One year ago, on August 16, 2022, President Biden signed the Inflation Reduction Act into law – the largest investment in clean energy and climate action ever. The Inflation Reduction Act is a transformative law that is helping the United States meet its climate goals and strengthen energy security, investing in America to create good-paying jobs, reducing energy and health care costs for families, and making the tax code fairer.
Just twelve months after the law was signed, it is already having a significant impact on American workers and families, and is delivering for underserved communities and those that have been too often left behind. Outside groups estimate the Inflation Reduction Act’s clean energy and climate provisions have created more than 170,000 clean energy jobs already, companies have announced over $110 billion in clean energy manufacturing investments in the last year alone, the law is delivering billions of dollars to protect communities from the impacts of climate change, and millions of seniors are saving money because their insulin is capped at $35 per month.
Today, to mark the anniversary of the Inflation Reduction Act, the Biden-Harris Administration is releasing a new feature on Invest.gov that highlights stories of how the Inflation Reduction Act and Bidenomics are making a difference for Americans in all 50 states and U.S. territories. Bidenomics is the President’s vision for growing the economy from the middle out and bottom up, including by investing in America, creating good-paying union jobs, and lowering cost for American families.
In the 12 months since the Inflation Reduction Act was signed into law:
- The private sector has announced more than $110 billion in new clean energy manufacturing investments, including more than $70 billion in the electric vehicle (EV) supply chain and more than $10 billion in solar manufacturing. Since the President was elected, the private sector has announced approximately $240 billion in new clean energy manufacturing investments.
- Investments in clean energy and climate since the Inflation Reduction Act was signed into law have created more than 170,000 jobs, and the law is projected to create more than 1.5 million additional jobs over the next decade according to estimates by outside groups.
- Public and private sector investments driven by the Inflation Reduction Act and the Bipartisan Infrastructure Law are expected to reduce greenhouse gas emissions by approximately 1 billion tons in 2030.
- The Administration has already awarded over a billion dollars to help communities become more resilient and protect them from the disastrous impacts of climate change, including drought, heat, and extreme weather.
- American families are projected to save $27-38 billion on their electricity bills from 2022-2030 relative to a scenario without the Inflation Reduction Act, according to new data released by the Department of Energy today.
- Nearly 15 million people are saving an average of $800 per year on their health insurance premiums, the nation’s uninsured rate has reached an historic low, and millions of seniors on Medicare are paying less in out-of-pocket costs for prescription drugs—including insulin, which is capped at $35 per month.
- The Internal Revenue Service (IRS) is strengthening enforcement against wealthy tax cheats and increasing recoveries from delinquent millionaires—while improving customer service for law-abiding taxpayers, including cutting phone wait times from 28 minutes last tax season to 3 minutes this year.
LARGEST CLIMATE INVESTMENT IN HISTORY
The Inflation Reduction Act is the most ambitious investment in combating the climate crisis in world history.
Today, the Department of Energy (DOE) released an updated study affirming the transformative climate progress driven by the Inflation Reduction Act and the Bipartisan Infrastructure Law. DOE estimates that the two laws will cut U.S. greenhouse gas emissions by up to 41 percent below 2005 levels by 2030.
Together with additional actions being taken by federal, state, and local governments as well as the private sector, the United States is now on a path to achieve President Biden’s ambitious goal of cutting emissions 50-52 percent below 2005 levels by 2030 and reaching net-zero emissions by no later than 2050. This is consistent with external researchers, who project that U.S. greenhouse gas emissions will fall 43-48 percent below 2005 levels by 2035 thanks to laws already on the books.
The Inflation Reduction Act is accelerating progress to meet America’s climate goals, build a clean energy economy, and strengthen energy security:
- The Department of Energy has estimated that the Inflation Reduction Act and Bipartisan Infrastructure Law will lead to greenhouse gas emissions reductions of approximately 1 billion tons in 2030.
- The Department of Energy found that the Inflation Reduction Act and Bipartisan Infrastructure Law are driving significant new clean electricity generation, enabling the United States to potentially reach 80 percent clean electricity by 2030.
- U.S. electricity generation from wind is expected to triple and solar generation is expected to increase seven- to eight-fold by 2030, according to Department of Energy estimates. Over the next seven years, we expect twice as much wind, solar, and battery deployment as there would have been without the Inflation Reduction Act.
- EV sales have tripled since President Biden took office, spurred in part by investments in the Inflation Reduction Act to boost clean energy manufacturing and lower EV costs for American families.
- Federal agencies have worked to embed equity and environmental justice into their grant programs to ensure low-income and disadvantaged communities will benefit from the Inflation Reduction Act, in alignment with the President’s Justice40 Initiative. The Environmental Protection Agency (EPA) alone has made $650 million available for environmental justice projects to reduce pollution and build the capacity of community-based organizations and local governments to plan and implement projects in their neighborhoods. And two-thirds of EPA’s $27 billion Greenhouse Gas Reduction Fund will flow to low-income and disadvantaged communities.
- Philanthropic organizations, impact investing organizations, and intermediaries have committed at least $1.6 billion to support the implementation of the clean energy and climate provisions of the Inflation Reduction Act, ensuring more direct access to critical technical assistance for underserved communities so that they can realize the full benefits of the law.
In addition to building America’s clean energy future, the Inflation Reduction Act will strengthen the resilience of communities across the country and protect them from dangerous and disastrous impacts of the climate crisis.
- The National Oceanic and Atmospheric Administration (NOAA) awarded $562 million, jointly funded by the Inflation Reduction Act and Bipartisan Infrastructure Law, for nearly 150 projects across 30 coastal states and territories to make communities and local economies more resilient to climate change.
- NOAA also launched an innovative $575 million competition, the Climate Resilience Regional Challenge, to support projects that build the resilience of coastal and Great Lakes communities to extreme weather and other impacts of climate change.
- DOI’s Bureau of Reclamation has announced more than $514 million to address the historic drought in the Colorado River Basin.
- The U.S. Forest Service (USFS) has awarded $250 million to states and territories to provide urban communities with equitable access to trees and the benefits they provide, including protections from extreme heat. The USFS will soon award up to $1 billion in grants to increase equitable access to trees and green spaces in urban and community forests where more than 84 percent of Americans live, work, and play.
- DOI unveiled a new Restoration and Resilience Framework to guide $2 billion in investments from the President’s Investing in America agenda to restore and protect our nation’s lands and waters. As part of this effort, the Bureau of Land Management has allocated an initial $161 million through the Inflation Reduction Act to restore ecosystems and revitalize local economies. The National Park Service has dedicated $44 million from the Inflation Reduction Act to national parks in 39 states, D.C., Puerto Rico, and the U.S. Virgin Islands. The U.S. Fish and Wildlife Service also awarded more than $120 million to rebuild, restore, and increase the climate resilience of the National Wildlife Refuge System.
INVESTING IN AMERICA TO CREATE GOOD PAYING JOBS
The Inflation Reduction Act aims to boost domestic manufacturing, create good-paying union jobs, and build more resilient, secure, and trusted supply chains. Together with the Bipartisan Infrastructure Law and the CHIPS and Science Act, the law has helped spur over $500 billion in private sector manufacturing investments since President Biden and Vice President Harris took office, including approximately $240 billion in clean energy manufacturing investments. The law is driving investment to places too often left out and left behind through bonus tax credits for building clean energy projects in traditional energy communities and low-income communities, and is creating good-paying and union jobs through incentives for using domestic content and paying prevailing wages and hiring registered apprentices to build America’s clean energy future.
In just the twelve months since the Inflation Reduction Act became law:
- Companies have announced more than $110 billion in new clean energy manufacturing investments, including more than $70 billion in the EV supply chain and more than $10 billion in solar manufacturing.
- According to estimates by outside groups, the Inflation Reduction Act’s clean energy and climate provisions have already created more than 170,000 clean energy jobs and could create 1.5 million additional jobs over the next decade.
- Project developers have also planned investments worth at least $122 billion across more than 800 clean energy generation projects—including wind, solar, battery storage, nuclear, hydroelectricity, biomass, and geothermal projects—totaling over 80 gigawatts (GW), enough to power 13.7 million homes for a year, according to Energy Information Administration data.
- Inflation-adjusted spending on private manufacturing and industrial construction in America is at its highest point since the Census started tracking the data in 1964—27 percent higher than the previous peak in 1966.
- Today, the Department of Treasury is releasing a new report showing that investments that have been announced in the clean energy, electric vehicles, and battery sectors are concentrated in relatively disadvantaged communities with lower wages, lower college graduation rates, and lower employment rates.
- The Inflation Reduction Act includes the largest investment in rural electrification since the New Deal—nearly $11 billion for rural electric co-ops—by funding rural co-ops to build clean, affordable, and reliable energy, which will create jobs and lower energy costs. The investment also provides forgivable loans for renewable energy projects located in or serving rural communities. The Department of Agriculture has also made available more than $1.3 billion in additional funding from the Inflation Reduction Act to provide agricultural producers and small rural businesses with the financing and funding they need to invest in clean energy and make energy efficiency improvements.
LOWERING ENERGY COSTS
DOE estimates that the Inflation Reduction Act and Bipartisan Infrastructure Law will cut electricity rates by as much as 9 percent and lower gas prices by as much as 13 percent by 2030—putting tens of billions of dollars back in the pockets of Americans.
Because of the historic investments driven by the Inflation Reduction Act that are building a clean energy economy and leading to greater access to clean power, Americans across the country are already seeing savings on their home energy costs. For example:
- Florida Power & Light (FPL) will refund its 5.8M customers ~$400M in savings as result of the Inflation Reduction Act’s Production Tax Credit for solar energy. FPL continues to build solar projects across Florida as part of nation’s largest solar expansion that today includes 50 operational sites.
- Xcel in Minnesota estimated that the Inflation Reduction Act could lead to $1.4B in consumer savings through 2034 for its Minnesota customers.
- WEC Energy Group in Wisconsin added $2.4 billion to its 5-year capital plan thanks in part to the Inflation Reduction Act. The company had 2,400 MW of new renewables in its 2022-2026 plan; now it’s targeting approximately 3,300 MW. The company projects long-term customer savings of approximately $2B from investment in renewables.
DOE launched an Energy Savings Hub to help consumers, renters, and homeowners find ways to save money on their energy bills by tapping into the programs in the Inflation Reduction Act. Already:
- Families who install an efficient electric heat pump for heating and cooling can receive a tax credit of up to $2,000 and save an average of over $500 per year on energy bills.
- Families who make other energy efficiency improvements can receive tax credits worth up to $500 for doors, $600 for windows, $150 for a home energy audit, and up to 30 percent off the cost of new insulation—a total of up to $1,200 per year in tax credits.
- Families who install rooftop solar or battery storage in their homes can save up to 30 percent of the cost of the installation via a tax credit and save nearly $400 per year on their energy bills.
- Drivers who buy qualifying clean vehicles can receive a tax credit of up to $7,500 for a new vehicle and up to $4,000 for a used vehicle. Drivers can browse qualifying vehicles easily by visiting fueleconomy.gov.
In addition, the Biden-Harris Administration is awarding grants to states and other entities to help consumers save money on their energy bills by making their homes more energy efficient. DOE has opened applications for states to implement $8.5 billion in home energy rebate programs, which will provide rebates for low- and middle-income families to buy and install cost-saving electric appliances and to make energy efficiency improvements to their homes. And the Department of Housing and Urban Development (HUD) announced $837 million in grant and subsidy funding and $4 billion in loan commitment authority through the Green and Resilient Retrofit Program, which will improve the energy and water efficiency and climate resilience of HUD-assisted multifamily properties serving low-income residents.
LOWERING HEALTH CARE COSTS
The Inflation Reduction Act advances President Biden, Vice President Harris, and Congressional Democrats’ longstanding commitment to making health care more affordable for American families and seniors. The law is bringing down health care costs and thanks to President Biden, Vice President Harris, and the Inflation Reduction Act’s continuation of important improvements on the Affordable Care Act, the nation’s uninsured rate has reached an historic low, and nearly 15 million people are saving an average of $800 per year on their insurance premiums. In addition:
- For the first time, Medicare will have the power to negotiate prescription drug prices. Americans pay more for prescription drugs than in any other country in the world. By September 1 of this year, the Centers for Medicare and Medicaid Services will announce the list of ten drugs for which they will negotiate prices with drug companies in order to lower prescription drug costs.
- Monthly insulin costs for Medicare beneficiaries are now capped at $35—providing certainty and critical cost savings for seniors who in some cases were paying as much as $400 for a month’s supply of insulin. If the Inflation Reduction Act had been in effect in 2020, Medicare beneficiaries who use insulin pumps would have saved an average of $866 per year. After the insulin cap for seniors went into effect, the top three insulin manufacturers also reduced their prices for all Americans.
- As of January 1, 2023, seniors on Medicare and adults with Medicaid coverage can get all recommended vaccines for free, saving $70 on average for these vaccines.
- Drug companies that increase prices faster than inflation now have to pay a rebate to Medicare—which is translating into lower out-of-pocket costs for seniors, as Medicare has begun directly lowering co-pays for drugs whose price has increased beyond inflation. This past quarter, 43 drugs used by thousands of Medicare beneficiaries increased their prices too fast. Because of the Inflation Reduction Act, some seniors are saving up to $449 per dose on those drugs.
- Starting in 2025, prescription drug costs for Medicare recipients will be capped at $2,000 per year. That means one in three Medicare beneficiaries—18.7 million people—will save an average of $400 per year. And the 1.8 million seniors with the highest drug costs, including seniors being treated for cancer and other serious diseases, will save an average of $2,500 per year.
MAKING THE WEALTHY AND BIG CORPORATIONS PAY THEIR FAIR SHARE
The Inflation Reduction Act raises $300 billion over a decade by requiring large corporations to pay a 15 percent minimum tax on their profits and by enacting a 1 percent excise tax on stock buybacks and redemptions. The Treasury and the IRS have already issued initialguidance on these tax provisions, which go into effect this year.
The Inflation Reduction Act also makes a historic investment in modernizing the IRS, providing funding to hire more staff and upgrade critical technology infrastructure. Thanks to these investments, the IRS has already:
- Improved services for law-abiding taxpayers. This spring, during the 2022 tax season, the IRS answered 3 million more phone calls than last year, cut phone wait times to three minutes from 28 minutes, and served 140,000 more taxpayers in person.
- Digitized almost 225 times more returns than the previous year thanks to the adoption of new scanning technology, cleared the backlog of unprocessed 2022 individual tax returns with no errors, launched two new digital tools, and enabled a new direct-deposit refund option for taxpayers with amended returns.
Over the next decade, these investments will enable the IRS to collect at least $150 billion in taxes already owed by wealthy people and big corporations.
Going forward, the IRS is on track to implement additional improvements for customer service, including a direct-file pilot for a free, voluntary, IRS-run electronic filing system beginning in 2024; additional in-person services in rural and underserved areas; a processing initiative that will expedite refunds by several weeks; and new online account tools and mobile-friendly tax forms.
The post FACT SHEET: One Year In, President Biden’s Inflation Reduction Act is Driving Historic Climate Action and Investing in America to Create Good Paying Jobs and Reduce Costs appeared first on The White House.