The Inflation Reduction Act contains $500 billion in new spending and tax breaks that aim to boost clean energy, reduce healthcare costs, and increase tax revenues.

The Inflation Reduction Act of 2022 (IRA), signed into law on August 16, directs new federal spending towards:

• Reducing carbon emissions
• Lowering healthcare costs
• Funding the Internal Revenue Service
• Improving taxpayer compliance.

Robert Speht, CEO of Vidi Energy, welcomes the IRA from the US and comments; “The IRA is a once in a lifetime boost to the renewables sector. There is nothing comparable in scale anywhere else in the world, outside China. The opportunity for US cased companies and overseas companies partnered with US companies to build on offshore and floating offshore wind is massive. Exciting times!”

Speht adds; “Vidi Energy will produce ready-to-float wind turbines and are currently looking for partners in the US. Together this partnership could benefit hugely from the IRA. Get in touch with us to find out more!”

The IRA directs around $400 billion in federal funding towards ‘clean energy’, with the aim of substantially lowering the nation’s carbon emissions by 2030. The funds are delivered through a mixture of tax incentives, grants, and loan guarantees. Clean electricity and transmission command the biggest investment, followed by clean transportation, including electric-vehicle incentives.

The US Department of Energy’s Loan Program Office will receive roughly $12 billion to expand its existing loan authority by tenfold and create a new loan program capped at $250 billion to upgrade, repurpose, or replace energy infrastructure.

The majority of the $394 billion in energy and climate funding is in the form of tax credits. Corporations are the biggest recipient, with an estimated $216 billion worth of tax credits. These are designed to catalyse private investment in clean energy, transport, and manufacturing. Many of the tax incentives in the bill are direct pay, meaning that an entity can claim the full amount even if its tax liability is less than the credit.

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