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Last summer, in a meeting with business and labor leaders as Congress prepared to vote on the landmark Inflation Reduction Act, President Joe Biden argued that it would result in "the largest investment ever in clean energy and American energy security — the largest in our history." He added, "It will be the largest investment in American manufacturing as well."
Nine months since that law was passed in Congress, the private sector has mobilized well beyond our initial expectations to generate clean energy, build battery factories and develop other technologies to reduce greenhouse gas emissions.
The law is doing exactly what it was designed to do: encourage private investment in clean energy. Tax incentives make the investments attractive, but businesses, along with rural cooperatives, nonprofits and others, must judge whether investing their own money in a hydrogen factory or a wind farm will pay off. In the end, the law will be only as successful as their appetite to invest at a scale that will meaningfully reduce emissions warming the planet and increase the nation's energy security.
Over the past few months, we have begun to see how large that appetite may be. It seems clear already that the law will stimulate significantly more investment in clean energy than was at first thought possible while generating more revenue from high-income taxpayers to reduce the deficit.
But despite all the encouraging signs, still more needs to be done to achieve the nation's climate goals and energy needs. For instance, the often cumbersome and time-consuming process of siting and building clean energy projects must be streamlined. And Congress needs to take additional steps to reduce emissions from heavy industries like steel, cement and chemicals.
But let's first see how far the country has come since the IRA became law. Companies have announced at least 31 new battery manufacturing projects in the United States. That is more than in the prior four years combined. The pipeline of battery plants amounts to 1,000 gigawatt-hours per year by 2030 — 18 times the energy storage capacity in 2021, enough to support the manufacture of 10 million to 13 million electric vehicles per year. In energy production, companies have announced 96 gigawatts of new clean power over the past eight months, which is more than the total investment in clean power plants from 2017 to 2021 and enough to power nearly 20 million homes.