$370 billion for clean energy infrastructure
Last month, the U.S. passed the largest piece of climate-focused legislation in the country’s history – amounting to a whopping $370 billion investment in clean energy infrastructure. By 2030, these investments will help the U.S. reduce emissions to 40% below 2005 levels. For those of us in the climate and energy sectors, this comes as a huge win – after much political debate, climate is finally getting the attention it deserves.
Investing $60 billion in domestic renewable energy
The Inflation Reduction Act includes a $60 billion investment in domestic renewable energy manufacturing, helping drive local production of wind turbines, batteries, solar panels, and other clean energy solutions. This investment provides manufacturers with necessary assurance of long-term financial support, reducing otherwise risky investments in new tech. With confirmed investment in clean energy for the foreseeable future, companies can focus on ramping up domestic production without fear of revenue loss.
Making room for clean hydrogen at $3/kg
Green hydrogen is the bright and shiny new thing in the energy community – and for good reason. Some estimates show that hydrogen could very well account for a quarter of the world’s energy supply by 2050. The Inflation Reduction Act will award producers up to $3/kg in tax credits for low carbon hydrogen, assuming certain requirements are met. By placing the price of green hydrogen on par with other energy sources, we can really begin to jumpstart the hydrogen economy.
An optimistic look at biogas
Biogas has a promising future – produced from waste materials, this alternative fuel can replace natural gas and be used to power our vehicles. Biogas-producing operations, like landfills and anaerobic digesters, will receive additional tax credits, making biogas more aligned with solar and wind energy. Going forward, this will increase business and investment opportunities for those in the biogas industry.
Tax incentives for clean energy and EV
The legislation offers a wide variety of tax credits to accelerate the adoption of low carbon technology. Clean energy companies will be given financial incentives to incorporate more renewable sources in the grid, including solar, wind and battery storage technologies. At the same time, individual consumers will be incentivized to install heat pumps, adopt solar, and purchase electric cars. For companies and investors targeting these sectors of the market, these tax incentives will help drive widespread adoption of their tech and boost revenue, all while driving toward the overarching goal of reducing national emissions.
Tackling our methane problem (84X more potent than CO2!)
Did you know that methane is about 84 times more potent of a greenhouse gas than carbon dioxide over a 20 year timeframe? Unfortunately, this pesky gas is quite leaky, and is emitted throughout all phases of oil and gas production. The Inflation Reduction Act sets hard limits on methane leakage from oil and gas industry, enforcing fees for offenders. There are several up and coming companies focused on exactly this issue – monitoring, locating, and fixing methane leaks at the source. We will likely see a boom in these types of services in the coming years.
Oil and gas is here to stay?
Notably, the Inflation Reduction Act poses no real threat to oil and gas, as previously feared by the industry. In fact, the legislation paves the way for future drilling, opening up 20 million acres of federal land and 600 million acres of ocean for oil and gas leasing. Without this provision, the Interior Department would be prohibited from releasing new right-of-way grants for solar and wind energy.
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