‘Inflation Reduction Act’ a Win for Renewable Energy, Won’t Help Inflation
In his prepared remarks, President Joe Biden called the 2022 Inflation Reduction Act (IRA) one of the most “significant laws in our history” and hyped it as a win for reducing inflation and tackling the “climate crisis.”
Likewise, Senate Democrats claim the IRA will “help fight inflation” while simultaneously lowering the cost of energy for Americans and “substantially” reducing greenhouse gas emissions.
Sen. Joe Manchin (D-W. Va.) departs the Senate floor following a vote on Capitol Hill in Washington on Aug. 6, 2022. (Anna Rose Layden/Getty Images)
The IRA is indeed a significant win for renewable energy—it includes $369 billion in incentives for renewable energy, allowing the “most aggressive action ever” to meet Biden’s climate goals.
However, non-partisan third-party analysts state that the bill’s impact on inflation is “negligible.”
Under certain scenarios, the IRA could make inflation worse, experts add.
Inflation Reduction?
On Aug. 16, Biden signed the 2022 IRA into law and touted it as the “biggest step forward on climate ever.”
“[The IRAs] going to allow us to boldly take additional steps toward meeting all of my climate goals,” Biden further stated at the signing.
Indeed, the IRA includes several significant tax credits, manufacturing incentives, and grants that Senate Democrats claim will lower energy costs for Americans.
They also claim the IRA will increase U.S. energy security by encouraging domestic production, help decarbonize the economy, support disadvantaged communities’ transition to cleaner economies, and support rural communities.
An array of solar panels and wind turbines. (Soonthorn/Adobe Stock)
Specifically, some of the tax credits in the IRA include a $9 billion energy rebate program, which would allow Americans to purchase or retrofit their homes with energy-efficient appliances. Plus, there are ten years of consumer tax credits for Americans to outfit their homes with rooftop solar, and energy-efficient heating and
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