One year after its adoption, the Inflation Reduction Act (IRA) has resulted in significant strides in the adoption of renewable energy — but the U.S. still has work to do in order to reach President Biden’s climate goals.
New analyses demonstrate significant growth in the renewables sector as a result of the law, the most significant climate legislation in the country’s history. They also say, however, that the U.S. is not quite on track to meet its climate objectives.
The IRA provided significant tax credits for low-carbon and carbon-free energy sources including wind, solar, nuclear, carbon capture technology and biofuels, as well as for electric vehicles. It also contained other programs aiming to reduce emissions of the greenhouse gas methane from the oil and gas sector and fund climate-friendly projects in communities around the country.
Several analyses both public and private have indicated that the law is bolstering the deployment of renewable energy.
The Energy Department released a report Wednesday that was first shared with The Hill that shows the Democrats’ climate, tax and health care law, together with the Bipartisan Infrastructure Law, will enable the deployment of up to about 250 gigawatts of new wind energy and up to about 475 gigawatts of new solar energy.
The department has said 1 gigawatt is enough to power 100 million LED bulbs, so the new solar and wind enabled by these laws could power up to 72.5 billion bulbs.
Meanwhile, the American Clean Power Association, a renewable energy lobby group, recently issued a report finding that the year since the IRA’s passage saw more investment in the sector than the past eight years combined.
The group Environmental Entrepreneurs identified 210 “major” clean energy or clean vehicle projects announced in the past year and said the estimated 74,181 new jobs created by these projects represent “a sizable increase in annual employment growth in clean energy.”
And a new report from research provider BloombergNEF projects that wind and solar power will comprise just less than half of all power generation by 2035 and 64 percent in 2050 — a significant jump from the 12 percent they made up in 2021.
In total, the report projects that electricity coming from zero-to-low emission sources including wind, solar, nuclear and gas with carbon capture will make up 87 percent of the power grid by 2035.
“It has been incredibly impactful,” said Gregory Wetstone, president and CEO of the American Council on Renewable Energy, during a press call this week. “The IRA represents the most significant progress ever toward that vision of accelerating the clean energy transition.”
But the Energy Department report issued Friday also says that the U.S. is currently not on track to meet Biden’s climate goals.
That report says it expects U.S. greenhouse gas emissions to be 35 percent to 41 percent lower in 2030 than they were in 2005, not quite reaching the president’s goal of cutting emissions in half.
However, the report said that without the IRA and the Bipartisan Infrastructure Law, emissions would only reach 27 percent lower than 2005 levels, so it does appear that the climate law is making a difference.
Similarly, the Bloomberg report estimates that U.S. emissions will be 22 percent higher than Biden’s goal in 2030. In 2050, it projects they will be about 54 percent lower than they were in 2021 — a significant drop but still not the net-zero level Biden has said he hopes to achieve by midcentury. Its estimate for how much electricity will come from low-to-non carbon sources also falls shy of Biden’s goal of having an entirely carbon-free power system by 2035.
“For ambitious federal policies to translate to a sustained diversification away from fossil fuels, the hard work of building supportive physical infrastructure, streamlining permitting, and regulating reluctant parts of the economy remain,” the report states.
“Without a concerted push on these fronts, the US is unlikely to hit the targets that it has committed to under the Paris Agreement,” it adds.
Tom Rowlands-Rees, BloombergNEF’s head of North America analysis, told reporters Wednesday that the incentives or “carrots” provided by the IRA should be met with “sticks” or penalties that push industry to act in a climate-friendly manner.
“The IRA is all about positive incentives. It doesn’t force anyone to do anything,” Rowlands-Rees said.
“We appreciate that in Washington, it’s very hard to mandate things,” he added. “But it’s still worth trying because that is what is needed next.”
Senate Majority Leader Chuck Schumer (D-N.Y.) did acknowledge this week that there’s more work to be done on a press call.
“Our North Star in this bill was a 40 percent reduction by 2030 of carbon going into the atmosphere, but we obviously want to have to go much further than that,” he reportedly said, adding that “making our power, our electricity, as green as possible” was one key area Democrats could pursue.
Meanwhile, as they push for even greater renewable energy deployment, key players in the sector are pushing for a streamlined process for approving energy projects — an issue that has seen significant momentum in Congress and won some traction in a recent deal to lift the debt ceiling. Lawmakers are continuing to work on a broader agreement.
“We really have to get our act together on transmission and on … permitting and siting,” Heather O’Neill, president and CEO of Advanced Energy United, told reporters this week. “There are good congressional steps … that we need to happen.”