The United States Congress recently passed the Inflation Reduction Act, otherwise known as the IRA, and President Biden signed it into law on August 16, 2022.
One of the core focal elements of the bill is investments in clean energy. One way to do this is to offer consumers tax incentives and rebates for purchasing energy efficient goods such as electric cars and appliances. Another way is to invest in businesses that build clean energy goods and develop new technology.
Development of Clean Hydrogen – Green hydrogen and Blue hydrogen – is one of the major positive results of the Inflation Reduction Act. There is now an economic incentive for major companies to develop sources of clean hydrogen. As the supply of cheaper clean hydrogen increases, new use-cases will be found and ultimately a much larger market for clean hydrogen will develop. Once that market is created, the subsidies may be removed and the market can become self-sustaining. Hydrogen is a wonderful fuel source, but in addition to cost, creating enough hydrogen fuel in a clean way has been a major barrier.
Here are just a few of the incentives that the Inflation Reduction Act provides to consumers:
- $1,000 electric vehicle tax credits for families.
- $14,000 in direct rebates for energy efficient appliances such as heat pumps.
- 30% tax credit on solar roof installations
- $7,500 tax credit for new electric vehicles and $4,000 for used electric vehicles
Direct investment in the Clean Energy Industry, made possible by the Inflation Reduction Act, will result in:
- 950 million solar panels by 2030
- 120,000 wind turbines by 2030
- 2,300 grid-scale battery plants by 2030
- Support rural electric cooperatives that serve 42 million people
To read some of the highlights of the Inflation Reduction Act, see this publication by The White House.
To see a summary of the budgetary costs and savings of the Inflation Reduction Act (IRA), see this publication.
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