36. The Inflation Reduction Act: What it Means for the Renewable Energy Market
Right now, the solar industry has the strongest tailwinds it’s seen in years. Given the newly passed Inflation Reduction Act (IRA), which includes numerous provisions to increasingly incentivize investments in clean energy and further spur the renewable energy transition, it’s clear that there has never been a more important time for clean energy.
These tailwinds are so strong, in fact, that the latest research coming out of global research firm, Wood Mackenzie, indicates tremendous growth across the U.S. solar industry in the next five years. In the U.S. Solar Market Insight Q3 2022 report, researchers from both Wood Mackenzie and the Solar Energy Industries Association (SEIA) project that, with the help of the IRA, the national solar market will grow by 40 percent. And by 2027, “cumulative solar installations across all market segments will nearly triple in size.”
The data speaks for itself. We’re entering a period of great opportunity for solar and clean energy – opportunities that can make a significant impact on climate change and inequality.
“This is a monumental moment, not only for clean energy, but for meaningful action on the climate crisis,” says Sunwealth CEO, Jon Abe. “The IRA will provide a decade of stable policy support for our industry, and Sunwealth is growing the supply of investable, impactful and community-based solar that is bolstered by this legislation.”
While legislators iron out the details of the IRA, there’s been a lot of coverage around the law and how it will play out in real time for clean energy projects and investments. In the coming weeks and months, Sunwealth will leverage our collective in-house project development, finance, and investment expertise to cut through the commotion and provide insight on elements of the IRA that we feel aren’t garnering enough attention: the investment tax credit (ITC) adders. These adders will enable investors to maximize the benefits of investing in solar.
In the meantime, we encourage you to check out our blog on what the IRA means for Regional and Community Banks, as well as these trusted resources:
Key tax provisions of the Inflation Reduction Act of 2022, CohnReznick
Inflation Reduction Act: Renewable energy tax incentives, CohnReznick
And most importantly, we encourage you to reach out with any questions – this is our bread and butter, and we’re here to help navigate this changing landscape for our partners.
Christian Morris is Sunwealth’s Marketing and Investor Development Associate. Prior to joining Sunwealth, he led communications for a Boston-based research and advocacy nonprofit focused on climate policy.