, could be hampered by variables such as supply chain issues currently hampering electric vehicle production, economic downturns, problems building transmission infrastructure to transport clean electricity across the country and the resistance of local communities to new wind and solar energy. developments.
“Every number should be taken with a big grain of salt. There are a lot of big assumptions, but taken together these analyzes all show that this bill is a big deal and I agree with that,” said James Stock, an economist at Harvard University.
“We need to make sure these projects get built – if we get into the stalemate of traditional American projects, that’s going to be a problem. But it promises to be a transformative moment – we’ll see decarbonization this decade, which is very exciting.
The spending is expected to catch the eye of China, a leader in clean energy generation. “It’s clear that the Cut Inflation Act will kick the clean energy race into high gear,” said Gernot Wagner, climate economist at Columbia Business School.
“The specific impact, of course, is anyone’s guess. This is especially true because the IRA is not just a continuation of past policies. It’s a political tipping point – and a silver lining too.