The Spending Plan That Has Solar Stocks Looking at Sunnier Days
Solar stocks performed well on Thursday after members of Congress announced they’d struck a spending deal that includes $369 billion for clean energy projects. If it passes, the legislation will be the largest climate spending package in the nation’s history.
Executives within the clean energy industry say the bill is a potential reprieve at a time when climate action is urgently needed. Titled the “Inflation Reduction Act of 2022,” reports indicate the plan would include funding for infrastructure and clean energy jobs.
Earlier in the month things looked less rosy for the solar energy sector. West Virginia Senator Joe Manchin, a key swing vote, had indicated he was opposed to including funding for solar in the spending package. At the same time, solar and other renewable energy businesses have faced rising raw material costs and supply chain disruptions.
The bill will now be considered by the Senate this coming week. It would extend the Investment Tax Credit for 10 years, as it’s scheduled to decrease at the end of 2022. Incentives for domestic manufacturing of solar equipment are also included. The package would also pave the way for expanded infrastructure surrounding electric vehicles, hydrogen, and nuclear power.
A Rising Sun
At the beginning of July, the BP (BP) Statistical Review of World Energy 2022 was published. It analyzes energy consumption trends on an annual basis. Primary global energy consumption grew 5.5% throughout last year to hit a record high — the fastest rate of growth observed since the early 1970s.
While fossil fuels accounted for 82% of 2021’s primary energy usage, renewable energy sources are on the rise. Wind power provided the largest contribution, but solar electricity consumption jumped 22% and hit a new all-time high. It stands to reason that number will continue to increase if Congress passes this spending package.
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