The Winners and Losers of the Clean Energy Boom

By: Keith Wagstaff · April 12, 2024 · Reading Time: 3 minutes

Big Money

Talk about going green. Last year, as a result of the Inflation Reduction Act (IRA), the U.S. government spent $239 billion to encourage companies and consumers to embrace renewable energy, according to a report from Clean Investment Monitor, a joint project from MIT and Rhodium Group.

That’s a 38% bump from the year before. And it seems to be working. Since the IRA was passed in 2022, the rate at which CO2 is being reduced has doubled. By 2031, federal government spending on clean energy could reach $1.2 trillion, according to an estimate from Goldman Sachs.

On the Rise

These are the clear winners of the IRA-sponsored boom: solar energy, electric vehicles (EVs), and battery technology. Companies and manufacturers benefited from a mix of direct payments and tax incentives.

Most of the money spent on manufacturing involved the EV supply chain, from battery production to vehicle assembly. And when it comes to energy projects, solar farms and storage won big in scoring federal help, although connecting them to existing power grids remains a challenge.

Left Behind

Carbon capture and hydrogen projects, favored by the oil and gas industry, haven’t fared as well in comparison. The former involves capturing emissions from factories and power plants, and then reusing or storing the CO2. The latter involves producing hydrogen, which can be used as fuel for transportation and heating, and only emits water and air.

In general, the IRA has favored totally renewable projects over those that extend the lifespan of existing oil and natural gas facilities.

What It Means For You

Even if you don’t invest in clean-energy companies, the IRA could affect you. Consumers may be able to earn tax credits for installing solar panels and heat pumps at their homes. And they can save up to $7,500 on a new EV, provided the buyer and vehicle meet a list of requirements.

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