The “Inflation Reduction Act” (IRA) is the largest climate protection package in the USA to date and thus also has an impact on the solar industry. Since the IRA was passed, US solar and storage companies have announced over $100 billion in investments. Manufacturing of solar and storage systems is booming in the US, with 51 photovoltaic (PV) factories announced or expanded in recent years. These new factories will invest nearly $20 billion in American communities, the Solar Energy Industries Association (SEIA) calculates in a new analysis.
The Biden administration’s “Inflation Reduction Act” (IRA) is the largest climate protection package in history at $369 billion and comes with massive subsidies for everything to do with renewable energy. There are stately subsidies for e-cars, for example, but also for power plants and the like. The subsidies are so attractive that more and more companies and start-ups from Europe are turning to the USA because they can produce cheaper there.
For the US in the energy transition, however, the IRA is quite positive, especially for the PV industry. Since the IRA was passed, a total of 155 gigawatts (GW) of new production capacity has been announced along the entire solar value chain. This includes solar module capacities, solar cells, silicon ingots and wafers, and inverter capacities. Additionally, 65 GWh of energy storage capacity has been announced at 14 new or expanded facilities. “In 10 years there will be enough solar installed to power every home east of the Mississippi,” according to the SEIA.
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Over the next 10 years, the IRA will result in 48% more solar installation than would be expected without the IRA, the SEIA said. By 2033, the US will have a total installed solar capacity of 669 GW, more than four times today’s capacity. By 2031, solar power will generate more electricity than all U.S. coal-fired power plants in 2022.
“The IRA will add an additional 160 GW of solar capacity over the next 10 years and generate over $565 billion in new investment. Annual CO2 savings from the solar industry will increase from 169 million metric tons to over 459 million metric tons by 2033. Employment in the solar industry will almost double in the next 10 years, from 263,000 now to 478,000 in 2033. The number of solar manufacturing jobs will increase to over 100,000 by 2033.
The IRA-sponsored solar installation will offset an additional 665 million metric tons of CO2 emissions over the next 10 years compared to a no-IRA scenario. By 2033, US solar installations will offset 459 million metric tons of CO2 per year, equivalent to 30% of the US power sector’s 2021 CO2 emissions.
The IRA is not without controversy. The EU in particular sees itself disadvantaged because US subsidies for green and climate tech could distort competition. The EU has therefore opposed the IRA with its own Net-Zero Industry Act (Trending Topics reported).
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