In the wake of the Inflation Reduction Act, a new analysis reveals a significant private sector response, multiplying government investments in clean energy nearly fivefold.

Syris Valentine reports for Grist.

In short:

• The private sector’s contribution of $5.47 for every government dollar has led to a surge in clean energy investment.
• Federal tax credits primarily fuel the $34 billion in government spending, with overall investments spanning various technologies.
• Despite substantial investment growth, experts caution that current levels may not suffice to meet the U.S.’s ambitious climate goals.

Key quote:

“It’s proving the value of the federal government taking the lead, putting in place policy that says, ‘This is the direction that we’re headed: supporting decarbonization, supporting clean energy.’”

— Hannah Hess, associate director of climate and energy at Rhodium Group

Why this matters:

The Inflation Reduction Act has catalyzed unprecedented investment in clean energy, underlining the federal government’s pivotal role in steering economic transitions toward sustainability. This movement signals a robust push towards decarbonization and energy innovation, crucial for meeting national and global climate targets.

After passage of the Inflation Reduction Act, those in the trenches working on climate mitigation, climate solutions, clean energy and climate justice began to feel optimistic about their goals.