One year old US climate legislation is already giving a boost to clean energy technologies.

FRANKFORT, Kentucky. — ( — Recently, under the July sun, three men lifted solar panels to the roof of a spacious two-story home near the banks of the Kentucky River, a few miles upstream from the state capital, where lawmakers have been promoting coal for more than a century.

The U.S. Climate Act, passed a year ago, offers a 30 percent rebate on this plant through a tax credit, and it helps promote clean energy even in places where coal still provides cheap electricity. For Heather Baggett’s family in Frankfurt, this was a good deal.

“It’s not politically motivated for us,” Baggett said. “It really came down to finances, it made sense.”

On August 16, after the hottest June on record and a scorching July, America’s long-awaited response to climate change, the Inflation Reduction Act, turns one year old. In less than a year, this has attracted investment in a massive ramp-up of battery and electric vehicle manufacturing in the states. According to the American Clean Energy Association, nearly 80 major clean energy facilities have been announced, equivalent to the previous seven years’ investment.

“It seems like every week a new production facility is announced somewhere,” said Jesse Jenkins, a Princeton professor and project lead for the REPEAT project, who is actively involved in reviewing the law.

“All my life we’ve been talking about bringing manufacturing jobs back to America. We are finally doing it, right? It’s pretty exciting,” he said.

The IRA is America’s most significant response to climate change after decades of oil, gas and coal lobbying that stalled action as carbon emissions increased, making the world hotter and more dangerous. It is designed to encourage a clean energy buildup on a scale that will change the arc of US greenhouse gas emissions. It also aims to build domestic supply chains to reverse the former dominance of China and other countries in this vital sector.

One of the goals of the law is cleaner transportation, the largest source of climate pollution for the US. Siemens, one of the largest technology companies in the world, makes charging stations for electric vehicles. Executives say this harmonization of US climate policy is leading to increased demand for batteries.

“When the federal government makes investments, we reach the breaking point faster,” said Barbara Hampton, CEO of Siemens USA, adding that the company has invested $260 million in battery or battery projects in recent years.

The law also encourages the use of more types of batteries that feed electricity into the grid when the wind is light or at night when the sun is not hitting the solar panels. This could put the storage business on the same upward trajectory as solar a decade ago, according to Michael McGowan, head of North American private markets at consulting firm Mercer Alternatives.

Derrick Flacoll, North American Policy Specialist at Bloomberg NEF, noted that sales of the largest U.S. solar panel maker, First Solar, surged after the legislation passed, leading to a large backlog of orders.

“These are years and years of capacity already booked because people are optimistic about the U.S.-produced solar market,” he said.

The IRA also helps technologies that are expensive but promising for short-term decarbonisation.

Jason Mortimer is senior vice president of global sales at EH2, which makes large, low-cost electrolyzers, machines that extract hydrogen from water. Hydrogen as a clean energy is still in its infancy. “The IRA is accelerating the massive introduction of hydrogen by about four to five years,” which makes the US competitive with Europe, he said.

But these changes, as significant as they are, may be just the beginning, experts say.

“I think we will soon see a significant influx of investment in manufacturing related to wind and solar panels in the US,” Jenkins said, adding that in 2026-2028 the country will see the full impact of the law.

Other countries, some of which are ahead of the US in addressing climate change, have made further efforts of their own to accelerate the transition to clean energy. Canada has announced a policy to do so, and Europe has its own IRA-like measures to attract production.

“European and Japanese automakers are trying to think about how to change supply chains to try and compete,” said Neil Mehrotra, assistant vice president and policy adviser to the Federal Reserve Bank of Minneapolis and contributor to a US law report published by the Brookings Institution.

The Congressional Budget Office originally estimated that IRA tax credits would be worth about $270 billion over ten years, but Brookings says businesses can use the loans much more aggressively and the federal government can pay three or four times as much.

According to a new analysis by Princeton researchers, the law should cut emissions in the US — the country historically most responsible for greenhouse gas emissions — by as much as 41% by 2030. It’s not enough to hit US targets, but it’s a significant improvement.

But those important cuts in greenhouse gas emissions are in part at risk if the US electricity grid can’t grow enough to connect new wind and solar farms and handle new needs like mass vehicle charging.

Despite the new investment in the red states, not everyone likes it. Republicans have recently proposed repealing key elements of the law. And Frankfurt resident Jesse Decker, whose neighbor has solar panels, said he wouldn’t consider them and didn’t think the federal government should be “wasting money” on dubious climate programs.

The law also does not mean that warming oil and gas will disappear.

“Frankly, we’re going to be using fossil fuels for decades to come,” said Fred Eames, a regulatory lawyer at law firm Hunton Andrews Kurth.

On Baggett’s Rooftop, Nicholas Hartnett, owner of Pure Power Solar, is pleased that business is going up and homeowners are discovering solar when they see how they can reap financial rewards.

“You have the environmental side that governs the left, and then you have the option to use your own tax money that the government would otherwise take, which proves the right thing,” he said.


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