Think the Inflation Reduction Act is all about inflation? Think again. Dive into our latest article to discover how it's supercharging the renewable energy sector.
A year in, and the Inflation Reduction Act (IRA) appears to be having a significant impact on the U.S. economy — but maybe not in the way you’d expect. Turns out, the act is less about reducing inflation and more about finding new ways to generate economic growth.
President Joe Biden is having namer's remorse over the Inflation Reduction Act (IRA), which marked its first anniversary on August 16. "I wish I hadn't called it that," he said at a recent fundraiser, "because it has less to do with reducing inflation than with providing alternatives that generate economic growth."
A big part of that growth? Clean energy. The IRA has unlocked billions of dollars in tax credits for consumers and companies. For consumers, these credits make electric vehicles more affordable. For companies, the benefits come from incentives to produce renewable energy, thereby accelerating the nation’s journey to a decarbonized power sector. According to the White House, the law has already created 170,000 jobs in clean energy and is projected to create 1.5 million more over the next decade.
Many independent analysts back the legislation's potential for economic impact. A recent Bank of America report found that over 270 new clean energy projects have been announced since the act passed, with investments totaling $132 billion. Of this, roughly half is allocated to electric vehicles and batteries, while the remaining is invested in renewable energy sources like solar, wind and nuclear. These projects alone could create 86,000 jobs.
making the most of the IRA: a guide for clean energy firms
As the Inflation Reduction Act begins to reshape the economic landscape, renewable energy companies have a unique window of opportunity. Most analysts expect the most significant impacts of the IRA to be seen in 2024 and 2025. So, there's no time to waste. Here are some practical steps you can take:
apply for credits and subsidies early
One of the act's key features is its offering of tax credits and subsidies specifically for renewable energy projects, including solar, wind, hydro and geothermal. Given that these incentives have a limited pool of funds, you should apply as quickly as possible to secure them.
expand production and market share
With the IRA creating a more favorable tax structure for revenue generated from renewable sources, now is the ideal time to reinvest in your business. Consider broadening your production capacity by investing in cutting-edge equipment, facilities and skilled personnel to increase market share.
forge strategic partnerships
The IRA encourages collaboration with multiple stakeholders, including local governments, utilities and communities. Building these strategic alliances expands your reach and facilitates a smoother transition toward more sustainable energy systems.
innovate and diversify
The IRA is not just about expanding what already exists. It’s about pushing the envelope. Firms can take advantage of the act's support for research and development to explore new technologies and markets. Such exploration might include smart grid solutions, energy storage systems or electric vehicles.
But beyond credits, partnerships and innovation, there's perhaps one essential ingredient to make the most of the Inflation Reduction Act: renewable engineering talent. If you want to align your talent acquisition and retention strategies with the opportunities presented by the Inflation Reduction Act, Randstad can help. With our vast network of specialized candidates across the US, we can give you a competitive edge. Get in touch today to learn how we can support your contribution to the clean energy revolution.