INFLATION REDUCTION ACT – ENERGY ISSUES

Most economists agree that the recently enacted Inflation Reduction Act will not actually impact inflation but it does contain provisions that will have a major impact on the energy industry including electric utilities. More than half of the spending in the bill - $385 billion – goes to climate and energy spending and tax breaks over the next five to ten years.

The bill includes extending the solar investment tax credit of 30% through 2033, extending the wind production tax credit through 2033, creation of a $30 billion loan/grant program to decarbonize the grid, creation of a interstate transmission line grant program and a new credit for qualified nuclear facilities. The bill also contains provisions designed to stimulate hydrogen production and a $7,500 tax credit to buy new electric vehicles along with a $4,000 credit for lower/middle income taxpayers to buy used electric vehicles.

Many of these provisions will benefit electric utilities. Look for a more detailed analysis in the next edition of the Voice.
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