As the new administration sets its policy agenda, policymakers are debating the future of the Inflation Reduction Act (IRA), which was signed into law by the Biden administration in 2022. A new independent study found that the IRA will deliver significant economic benefits for the United States — growing the economy by $1.9 trillion over the next 10 years. Released in December 2024, the study says that the IRA will spur $3.8 trillion in net spending across the U.S. economy, creating a four-time return on taxpayer investment when considering economic and emissions benefits.
The report titled Economy-wide Impacts of the Inflation Reduction Act (IRA) Energy Provisions — commissioned by the American Clean Power Association (ACP), a trade organization, and produced by ICF, a nonpartisan, nonpolitical strategic consulting firm — analyzed the broad impacts of the IRA’s energy tax credits. It found that the law will incentivize major investments, create millions of jobs, and spur economic growth.
Graphic Courtesy American Clean Power
According to the study, the law is expected to create 13.7 million jobs over 10 years and add $846 billion to household incomes, significantly boosting the U.S. labor market and improving the financial well-being of millions of Americans. The report also says during those 10 years, the U.S. gross domestic product (GDP) is expected to grow by an annual average of 0.6%.
“These provisions are catalyzing tremendous private sector investment in new manufacturing and energy infrastructure that will keep our economy competitive for decades to come and ensure the U.S. leads the world [in] developing technologies to bolster energy security while also reducing emissions,” Marty Durbin, senior vice president for policy at the U.S. Chamber of Commerce, said in a statement.
Photo Courtesy Nuclear Energy Institute
The study examines the impact of the IRA across power, transportation, buildings, sustainable aviation fuels, hydrogen, and manufacturing since the law was passed in 2022. It found that economic benefits were felt throughout the energy sector, positively impacting a broad range of renewable resources such as oil, gas, hydrogen, nuclear energy, and battery storage systems — evidenced by a “substantial” increase in domestic clean energy system manufacturing.
“The clean energy tax credits have significantly increased domestic energy production, revitalizing communities across the country and lowering consumer energy bills,” Jason Grumet, ACP chief executive officer, said in a press release. “By supporting our nation’s diverse array of energy resources, the IRA is strengthening our national security and enhancing economic competitiveness.”
Photo Courtesy National Hydropower Association
ACP is joined in supporting the report findings by five organizations, including the U.S. Chamber of Commerce, the Edison Electric Institute (EEI), the National Electrical Manufacturers Association, the National Hydropower Association, and the Nuclear Energy Institute. Their endorsement is outlined in a letter accompanying the study.
“Energy tax credits are driving innovation and job creation in communities across the country,” Pat Vincent-Collawn, EEI’s interim president and CEO, said in a statement. “This study further demonstrates how essential these tax credits are for U.S. economic competitiveness and for our member companies’ efforts to help keep electricity bills as low as possible for our customers.”
