Inflation Reduction Act Fuels Record Investment in US’ Clean Energy Sector

Over $150 billion received for utility-scale clean energy projects since August 2022


The American Clean Power Association (ACP) said that the utility-scale clean energy sector in the U.S. has received investments of over $150 billion since the Inflation Reduction Act (IRA) was signed into law in August 2022.

ACP estimated that the amount is equivalent to five years’ worth of American clean energy investments. The funding has surpassed the total investment into U.S. clean power projects commissioned between 2017 and 2021.

One of the most visible impacts of the IRA is the boom in clean energy manufacturing, as it provides tax credits and grants for renewable energy projects.

The past eight months saw the announcement of 46 clean energy manufacturing facilities, including new projects, expansions, or reopening of existing facilities.

These projects include 26 solar manufacturing facilities, ten battery storage factories, eight wind manufacturing facilities, and two offshore wind supply chain projects. These are expected to create 18,000 manufacturing jobs in the U.S.

States that will see new or expanded factories include Alabama, Arizona, Colorado, Georgia, Iowa, Michigan, Minnesota, New Mexico, New York, Ohio, Tennessee, and Texas.

The IRA also benefits consumers by lowering their electricity bills.

Nearly $4.4 billion in savings were also announced for over 24 million customers served by utilities building out more clean power. In addition, 96,000 MW of new clean power capacity was announced.

New federal incentives for clean energy are expected to double the clean energy workforce and power the equivalent of every home in America by 2030.

“The clean energy transition is racing ahead. American companies are making massive investments increasing American competitiveness and revitalizing the manufacturing sector,” said Jason Grumet, CEO of American Clean Power.

“But we cannot build a strong, modern, and resilient economy absent dramatic improvement in the permitting of new energy infrastructure. The American private sector has the technology, resources, and workforce to build a clean energy economy and deliver affordable, reliable, clean power to American families and businesses. We need Congress to create a permitting system equal to the challenge and designed to succeed,” Grumet added.

However, ACP warns that the opportunity to build out clean energy resources significantly must be accompanied by expediting and streamlining the permitting process. Failure to do so will put 100 GW of clean energy at risk of a significant delay, along with 150,000 jobs.

Total corporate funding in energy storage, including from venture capital (VC), public market, and debt financing, amounted to $2.2 billion in 27 deals in the first quarter (Q1) of 2023, a drop of 83% year-over-year (YoY) compared to $12.9 billion raised in 27 deals, according to Mercom’s Q1 2023 Energy Storage & Smart Grid Funding and M&A Report.

While total corporate funding for solar companies, including from VC, public market, and debt financing, amounted to $8.4 billion in 42 deals in Q1 2023, up 11% YoY compared to $7.5 billion raised in 49 deals, according to Mercom’s Q1 2023 Solar Funding and M&A Report.