Act to Reduce Inflation Significantly Benefits Solar Power and Electric Cars

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TL/DR –

The Inflation Reduction Act (IRA) is identified as a major driver for the growth in US solar power, with the US Solar Energy Industries Association (SEIA) claiming the act accelerated solar power capacity. SEIA data showed that solar industry installations increased by 37% in 2023, accounting for 53% of all new electric generating capacity added that year. The IRA also helped boost the electric vehicle (EV) industry by bringing back tax credits for EVs, incentivizing US EV production and contributing to reshoring manufacturing jobs in the US.


How the Inflation Reduction Act Boosts Solar Power and EVs

The Inflation Reduction Act (IRA) is not just the most significant reshoring, climate, and manufacturing legislation in US history, but it also supports the shift to solar power and electric transport. According to the US Solar Energy Industries Association (SEIA), the IRA is significantly boosting solar power.

Solar Power Growth Thanks to IRA

The US solar industry added a record 32.4 gigawatts (GW) of new electric generating capacity in 2023, a 37% increase from 2021 and a 51% increase from 2022, notes SEIA. Renewable electricity accounted for over 50% of annual capacity additions for the first time in 80 years. SEIA emphasizes that the IRA played a significant role in this success and future solar power growth.

SEIA president and CEO Abigail Ross Hopper said, “If we stay the course with our federal clean energy policies, total solar deployment will quadruple over the next ten years. The Inflation Reduction Act is supercharging solar deployment and having a material impact on our economy.”

The Role of IRA in EV Sales Growth

The IRA has also helped increase Tesla sales by bringing back the expired US tax credit for EVs, with the exception of trims that use batteries produced in China. For the first time, the IRA includes subsidies for used electric cars, significantly stimulating interest in the EV market.

According to an analysis, the IRA has driven more than $92 billion of investment into EV production, creating 84,000 jobs. It has also incentivized US EV production and production throughout the EV supply chain. The IRA offers U.S. automakers a path of continued global relevance, and, fortunately, it seems to be working.”

The IRA is stimulating massive growth in solar power equipment production and solar power generation, and it is doing the same in the electric vehicle and battery industry. This is just the beginning, with even bigger things expected by 2030.

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